US Refiners Ramp-Up Diesel Production as Gasoline Margins Squeezed

US oil refineries are boosting production of middle distillates such as diesel and jet fuel ahead of the winter amid rising demand and tight supply, although poor gasoline margins are hampering profits, according to Reuters.

• Diesel inventories remain low, worsened by the Russia’s ephemeral export ban on the product. Meanwhile, US distillate demand hit a one year high, based on EIA data Oct. 19
• Current US distillate stocks are now 21m bbl below the seasonal average.
• However, gasoline margins continue to be squeezed, amid weak demand following the end of the summer driving season.
• While gasoline cracks have picked up in the last week, they remain at lows comparable to early 2021 and have fallen around 74% since late August.
• While gasoline inventories fell on the week, they remain 6.7% higher than the same period in 2022, Reuters said.
• US gasoline crack down 0$/bbl at 10.66$/bbl
• US ULSD crack down -0.4$/bbl at 43.2$/bbl