Imports quench European diesel demand

摘要

A surge in long-haul imports is keeping European diesel prices in check. The source of those imports — and potential further increases — threaten to eat into the market share of European refiners’ most profitable product. European diesel crack spreads have been remarkably stable at $15/bl this year, making it the most profitable of the main product groups. But margins are already $10/bl lower than they were a year earlier (see graph). This is largely because of rising imports crowding out domestic output. European refiners have produced 200,000 b/d less middle distillates this year than recent averages. Turnarounds took just over 1mn b/d of capacity off line in September and 1.2mn b/d in October, the IEA says. These shutdowns included refineries with heavy diesel biases, such as Shell’s 420,000 b/d Pernis plant in the Netherlands and Preem’s 220,000 b/d Lysekil plant in Sweden.