US diesel exports to Europe fell in February

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U.S. diesel exports to Europe nearly halved in February to 6.65 million barrels from 11.44 million barrels in January, according to an analysis by ship tracking firm Kpler.

The drop in supply was due to technical failures and upgrade programs at U.S. refineries, which left production 10% below the seasonal average for the past five years.

U.S. distillate production fell to 4 million barrels per day in the week ending Feb. 9, the lowest level since December 2022, according to official government data.

A big loss for the market was the closure of BP’s Whiting refinery in Indiana in early February after a power outage.

The drop in production levels is also related to a planned refurbishment of Motiva Enterprises’ plant in Port Arthur, Texas, and a technical failure at Total Energy’s refinery in Texas.

Gasoline prices in northwestern Europe rose to more than $118 per barrel throughout February, partly due to the turmoil.

This is up from $109 a year ago.

Global supply tightness

Since the invasion of Ukraine, Europe has become increasingly dependent on the United States for diesel, and many countries have been forced to invade Ukraine. reduce their dependence With Russian fuel.

recent attacks Houthis in the Red Sea Ships carrying oil from the Middle East and Africa have to circumnavigate the Cape of Good Hope to avoid rebel shelling, adding to supply pressures.

The third factor weighing on supply is lower inventories at the Amsterdam-Rotterdam-Antwerp (ARA) refining hub.

Europe increased its diesel stockpiles in the wake of the invasion of Ukraine, but ARA stockpiles dwindled at the end of January as a result of heavy exports to regions such as Latin America.

Looking ahead, analysts suggest that while turmoil in the Middle East may continue, U.S. refinery output is likely to recover.

Research firm IIR Energy estimated Friday that U.S. refineries will increase available capacity by 431,000 barrels per day in the week ending Feb. 23.