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.