Diesel/Crude Price Gap Widens Amid Refining and Supply Concerns
What happened
The gap between diesel and crude oil prices is widening, with low sulphur gasoil trading above $200 per barrel equivalent while Brent remains near $110. This premium for usable fuel is attributed to current limitations in refining, transporting, and delivering the necessary fuel.
Why it matters
The current market squeeze is reminiscent of past fuel shortages, such as those in 2000 and 2022, where reduced refining capacity and the Russia-Ukraine war contributed to sharp increases in diesel margins.
Who's involved
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- DieselSpeculative
The company might face higher costs due to supply chain disruption and refining capacity limits.
- American AirlinesSpeculative
The airline could face increased operational costs due to high diesel and jet fuel prices.
- CostcoSpeculative
The membership store could face higher distribution costs driven by the increased price and scarcity of diesel fuel.