As the economy sputters, additional refineries start operating, and exports from Russia are rerouted and replaced by fuel from the Middle East, middle distillates prices around the world are plummeting. Examples of these products are gas oil and diesel.
The buildup of distillate stockpiles has occurred in both Europe and the United States at the same time that manufacturing and freight activity have decreased.
According to information from Enterprise Singapore, distillate stockpiles in Singapore have increased by a total of 3 million barrels in 12 of the 15 most recent weeks.
The decision by Saudi Arabia and its allies in OPEC+ to announce a reduction in crude output on April 2 is likely influenced by the worsening forecast for distillate use and crack spreads.
When lockdowns significantly hindered manufacturing, China reopenedas well as internal and external passenger travel in 2022, could boost distillate consumption including jet fuel especially in the second half of 2023.