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Product Markets and Refinery Operations

58

OPEC Monthly Oil Market Report – August 2017

Product markets

US market

The grade 93 unleaded

gasoline

crack spread gained more than $2/b compared with the previous month’s

level to average $24.26/b in July. The main factor supporting healthier gasoline crack spreads in July is solid

demand for gasoline during the summer driving season supporting total gasoline consumption, which

reached around 9.7 mb/d in July, approximately 130 tb/d higher than that for June and more than 110 tb/d

higher than that for July 2016. Second, declining gasoline inventory levels, which fell for six consecutive

weeks starting from mid-June, led to nationwide stock levels of around 10 mb/d lower than those witnessed

in July 2016. Finally, outages in Mexico and Europe also contributed to the rise in gasoline crack spreads.

Graph 6 - 3: US Gulf crack spread vs. WTI

The US Gulf Coast gasoil crack averaged around $9.6/b

for

middle distillates

, adding more than $2/b from

the previous month

.

The

jet/kerosene

crack spread increased most in July, adding close to $4/b to reach

13.7/b from the previous months’ level.

Middle distillate

demand, including that for jet/kerosene, stood at

around 6 mb/d in July, marginally lower than in the previous month and around 600 tb/d higher than in the

same month a year earlier. Exports of diesel oil to Europe were supported, backed by freight rates.

Additionally, middle distillate stocks continued to trend lower than levels experienced in July 2016.

At the

bottom of the barrel,

the US Gulf Coast high sulphur fuel oil crack gained around $2 to average

around minus $3/b in July. The fuel oil market continued to strengthen in July as stocks reached their lowest

point since 2015. Lower production volumes and higher export quantities were supported by healthy

arbitrage economics.

-20

-10

0

10

20

30

-20

-10

0

10

20

30

Jul 16

Aug 16

Sep 16

Oct 16

Nov 16

Dec 16

Jan 17

Feb 17

Mar 17

Apr 17

May 17

Jun 17

Jul 17

US$/b

US$/b

Premium gasoline

Jet/Kerosene

Diesel

Fuel oil

Sources: Argus Media and OPEC Secretariat.