Diesel is expected to remain in short supply as the northern hemisphere approaches the winter months, thereby raising its demand for heating. This comes as crude oil, the resource from which diesel is produced remains in short supply and relatively steeply priced. While the market has recovered marginally since the start of Russia’s invasion of Ukraine last year, it remains vulnerable, with unexpected issues such as surprise stock cuts threatening to rock the market.
“We should be building stocks now as they usually begin drawing seasonally from September,” Eugene Lindell, head of refined products at industry consultant FGE recommended. “There is a worry that stocks will not build sufficiently before October, and we will then start seeing draws from what threatens to be a low base.”
US retail diesel prices have been on a constant rise in August following a crude supply cut by Saudi Arabia, Russia, and a slew of OPEC+ allies. Europe’s yields of diesel-type fuel have since declined by 1.6% in July compared to the historic average.