Product Cracks Steady After Three Week Decline

The decline in diesel and gasoline crack spreads is slowing after falling on weak demand, building distillate storage levels in Europe and reducing concern for tight supply due to higher than expected Russian output.

• Unlike crude, diesel markets have only seen a small reaction to the potential lower crude output from Russian in March.
• Data released this week showed European ARA Gasoil stocks back above the five year average for the first time since Jul 2021. European supplies have been boosted in recent months by supplies from Middle East, US, China and Russia before the EU ban. US distillate stocks are however still 14.8% below normal and Singapore Middle Distillates inventories actually declined this week to 28.6% below average.
• Exports of diesel-type fuels from East Asia to Europe fell 23% m/m in January as European stockpiles increased according to Kpler data. Loadings were at 953k tons in January with exports from China more than halved at 196k tons but supply from India up about 17%.
  • US gasoline crack up 0.5$/bbl at 25.26$/bbl
  • US ULSD crack up 0.9$/bbl at 41.72$/bbl
  • EU Gasoline-Brent up 0.4$/bbl at 12.86$/bbl
  • EU Gasoil-Brent up 1.1$/bbl at 25.1$/bbl