Oil Products Summary at European Close: Diesel Cracks Down

Diesel crack spreads have fallen, driven by the impact of the Russian fuel export ban against recent high Asian exports and ongoing economic demand concerns while global inventories remain below normal.

• US ULSD crack down -0.9$/bbl at 46.51$/bbl
• US gasoline crack up 2.3$/bbl at 12.12$/bbl
• US imports of US gasoline arrived at 329k bpd for the week ended September 28 – down 14% w/w according to Bloomberg analysis of bills of lading.
• Russian oil products exports from the Black Sea port of Tuapse are set to fall by 12.9% month on month on a daily basis to 1.142mn tons according to traders, cited by Reuters.
• In its base case scenario, Kpler expects Russian refinery runs to have dropped by about 300 kbd to pre-export ban forecasts for inventories not to exceed capacity before October 9.
• Russian gasoline Ai-92 grade prices fell 1.94% on Oct. 2 according to Reuters, as prices decline following Russia’s export ban on gasoline and diesel products.
• Primary crude processing from oil refiners in Russia fell by 173kbpd to the lowest since May to average 5.38mbpd from 1-27 Sep according to Bloomberg sources. The fall is driven by seasonal refinery maintenance which is expected to peak in mid-October.
• Seaborne diesel and gasoil exports from Russian ports fell by 27% in September from a month earlier to about 2.76 million tonnes due to refinery maintenance and the country’s export ban on diesel, data from traders and LSEG showed.
• India’s BPCL offered its first spot gasoil cargo via a tender in more than a year according to Reuters sources.
• The jet fuel/kerosene complex is expected to strengthen due to an increase in international air travel demand from China during the Golden Week holidays and with increased Northeast Asia heating consumption according to FGE.
• Implied passenger jet fuel demand will end seven consecutive weeks of decline, driven by an uptick in Asia for the Chinese public holiday, according to BNEF.
• The US national average for gasoline prices has fallen by 3.5 cents/gal on the week to $3.77/gal, the second consecutive weekly decline, according to GasBuddy.
• US Autumn refinery maintenance is on track for its heaviest since before the pandemic. Energy Aspects places offline maintenance at 2.5mn bpd combined across September through end November – 11% higher than a year prior.
• The Rotterdam 0.5%/3.5% sulphur spread fell to a multi-year low in September, but expectations of its recovery might be overstated, according to Platts.