Oil Products End of Day Summary: Diesel Weakens

Diesel cracks have recouped some of the losses during the day but remain lower on yesterday. The market is weighing the impact of the Russian fuel export ban against recent high Asian exports and ongoing economic demand concerns while global inventories remain below normal. Growing expectation of a more short-lived Russian export ban are providing downside risk.

• US ULSD crack down -3.8$/bbl at 42.9$/bbl
• US gasoline crack down -3$/bbl at 9.67$/bbl
• US refinery margins as measured by the 3-2-1- crack spread have fallest to their lowest level since January 2022, according to Bloomberg.
• The recent selloff in gasoline appears excessive, given that current inventories look low, Goldman Sachs said in a note reported by Bloomberg.
• Exxon is preparing to restart a unit at its Fawley refinery in the UK over the coming days.
• BP intends to halt is Castellon refinery in Spain from October 15 for 52 days according to an official statement.
• Russian Deputy PM Alexander Novak is set to hold a meeting with Russian oil companies October 4th to have an update on the fuel market situation.
• Russia is in discussions about changing its fuel export ban that was implemented September 21 according to a Bloomberg source.
• Russian oil companies plan to ask President Putin to lift the diesel and gasoline export ban, according to Platts.
• US diesel exports to Brazil nearly doubled from August to September up to a four-month high of 79kbpd according to Bloomberg citing Kpler data.
• China’s strong diesel exports are not expected to last as refiners are unlikely to receive a fourth batch of export quotas according to Vortexa.
• US retail gasoline prices dropped 1.8% to $3.598/gal in the week ending Sep. 29, according to the EIA.
• Rhine barge rates are edging higher in recent weeks as the water levels are expected to fall back toward the lows of the year.