A strong yield shift away from diesel in favour of gasoline in US refineries over the course of September, together with still-subdued demand, have contributed to distillate inventories falling to their lowest levels since mid-May.
This has likely stemmed from the current counter-seasonal strength in gasoline/diesel spreads and the fact that US mogas inventories are not far from 2019 levels.
While we believe that not all US refiners will be able to take full advantage of gasoline’s current relative strength, it would not surprise us to see gasoline overproduction going into winter.
2 Oct 2020 Featured in: Americas Weekly - Issue 39
Research Highlights - Week 40
US refinery diesel yields slowly normalising amid still low demand (see Americas Weekly – Issue 39)