Oversupply of middle distillates weighs on refinery margins

Gasoil stocks in the Amsterdam-Rotterdam-Antwerp region climbed further this week, and find themselves at a record 3.245 million tons. 

This makes any widening of the currently low crack spreads for middle distillates unlikely. The gasoil-Brent crack spread dipped below $12 per barrel for a time yesterday, putting it at its lowest level in six months. 

"The diesel oversupply could even increase because another major net exporter has entered the market, Saudi Arabia. Therefore, a little upside potential can be froeseen for diesel margins, even in the longer term", says Commerzbank.