OIL PRODUCTS: Oil Products Summary At European Close: Cracks Rise
Cracks are higher amid signs of disruption at BP’s Whiting refinery. Diesel cracks are nevertheless set for a net weekly decline amid economic fears stemming from heightened US-China trade tensions. Gasoline cracks have been supported this week by signs of limited crude purchasing by the Dangote refinery.
- US ULSD crack up 0.7$/bbl at 33.74$/bbl
- US gasoline crack up 0.6$/bbl at 19.25$/bbl
- US 321 crack up 0.6$/bbl at 24.08$/bbl
- EU Gasoil-Brent up 0.5$/bbl at 22.86$/bbl
- EU Gasoline-Brent down 0.2$/bbl at 13.86$/bbl
- Patrick DeHaan notes on X that the Whiting facility experienced a fire last night that was extinguished and was actively flaring while alarms were heard in the area.
- A fire broke out at SK Energy's 669kb/d Ulsan refinery in South Korea during partial maintenance, according to Argus sources.
- Russia’s Deputy Prime Minister Alexander Novak said that so far there is no need to import fuel to Russia, according to Tass cited by Bloomberg.
- The European Commission published on Oct. 16 updated guidelines on the documentation and due diligence required for complying with the import ban on refined products processed from Russian oil.
- Drones reportedly attacked a fuel oil depot in Crimea on the night of Oct. 16-17, according to various Ukrainian media outlets.
- China’s new energy vehicle (NEV) sales rose in September, supported by steady overall auto demand, effective trade-in subsidies, and the upcoming end of some provincial incentives, OilChem said.
- CDU capacity utilisation rates at China’s state-owned refineries fell by 1.03%pts in the week to Oct. 17 to average at 81.23%, OilChem said.
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US: Schumer Maintains A Bipartisan Bill Is Required To Avert Oct 1 Govt Shutdown
Senate Minority Leader Chuck Schumer (D-NY) reiterated in an interview that Republicans must negotiate a bipartisan government funding solution to avert a government shutdown on October 1. His comments come after House Republican leadership unveiled a 'clean' stopgap funding measure yesterday that fails to include any Democratic demands on healthcare.
- Schumer said, when asked if he sees any route to avoiding a shutdown, "I hope [Republicans] would avoid a shutdown. They're on the path to causing it..." Schumer says, on the way to avoid it, "we have two weeks. Let's sit down and talk. Let's have input from both sides and come up with a bipartisan bill that can pass and avoid a shutdown."
- Schumer adds, "the data shows that the American people are on our side... 59% believe [Trump] would cause a shutdown and when you ask them why, it's because they won't negotiate."
- Schumer is expected to release an alternate funding plan in the coming days that includes a permanent extension of the Obamacare enhanced premium tax credits. That proposal is DOA with Republicans, but could provide Democrats a credible justification for pushing a shutdown, particularly as Medicaid cuts will figure prominently in 2026 midterm election campaigning.
- The implied probability of a shutdown ticked up slightly in the last few hours, to just under 40%. Bettors likely believe that the required seven Republican Senators will ultimately fold when the House bill reaches the upper chamber.
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US TSYS: Light Pressure Stemming From UXY Block & BoC
Fresh session lows in TU through UXY futures comes on spillover from north of the border as BoC Governor Macklem notes that the Bank considered leaving rates unchanged today (against the delivered and expected 25bp cut).
- 2s10s trades back to session lows, but the moves are limited in the grander scheme of things, with that curve and aforementioned futures contracts sticking to the ranges established in recent sessions.
- The previously noted block sale in UXY futures also a factor in the downtick in Tsys.
