The diesel market is skyrocketing everywhere, a positive indicator for oil prices across the board.
In Asia, multi-year low inventories boosted fuel margins to a four-month high. Winters there are colder than usual and demand for transport, industrial and heating fuels is growing.
The continent is facing significantly less supply from China, after the refining giant cut fuel export quotas in its first allocation for 2022.
United States, diesel oil Prices have risen to a high not seen since 2014, making the cost of trucking, agriculture and – in parts of the country – home heating. The increase is a blow to the Biden administration’s efforts to rein in inflation.
They surged as US refineries began heavy maintenance season this month, when stockpiles were at an eight-year low. A fire at one of the country’s largest oil refineries lost more fuel production capacity late last year.
Rising jet fuel demand has also weighed on diesel output in recent months as refineries have ranged to switch between diesel and jet fuel, and they are increasingly opting for the latter. two.
That makes Europe the ultimate major consumer of diesel, and the market has also strengthened in part due to the global impact of China’s reduced exports.
The so-called crack spread, the fuel margin against crude oil, and the time differential represent the strength of an increasing difficulty instantaneous supply-demand balance.
Despite the strong market in Europe, the continent is still set to send large fuel cargoes to the US, further tightening the region’s market.
The sharp rise in prices is a positive sign for the broader oil market. Diesel – which is consumed in cars, trucks and heavy machinery among other things – raises the cost of a larger group of petroleum products known as distillates, which account for about a third of the total. three fuel consumption in the world.
Related videos:
