Diesel markets are soaring across world

Diesel markets are soaring across world

Energy















Bloomberg

Diesel markets are jumping everywhere, a positive indicator for oil prices more widely.

In Asia, the lowest inventories in years have driven margins from making the fuel to a four-month high. Winter there is chillier than usual and demand for transport, industrial and heating fuels are getting a boost.

The continent is contending with significantly less supply from China, after the oil refining giant slashed its fuel export quotas in the first allocation for 2022.

In the US, diesel prices have surged to highs not seen since 2014, driving up the cost of trucking, farming and — in parts of the country — heating homes. The surge is a blow to the Biden administration’s efforts to tame inflation.

They’ve surged as US refiners began a heavy maintenance season this month, when stockpiles there are already at eight-year lows. A fire at one of the country’s largest refineries took out even more fuel-making capacity at the end of last year.

Rising jet fuel demand has also eaten into diesel output in recent months because refiners have scope to toggle between diesel and jet fuel, and they’re increasingly choosing the latter.

That leaves