US February Diesel Exports to Europe Fell on Refinery Works

European imports of US diesel so far this month declined to 6.65mn barrels, down from11.44mn barrels, Kpler data showed, weighed on by lower US refining activity amid refinery outages and disruptions to global trade in recent weeks.

• "European diesel appears to be the key at-risk product due to rerouting, supply availability, and distorted arbs," Macquarie analysts said in a note this month.
• The decline in US diesel exports was because of seasonal maintenance at refineries, prolonged outages due to freeze-offs mid-January as well as the outage of the 435kbpd Whiting, Indiana refinery, that is scheduled to fully restart in March.
• US refinery utilization rates have fallen from near 93% at the start of the year to 80.6% this month, the lowest rate since December 2022, according to government data.
• With European refineries set to undergo their own turnarounds in March and April, European diesel prices are poised to rise further and that could help revitalize flows of US-made diesel to Europe, Kpler analyst Matt Smith said.
• US refining capacity was expected to increase by 431kbpd in the week to 23 February, cutting offline capacity to 1.8 million bpd, IIR Energy said in a note late last week.
• The latest slump in US diesel prices and the increase in the European equivalent have reopened arbitrage for US diesel from the USGC to Europe for March and April arrivals, Sparta analyst James Noel-Beswick said.