Cathay Pacific Haitong: The split in US refined oil products showed a strong continuation of the split in diesel in August

The Zhitong Finance App learned that Cathay Pacific Haitong released a research report saying that as summer comes to an end and schools start one after another, road travel in the US decreases compared to early summer, and gasoline demand weakens marginally; air travel is still resilient. At the same time, the northern hemisphere enters the agricultural harvest season, and demand for aviation coal and diesel is supported. On the supply side, US refineries as a whole have maintained high load operation, gasoline production has remained high, while aviation coal production has continued to decline since the end of July, and distillate stocks are also at a historically low level during the same period. Overall, the marginal weakening of gasoline demand combined with supply remained high, and the gap fell to a high level; diesel was driven by global supply disruptions, low inventories, and seasonal demand, and aviation coal also strengthened under the combined effects of strong aviation demand and falling production.

Cathay Pacific Haitong's main views are as follows:

Price spread data for August 2026 showed that there was an overall improvement in various sectors, but the performance of different products was still divided.

(1) In the refined oil sector, the gap between gasoline and diesel from major domestic refineries rose 53.4% and 42.4%, respectively; the gap between overseas diesel and aviation coal remained strong, and the gasoline gap declined somewhat.

(2) The olefin and downstream sectors strengthened significantly. The price spreads of ethylene-naphtha and propylene-naphtha rose by 159.5% and 136.5% respectively, and the price spreads of propylene - propane and butadiene - naphtha also improved markedly.

(3) The overall price spread of aromatic hydrocarbons was fixed, and the price difference between toluene and naphtha rose by 111.3%; the performance of the chemical fiber sector was divided, the PTA-PX spread improved, and the price spread of polyester bottles and PA6 fell.

(4) Other chemicals are clearly differentiated, price differences related to butyl acrylate and dimethyl carbonate have improved, and price differences related to maleic anhydride-n-butane, methylene ketone-mixed C4 and rubber are under pressure. Overall, in August, the gap between domestic refined oil products continued to improve. Overseas diesel and aviation coal remained high, the price spread of olefins and aromatic hydrocarbons rebounded markedly, and the performance of downstream chemical fibers, rubbers, and other chemicals diverged.

In August, the difference in gasoline and diesel cracking prices at major domestic refineries continued to improve month-on-month.

On the demand side, August is still the peak summer travel season. Tourism and self-driving travel support gasoline consumption; although diesel is disrupted by factors such as high temperatures and rainfall during the month, demand gradually shifts from off-season to peak season as the traditional peak consumption season approaches. On the supply side, the low load operation of the refinery in the early stages kept domestic refined oil resources tight. In August, refinery maintenance was completed one after another, and the operating load continued to recover. Overall gasoline and diesel inventories showed signs of stopping falling, but they were still low. On the price side, the rise in crude oil prices during the month was transmitted to the refined oil product side, compounded by low inventories and tight resource support. The increase in the wholesale price of gasoline and diesel was higher than the increase in crude oil costs, driving the cracking price gap to widen further.

In August, the split performance of US refined oil products diverged. The gap between diesel and aviation coal continued to strengthen, and the gap in gasoline fell to a high level.

As summer comes to an end and schools start one after another, road travel in the US has decreased compared to early summer, and demand for gasoline has weakened marginally; air travel is still resilient. At the same time, the northern hemisphere enters the agricultural harvest season, and demand for aviation coal and diesel is supported. On the supply side, US refineries as a whole have maintained high load operation, gasoline production has remained high, while aviation coal production has continued to decline since the end of July, and distillate stocks are also at a historically low level during the same period. Overall, the marginal weakening of gasoline demand combined with supply remained high, and the gap fell to a high level; diesel was driven by global supply disruptions, low inventories, and seasonal demand, and aviation coal also strengthened under the combined effects of strong aviation demand and falling production.

The price difference of olefins in oil was significantly fixed in August, and the pricing of the product improved compared to naphtha.

The price difference between propylene and naphtha widened in August compared to July; the price difference between ethylene and naphtha widened at the same time, reversing the narrowing trend in July. Prices in the domestic propylene market were strong in August, mainly supported by the cost of higher international oil prices, which were jointly driven by centralized maintenance of superimposed installations, tightening supply due to typhoon disturbances, and widening gaps in some downstream external procurement gaps. The average monthly price of propylene in Shandong was 8,543 yuan/ton, up 5.16% from the previous month. The price spread of ethylene and propylene rebounded simultaneously, and the price performance of olefin compared to raw materials increased. Previously, the relative squeeze on the cracking price difference on the raw material side eased.

Risk warning: macroeconomic policy changes; large fluctuations in crude oil prices; force majeure; changes in the geographical situation; demand falls short of expectations, etc.