US gasoline demand stood at around 9.0 mb/d in December, approximately 110 tb/d lower than in the previous month and 170 tb/d lower than in the same month a year earlier.
Despite healthy domestic gasoline demand following the typical seasonal downward corrections, gasoline margins strengthened during December by getting support from stronger export opportunities, which reached more than 1 mb/d, the highest level seen since 2010. Requirements from Latin American countries have continued to rise, mainly from Brazil and Mexico.
Additional gains were capped by the bearish sentiment coming from the supply side with refinery runs on the rise and inventories continuing to increase with a build of around 6 mb during December.
The gasoline crack spread showed a sharp gain of more than $3, compared with the previous month’s level, to average around $20/b in December.
Middle distillate demand stood at around 3.8 mb/d in December, which is 90 tb/d lower than in the previous month and around 30 tb/d higher than in the same month a year earlier.
The middle distillate market continued to receive some support from healthy domestic demand amid higher export opportunities to Europe and Latin America. Additional support came from news about a hydrocracker unit outage in Texas.
The USGC gasoil crack spread averaged around $8.9/b in December, gaining almost $1 from the previous month’s level. Further gains were limited by increasing supplies following the end of the refinery maintenance season amid middle distillate inventories continuing on the rise during December.
At the bottom of the barrel, fuel oil margins strengthened as the market continued to be supported by tight sentiment boosted by falling inventories in PADD-3 amid healthy demand reported in the USGC and New York area. The USGC HSFO crack spread gained almost $1 to average minus $6/b in December.