European Diesel Margins Hold Near Record Highs Despite Surprise US Inventory Build

European diesel margins held steady on Wednesday, remaining near record highs despite data showing an unexpected increase in U.S. fuel inventories.

US Inventory Data Presents Mixed Picture

Data from the U.S. Energy Information Administration (EIA) provided conflicting signals for the market. While total U.S. distillate stocks, which include diesel and heating oil, rose, regional supplies tightened significantly.

• Total U.S. Inventories: Increased by 0.8 million barrels last week to 104.2 million barrels.
• Market Expectation: Analysts had forecast a decrease of 1.3 million barrels.
• East Coast Stocks: Dropped to a record low, according to the EIA, highlighting regional tightness that helped support prices.

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Supply Concerns Underpin Market

The market's resilience was reflected in the crack spread, a key indicator of refinery profitability. Low-sulphur gasoil futures traded at $76.39 a barrel above Brent crude futures at 1615 GMT, a slight increase of 22 cents from the previous session.

Ongoing supply disruptions are providing a floor for prices. According to two industry sources, Surgutneftegaz’s KINEF refinery, one of Russia’s largest, halted crude processing after a drone attack on August 30 damaged key units. This outage adds to global concerns about the availability of refined products.