Oversupply puts refinery margins of diesel under pressure

Saudi Arabia has likewise evolved to become a major net exporter of oil products, because it has also invested hugely in expanding refinery capacities in the meantime,

The distillates market in particular is being flooded by supply as a result, which is pressuring the crack spreads for diesel. 

The gasoil-Brent crack spread has dropped below its usual trading corridor of $14-16 per barrel and is currently only just over $12 per barrel. 

"The lower crack spreads for diesel make it less attractive for refineries to process crude oil, which is also likely to weigh on oil prices", says Commerzbank.