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Product Markets and Refinery Operations

OPEC Monthly Oil Market Report – September 2017

63

Product markets

US market

Product markets in the

US

displayed a solid performance in August, with all product cracks recording healthy

gains m-o-m, apart from fuel oil.

The

gasoline

93 unleaded

crack spread against WTI gained more than $3.8/b compared with the previous

month’s level to average $28.4/b in August. Hurricane Harvey hit the USGC during the last week of August

and its impact on gasoline prices over the monthly average was considerable. The gasoline crack spread

had actually been declining in the middle of August before skyrocketing during and after Hurricane Harvey at

the end of August. Based on initial weekly data, demand for gasoline was at 9.7 mb/d in August, indicating

very healthy demand during the summer driving season. This is approximately 54 tb/d higher than the month

of August 2016.

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

For middle distillates, the US Gulf Coast

gasoil

crack averaged around $12.0/b, adding more than $2.3/b

from the previous month

.

The

jet/kerosene

crack spread also rose sharply, adding close to $5/b to reach

$18.9/b from the previous months’ levels.

Middle distillate

demand, including jet/kerosene, stood at around

6.0 mb/d based on weekly data in August, higher than in July and around 0.7 mb/d higher than the same

month a year earlier. As such, the cracked spread rallied on rising demand and outages curtailed product

supply.

At the

bottom of the barrel,

the USGC high sulphur

fuel oil crack

declined by $0.4/b to average around

minus $3.5/b in August. The fuel oil market declined on easing demand, which fell by around 74 tb/d m-o-m

based on weekly data.

-20

-10

0

10

20

30

40

-20

-10

0

10

20

30

40

Aug 16

Sep 16

Oct 16

Nov 16

Dec 16

Jan 17

Feb 17

Mar 17

Apr 17

May 17

Jun 17

Jul 17

Aug 17

US$/b

US$/b

Premium gasoline

Jet/Kerosene

Diesel

Fuel oil

Sources: Argus Media and OPEC Secretariat.