Oil Products Summary at European Close: Diesel In Retreat

Diesel markets have softened on the day after the initial surge higher last week as the Russian exports ban is widely expected to only last a few weeks. Diesel markets remain supported by low inventories and refinery maintenance but strong exports from China and India this month have provided some downside pressure.

• US gasoline crack down -0.4$/bbl at 15.18$/bbl
• US ULSD crack down -1.7$/bbl at 45.26$/bbl
• The Russian Energy Ministry has approved an amendment to its export ban to exclude bunker fuel, gasoils and some middle distillates. The diesel ban could move more Persian Gulf vessels to the West, which could tighten supplies in Asia during Q4
• Spain’s Bilbao refinery is restarting the G3 diesel desulfurization unit after planned maintenance.
• Iran’s Bandar Abbas refinery faced a gas leak during a repair which caused an explosion.
• Russia’s daily diesel exports plunged by 28% in the first 20 days of September ahead of the export ban announcements according to a Bloomberg source.
• It will be a challenge for companies to meet the European Union's new targets for the use of sustainable aviation fuels, or SAFs according to German Chancellor Olaf Scholz.
• Global airline capacity expected to rise by 0.6% on the week to 112.3m seats in the week commencing Sep. 25, driven by the upcoming Golden Week holidays, according to OAG.
• Chinese travel is set for another demand boost as the Golden Week holiday is set to arrive at the end of the week spanning September 29 - October 6. More than 21 million people are expected to take flights in the space of eight days.