After 2 Days Of Losses Diesel Trys To Lead The Energy Complex Higher

Diesel futures are trying to lead the energy complex higher Thursday after 2 days of losses, aided by some bullish inventory data and the potential for a noteworthy shift in the global supply chain. RBOB gasoline futures continue to move opposite of diesel prices, holding just below break even this morning after eking out a small gain Wednesday.

The big story of the day for fuel markets is that India is allegedly going to stop purchasing Russian oil, although a time frame for that buying shift remains unclear. India’s growing refining network has been enjoying both Russia’s discounted crude and Europe’s shortage of distillates in the past few years, with a record 260mb/day of diesel shipped in September according to a Reuters report. European leaders had sanctioned at least 1 Indian refinery to try and close the refining loophole bypassing Russian sanctions, and this next step – IF confirmed – would add to the pressure on Russia’s reeling energy industry.

Meanwhile, Ukraine’s drones hit another Russian refinery overnight with officials confirming a strike on the 100mb/day Saratov plant that lies nearly 400 miles from the border. Multiple reports in the past week suggest the U.S. is providing intelligence to aid in the long-range strikes on refineries in an effort to leverage Russian negotiators. Bloomberg is reporting Russia’s exports have reached their lowest levels since the full invasion began 3.5 years ago in recent week.

The API reportedly estimated large builds in crude oil and gasoline stocks of 7.4 million and 3 million barrels respectively last week, while diesel stocks saw a large decline of 4.8 million barrels. The DOE’s weekly report is due out at noon eastern today and the agency says it will continue publishing on schedule despite the government shutdown.

The premium to lease space on Colonial’s main gasoline line jumped up to 3 cents this week as Gulf Coast gasoline differentials slumped by more than a nickel as plants continue to run at a high rate despite a handful of unplanned upsets in recent weeks.

LA CARBOB gasoline basis continues its slide this week, trading at the lowest premium in 2 weeks at “only” 43 cents over futures. LA Diesel is moving the other direction however, jumping up to a 20 cent premium to futures, and trading above the San Francisco market after Chevron reported its 5th unplanned flaring event at its 290mb/day El Segundo refinery in as many days while they try to normalize operations after the fire 2 weeks ago.

Flint Hills reported an upset in a crude unit at their 270mb/day Corpus Christi West facility, but it appears operations were stabilized within 2 hours so that event shouldn’t be felt downstream of the plant.

RIN values rallied to a 6 week high around $1.04/RIN for D6 (ethanol) and $1.07 for D4 (bio/RD). The EPA has not yet published its monthly RIN generation data for September which is normally out by the 15th of the month, but it’s not clear if the delay is shutdown related or just standard government inefficiency.