Oil Products Summary at European Close: Cracks Gain Ground

Diesel and gasoline crack spreads are gaining further ground today last week’s rise. Cracks are boosted by wider market support from shipping risks in the Red Sea. Uncertainty over future demand continues to put pressure on prices; falling US pump prices and hopes of US Fed cuts in 2024 could boost consumption.

• US gasoline crack up 0.4$/bbl at 18.33$/bbl
• US ULSD crack up 1.3$/bbl at 39.8$/bbl
• European gasoline export flows could change in 2024, as traders seek new outlets for the region’s growing oversupply, according to Argus.
• European gasoline arrivals in the US climbed to 195kbpd in the seven days to 14 December, up from 119kbpd in the week prior, according to bills of lading and ship-tracking data compiled by Bloomberg.
• US Gasoline demand is estimated at 8.5326mbpd in the week starting 10 December, up by 1.95% from the week prior and 1.3% above the four-week average according to GasBuddy via X.
• Chinese diesel exports last month fell by 44.9% on the year to 1.16mn tons, but up from 1.11mn tons in October, data from the General Administration of Customs showed, cited by Reuters.
• Global passenger capacity is set to rise 2.3% to 107.1m seats in the week commencing Dec. 18, according to OAG data.
• Weak demand from gasoline blending and chemicals production are expected to drive weaker naphtha margins toward the end of December according to Kpler last week.
• Core clean product demand is projected to rise by approximately 1.1mbpd in 2024 according to Kpler.
• The 40kbpd ACU-2 CDU at TotalEnergies’ 238kbpd Port Arthur refinery remains shut three weeks after the end of the planned maintenance at the refinery, people familiar with the operations told Reuters.