Diesel carries the most upside risk

ICE Brent crude futures continued to be supported, at 85.2 $/b for the Dec21 delivery, as stocks data in the US and the ARA region surprised to the downside. Indeed, US stocks were depleted by a combined 11 mb, mainly due to drops in gasoline and diesel stocks, as the US turnaround season took down 1.5 mb/d of refining capacity, leaving the refined product market undersupplied for the time being. In Europe, diesel and gasoline stocks also dipped by 0.3 mb respectively, lending further support to the transportation fuel markets. Jet fuel stocks remained elevated and stable, at 7 mb. Total distillate stocks in ARA (diesel and jet) are approaching the level where we could see a significant increase in the diesel forward curve’s curvature, with the 1st inter-month spread rising much higher than the second inter-month spread. Diesel supply is increasingly problematic in the Atlantic basin, with US refiners’ limited capacity, as Chinese diesel exports remained low in September, and with hydrocracker run cuts in Europe (Total’s Antwerp refinery) and the Middle-east (Fire at a CDU in Kuwait producing ULSD).

Share this news :

You might also read :

ES-gas
July 13, 2021

Sharp downward correction

Prices dropped significantly yesterday in most European gas markets, pressured by higher supply and technical selling. Indeed, Russian supply rebounded to 310 mm cm/day on…
ES-oil
January 28, 2022

Oil prices resist the surge in the dollar

The price of Brent 1st-nearby touched $91/b yesterday while the price of WTI exceeded $88.5/b. This is all the more remarkable as at the same time…
Join EnergyScan

Get more analysis and data with our Premium subscription

Ask for a free trial here

Don’t have an account yet? 

[booked-calendar]