Oil Products Summary at European Close: Diesel Cracks Rebound on Week

Despite being down on the day, diesel cracks are regaining ground this week to reverse much of the decline seen during the second half of October amid tight supply concerns and low inventories heading into the winter heating season. Diesel cracks are up nearly 10% since the start of the week. Gasoline crack spreads are slightly softer today with upside moves limited by demand concerns.

• US gasoline crack down -0.2$/bbl at 11.56$/bbl
• US ULSD crack down -1.7$/bbl at 42.52$/bbl
• Diesel and gasoline cracks strength is expected to persist in the near term, partly due to refinery outages, low inventories and OPEC+ cuts according to Bank of America earlier this week via Bloomberg.
• Seaborne diesel and gasoil exports from Russian ports fell 11% m/m in October to 2.55mn tons according to LSEG data.
• Russia has no plans to further ease fuel export restrictions in the near future according to Deputy Prime Minister Alexander Novak – quoted by Russian news agency Ria.
• China has seen a rebound in oil product demand this year as the economy recovers from lockdowns but has fallen short of some expectations.
• China’s state-owned refinery run rates in the week to 3 Nov fell to the lowest since 6 July at 78.53% of capacity according to Bloomberg based on OilChem data.
• High-low sulphur fuel oil spreads in European surged in October, amid divergent supply availability for each grade in the Americas and Middle East, according to Platts
• Tankers laden with gasoline and headed to New York have been diverted in recent weeks due to poor regional demand, according to Bloomberg.
• Mexico’s Pemex is running its six refineries at less than 50% capacity amid continued fallout from fires which occurred in May, according to Bloomberg.