Updates
April 30, 2022: update.
March 14, 2022: update.
Original Post
Diesel: this is going to be one of the big energy stories of 2022.
- remember, Saudi just put in an order for multi-million bbls of diesel;
- now this: global diesel shortage raises risk of oil price spike, a repeat of conditions that led to record price in 2008; Reuters.
- pat on my back: I track the weekly EIA report and noticed the distillate fuel issue several weeks ago; pretty cool coming from someone who nothing about oil until the blog and input from readers;
- from Reuters:
- in 2008, similar situation helped propel oil prices to a record high;
- US: inventories are 21% below the pre-pandemic five-year average, and lowest level since 2005
- Europe: inventories are 8% below ... and lowest level since 2008;
- Singapore: inventories are 32% below ... and also lowest since 2008
- first question I would ask: why is Europe a relative outlier; this tells me the German economy is struggling;
Diesel, cont'd: loss of Russian crude will force European refiners to cut diesel output.
- reduction in output would coincide with tight diesel market
- Europe will need to pull crude supplies form further afield
- one-third of UK diesel imports come from Russia; no others come close.
Maybe now someone will re-invent waste-to-fuel concept that Mr Diesel had in mind when he invented it. (actually anticipated farmers to grow their own feedstock since intro of tractors yet disconnect with gas supply.
ReplyDeleteI wouldn't be a bit surprised -- farmers are pretty amazing -- what they come up with when confronted with adversity.
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