Distillate stocks stood at 112 million barrels on April 14, down from 122 million on March 3, according to the U.S. Energy Information Administration .
Consumption and production have increased by a similar amount since the start of March, indicating little change in the domestic balance. In real terms, prices are in the 58th percentile for all months since 1990, down from the 98th percentile at the end of May 2022, as concerns about fuel availability have eased.
Instead the downturn in the global industrial cycle, rising interest rates, and a relaxed approach to sanctions enforcement have ensured distillates remain plentiful. The gross refinery margin or crack spread for turning Brent into diesel with both delivered in December 2023 has fallen to less than $26 per barrel from $42 in mid-October.The broader picture is still that U.S. distillate consumption is falling in line with the slowdown in manufacturing and freight activity.
Consumption in November-January was down -4.4% compared with the same period a year earlier, a contraction previously associated with a mid-cycle slowdown of cycle-ending recession.