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Refined Products Steady With Supply Concerns Offset by Weak Demand


Diesel and gasoline crack spreads are holding steady at the end of the week while crude holds small gains on the day. Low inventory levels despite a recent recovery and potential future supply risks from the EU ban on Russian products both remain supportive of product prices, but weak demand is limiting any upside moves.

  • Gasoil curve backwardation has eased slightly today but spreads remain higher on the week with tight supplies expected beyond Feb.
  • US refining capacity has mostly returned following the severe cold late in December which shut in 40% of Texas capacity. EIA refinery utilisation fell as low as 79.6% before recovering to 84.1% in the week to 6 Jan.
  • Data released this week showed European ARA Gasoil stocks 10.6% below the five year average, US distillate stocks 16.9% below and Singapore Middle Distillates 17.8% below average.
    • Gasoil FEB 23 up 0.5% at 925.25$/mt
    • Gasoil FEB 23-MAR 23 down -2.25$/mt at 27$/mt
    • Gasoil JUN 23-DEC 23 up 2.25$/mt at 38$/mt
    • US gasoline crack down -0.1$/bbl at 25.49$/bbl
    • US ULSD crack down -0.1$/bbl at 56.88$/bbl
    • EU Gasoline-Brent up 0.7$/bbl at 12.36$/bbl
    • EU Gasoil-Brent up 0.7$/bbl at 36.04$/bbl

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