Global diesel prices keep climbing up ahead of winter
- August 20, 2023
- Posted by: Quatro Strategies
- Categories: China, Europe, Rare Earths & Commodities
The global diesel market is experiencing high prices compared to the crude oil used to produce it, raising concerns about scarcity and potential impacts on inflation and industries that rely on diesel. Despite the fact that prices have been high before, the current state of the market is worrying due to the ongoing supply constraints and upcoming winter demand.
Stockpiles of diesel-type fuel in Europe and the US Atlantic Coast are expected to decrease in the coming months, leading to tighter supply conditions. Refinery curbs and shifts in crude types have contributed to reduced diesel supplies. In Europe, lower diesel yields from lighter crude slates and unplanned refinery outages are contributing to the tight supply situation.
China is being closely watched as its refiners await new fuel export quotas from the government. While ample Chinese diesel flows could help ease supply constraints, analysts suggest that strong domestic diesel demand might limit the relief provided by exports.
In the US, retail diesel prices have been rising consistently, contributing more to inflation than gasoline in August. Market conditions have made stockpiling a losing venture for American refiners this summer, similar to last year.
The diesel market is significant beyond just a few traders, as diesel is a vital fuel for supply chains and various industries. Hedge funds are increasing their bullish bets on diesel, and the fuel’s availability and price shocks can have implications for governments and industries worldwide.
The current situation highlights the challenges faced by nations as they transition away from fossil fuels while still relying on oil refineries. Recent heatwaves have further impacted refinery output, contributing to the ongoing supply constraints in the diesel market.
Interested in learning more?
Sign up for Top Insights Today
Top Insights Today delivers the latest insights straight to your inbox.
You will get daily industry insights on
Oil & Gas, Rare Earths & Commodities, Mining & Metals, EVs & Battery Technology, ESG & Renewable Energy, AI & Semiconductors, Aerospace & Defense, Sanctions & Regulation, Business & Politics.
Read more insights
Singapore-based Abaxx to introduce world’s first nickel sulfate futures contract
Abaxx, a new Singapore-based commodities exchange, is poised to introduce the world’s first futures contract for nickel sulfate in the coming months, following approval from Singapore authorities for the exchange and clearing house. This development reflects the growing demand…
EU accelerates critical minerals strategy with 47-project launch
The European Commission unveiled a list of 47 strategic projects on Tuesday aimed at boosting the EU’s domestic production of critical raw materials essential for its green transition and industrial security. These projects fall under the bloc’s Critical Raw Materials Act, which was adopted in 2023 and sets ambitious targets for sourcing key inputs: by 2030, the EU aims to domestically mine 10%, process 40%, and recycle 25% of its critical raw material needs.
“For a long time, raw materials were the blind spot in our industrial policy,” said EU industry commissioner Stephane Séjourné. “Europe has often preferred to buy most of the raw materials it needs almost exclusively outside its borders—until the COVID crisis and the war in Ukraine reminded us of the dangers of our addictions.”
Plunging lithium prices taking their toll on miners
Albemarle Corp, the world’s largest producer of lithium, is anticipated to announce a decrease in its quarterly profit due to declining prices of lithium. This drop in prices is attributed to concerns about diminishing short-term demand and oversupply in the market. Lithium miners…
