Middle Distillates
Distillates: Diesel
The scare on low diesel stocks globally has subsided. With likely more heavy crude into refining slates, there would be more diesel yield as well, reversing the trend we saw in 2025
Balikpapan refinery upgrade is set to produce 50-60 kbd incremental diesel when operational in March
Distillates: Regrade
Feb SG regrade at 5-year highs, which does not seem very supported fundamentally given the absence of peak travel demand and heating requirements.
Distillates: Jet
Sing and NEA jet arbs are wide open to PADD-5
Jet premia in LA supported by higher than expected seasonal air travel, lower arbs from past month and El Segundo not yet resuming jet production
USWC refinery closures will likely bring more structural flows from Asia into LA in 2026
