Oil Products End of Day Summary: Diesel Markets Soften

Diesel markets are softer today but recovered some earlier losses with crack spreads pulling back from the highest since January with demand concerns limiting upside despite ongoing tight supplies and low global inventories. IEA last week said OECD European crude processing is expected to decline 600kbpd y/y in Q3. Gasoline crack spreads are also weakening, reversing some previous gains after edging higher last week.

• Data last week showed US distillate stocks nearly 17% below the five year average, Singapore Middle Distillates inventories 32.9% below average and European ARA Gasoil stocks are 11.5% below.
• ICE Gasoil managed money net long positions were last week reported at the highest since March 2022 and Nymex diesel the highest since Feb 2022.
• The refining system remains structurally tight, following significant disruptions and closures over the past seven years according to a note from Goldman Sachs. The market is vulnerable to even small shocks with problems exacerbated by divergent demand, a refining system ill-suited to the lightened slate and hot weather.
• Weekly US gasoline demand was down by 1.4% w/w for the week ended August 12 according to GasBuddy data which placed demand at 8.92mn bpd for the week.
• ExxonMobil is overhauling a reformer at its 619,024 bpd Beaumont, Texas refinery, for three weeks.
• Marathon were reported to be restarting the cat feed hydrotreater (CFHU) at its 593,000 bpd Galveston Bay Refinery in Texas City, Texas, over the weekend according to Reuters sources.
• Arrivals of Russian fuel oil and VGO into India are set to surge in August according to Bloomberg.
• Global airline capacity fell by 0.5m seats - or 0.4% - in the week to Aug.17, according to OAG data, as demand begins to subside following the summer peak in air travel.
• Imports of crude oil into independent refineries in China’s Shandong region rose 5.61% on the week in the seven days to August 13, according to OilChem data.
• Russia's seaborne oil product exports in July rose by 3.8% month on month to 10.533 million metric tons as seasonal refinery maintenance slowed down.
• US gasoline crack down -1.7$/bbl at 38.97$/bbl
• US ULSD crack down -1$/bbl at 46.78$/bbl
• EU Gasoline-Brent down -0.5$/bbl at 26.61$/bbl
• EU Gasoil-Brent down -1.2$/bbl at 32.64$/bbl
• Gasoil SEP 23 down -2% at 898.25$/mt
• Gasoil SEP 23-OCT 23 down -2.5$/mt at 11.75$/mt
• Gasoil DEC 23-DEC 24 down -6.75$/mt at 82$/mt