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Oil Products End of Day Summary: Diesel Prices Rally

OIL PRODUCTS

Diesel prices have rallied reflecting concern for tighter supplies as Russian diesel exports are expected to fall in September. The September Gasoil contract is currently up around 9.6% on the week.

  • Gasoil SEP 23 up 4.7% at 989$/mt
  • US gasoline crack up 0.9$/bbl at 24.33$/bbl
  • US ULSD crack up 3.1$/bbl at 51.74$/bbl
  • Diesel and gasoline cracks found support after the recent gradual decline with EIA data showing US inventories still near the low end of the five-year range.
  • Concern for US gasoline demand at the end of the summer driving season has been weighing on prices although the upcoming refinery maintenance season could add support.
  • ICE Gasoil futures open interest dips to the lowest since early June at 691k after falling from a peak in early August at 740k. Aggregate open interest had trended higher throughout H1 2023 before holding steady during July and August.
  • Russian diesel exports from key western ports are expected to fall by a quarter this month amid seasonal refinery maintenance and government efforts to maintain domestic supplies.
  • Marathon Petroleum’s 593kbpd Galveston Bay refinery on the Texas Gulf Coast had a small fire Thursday night that had no impact on refinery processes, according to Joe Tumbleson Jr.,
  • Daily gasoline consumption is expected to fall 3.3% on the month to 0.467m mt in September, according to OilChem.
  • China’s state-owned refinery run rates rose 1.4 ppt to the highest in data recorded since Nov 2021 at 83.12% of capacity according to Bloomberg based on OilChem data.
  • Both US and Europe diesel margins are regaining ground today after a steady decline from a high on 25 August. Prices are today supported by ongoing low global inventories and with upcoming refinery maintenance outages.
  • Refinery runs at Petrobras refineries hit 97.3% in August, according to a company statement.

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