Diesel Output Increase May Boost Europe Gasoline Crack, JBC Says
Diesel-making capacity in Europe has increased by 360,000 barrels a day in the past five years even as crude refineries are halted, a trend that may boost gasoline processing margins, according to JBC Energy GmbH.
The growth in hydrocrackers, a unit that mostly produces middle distillates such as diesel and gasoil, coincided with a 1 million barrel-a-day drop in European crude refining capacity in the same period, the Vienna-based researcher said today in a research note.
“The ongoing shift toward middle distillate production at the expense of gasoline is not a regional European phenomenon, but rather a global trend,” JBC Energy said.
A lack of gasoline blending components, used to create high-octane grades, during the summer driving season in Europe and North America may have caused some of the “spikes in gasoline cracks witnessed last year,” JBC Energy said. Crack is the spread between an oil-product and crude, and is also a measure of refinery profitability.
European gasoline crack, or premium to Brent crude, reached a five-year high of $18.07 a barrel on Sept. 26, according to data from PVM Oil Associates Ltd., a crude and refined products broker in London. It was $7.74 as of 10:22 a.m. today.
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