Business & Investment

Diesel market is skyrocketing all over the world

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The diesel market is skyrocketing everywhere, providing a positive indicator of oil prices.

In Asia, with the lowest inventories in a few years, the margin has increased from fuel production to a four-month high. Winters are colder than usual, and demand for transportation, industrial and heating fuels is increasing.

The continent is fighting a significant decline in supply from China after the oil refinery giant reduced its fuel export quota in the first allocation in 2022.

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In the United States, diesel prices have skyrocketed to unprecedented highs since 2014, pushing up the cost of trucking, agriculture, and home heating in some parts of the country. This surge has hit the Biden administration’s efforts to curb inflation.

They surged this month as US refiners began a major maintenance season when stockpiles were already at their lowest levels in eight years. At the end of last year, a fire broke out at one of the largest refineries in the country, losing more fuel production capacity.

As refiners have room to switch between diesel and jet fuels and are increasingly choosing the latter, increasing demand for jet fuels has also sunk into diesel output in recent months.

As a result, Europe is the last major diesel consumption center, and the market is strong in Europe as well, partly due to the global impact of China’s declining exports.

So-called crack spreads, fuel margins for crude oil, and time spreads, which indicate a strong immediate supply-demand balance, are recovering sharply.

Despite Europe’s strong markets, the continent is still set to send large fuel cargo to the United States, further tightening regional markets.

Strong prices are a positive sign of the wider oil market. Diesel, especially consumed in automobiles, trucks and heavy machinery, drives the cost of a broad group of petroleum products known as intermediate fractions, which account for about one-third of the world’s fuel consumption.

— Written by Elizabeth Low, Jack Wittels, Chunzi Xu

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Diesel market is skyrocketing all over the world

https://www.ttnews.com/articles/diesel-markets-are-soaring-all-over-world Diesel market is skyrocketing all over the world

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