The world's oil refiners are proving powerless to make enough diesel, opening a new inflationary front and depriving economies of a fuel that powers industry and transport alike.
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While oil futures are rocketing, the rally pales in comparison with the surge in diesel. US prices jumped above $140 to the highest ever for this time of year on Thursday. Europe's equivalent soared 60% since summer.
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And it could get worse as Saudi Arabia and Russia have turned down the taps on production of crudes that are richer in diesel. On September 5, both nations - leaders in the OPEC+ alliance - announced they would prolong those curbs through year-end, a period in which demand for the fuel usually picks up.
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The situation is challenging for a global refining fleet that's been dogged by lackluster production for months. Searing northern-hemisphere heat this summer forced many plants to run at a slower pace than normal, leaving stockpiles stunted.
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There's also been pressure on them to make other products instead like jet fuel and gasoline, where demand has rebounded hard.
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All this comes on top of a global refining system that shuttered less-efficient plants when Covid-19 trashed demand. Now consumption is rebounding but many refineries are gone.
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There's still hope that the diesel crunch can ease. With cooler winter months approaching, the weather-related constraints on the refineries overall decrease - even if some of them will undergo routine seasonal maintenance.
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The restricted supply has economic consequences. The surge in US futures has been driven in part by truckers snapping up the fuel.
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While there has been growing hope that the US economy can avoid recession, an energy price spike - whether in gasoline or diesel fuel prices - could undermine much of that progress.
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The situation for diesel could have been worse because consumption growth hasn't been as robust as other parts of the barrel. The IEA's monthly report last week anticipated consumption growing by about 100,000 barrels a day this year. That compares with almost 500,000 barrels a day for gasoline and more than 1 million barrels a day for jet fuel and kerosene.
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