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Strong Distillates Margins Support Demand for Middle East Light Crude

OIL

Middle East crude benchmarks Oman and Dubai edged higher on Tuesday and Murban's premium reached the highest level this month at $1.36/bbl on robust demand for light grades according to Reuters.

  • Strong margins for light and middle distillates continued to drive demand for Abu Dhabi light grades such as Murban.
  • US and European diesel crack spreads are edging lower again today after seeing a slight recovery yesterday following a pull back since mid Feb.
  • European and US diesel spreads are back at levels seen in early Feb amid demand uncertainty and a ramp up in Middle East refining capacity after a rally up to a peak on Feb 9. Spreads however remain above levels seen in Dec and Jan amid Red Sea tanker diversions, refinery outages, below normal inventories, and drone attacks on Russian energy infrastructure.
  • Shipments of diesel from India into Europe have fallen to their lowest levels since 2022 in February to date, as Houthi attacks on ships in the Red Sea disrupt international trade.

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