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
Tariff fears hang over global manufacturing as Europe stabilizes, Asia falters
Factory activity around the world is showing mixed signals, with Europe seeing tentative signs of stabilization while many Asian economies continue to grapple with subdued demand — largely due to the uncertainty stirred by U.S. tariff threats. As policymakers weigh their next moves, this uneven backdrop adds urgency to trade negotiations with Washington amid fragile hopes for a global economic revival.
Across the euro zone, the HCOB manufacturing Purchasing Managers’ Index (PMI) compiled by S&P Global edged up slightly to 49.5 in June from 49.4 in May. This marked its strongest reading since August 2022, but still left the index below the critical 50-point line that separates growth from contraction.
Octopus Energy set to buy Shell’s UK, Germany home energy business
Shell is selling its home energy business in the UK and Germany to British energy provider Octopus Energy Group. This move is part of a broader deal in which the two firms will explore a partnership related to electric vehicle (EV) charging. Returns in the UK energy retail sector have been constrained in recent years as companies have grappled with rising wholesale costs and price caps imposed by regulator Ofgem.
EU turns to Greenland’s frozen edge to loosen China’s grip on graphite
Europe has just secured a new flank in its race to loosen China’s grip on battery minerals: a long-dormant graphite mine on the edge of the Arctic is being brought back to life and slotted directly into the EU’s strategic raw materials architecture. Greenland has granted an exploitation licence for the Amitsoq graphite deposit in the island’s south, giving London-listed GreenRoc Mining a 30-year permit to redevelop a site that last operated in 1922.
Backed by the European Raw Materials Alliance and now officially classed as a “Strategic Project” under the EU’s Critical Raw Materials Act, Amitsoq is designed to produce about 80,000 tonnes of graphite concentrate a year from roughly 400,000 tonnes of ore, making it one of the highest-grade flake graphite operations in the world.