Weak Diesel and Gasoline Margins on Demand Fears

Diesel and gasoline margins are again drifting lower today with demand concerns weighing on spreads and assisted by the return of US refineries from maintenance and the end of strikes with halted French refineries.

• GasBuddy data this week showed US gasoline demand slightly higher at 8.71mbpd but only up 0.5% from the four week average. Gasoline has seen more support than diesel this year with the switch to summer grade gasoline and ahead of the expected demand boost from the driving season.
• US diesel demand is on track for the biggest drop since 2016 of 2% in 2023 according to S&P Global. Trucking consumes approximately 60% of diesel in China and more than 70% in the US and the number of trucks on Chinese highways fell 8% in the week to 9 April. One measure shows March trucking in the US at the lowest seasonal level for five years according to FreightWaves.
• Weak demand and higher refinery output has enabled US to increased diesel exports to Europe as they look to rebuild inventories following the strike disruption to French refineries. Lower than normal heating demand over the winter heating season added to the soft European diesel prices earlier this year.
  • US 321 crack down -0.4$/bbl at 33.05$/bbl
  • US gasoline crack down -0.6$/bbl at 35.06$/bbl
  • US ULSD crack down -0.1$/bbl at 29.03$/bbl
  • EU Gasoline-Brent down -0.7$/bbl at 19.02$/bbl
  • EU Gasoil-Brent up 0.1$/bbl at 16.36$/bbl