Key Developments
- Refinery Shutdowns: Refineries in California and Europe are closing, reducing global diesel production capacity.
- Geopolitical Risks: Russian refineries are under attack, and Ukraine is deploying stronger missiles, increasing supply uncertainty.
- Refining Bottlenecks: Even if crude oil enters oversupply, reduced refinery capacity is likely to keep diesel prices elevated.
Market Snapshot
- Current Diesel Price: Near $60 per barrel.
- OPEC Actions: OPEC has announced a production increase.
- Industry Insight: StoneX recommends this as a strategic time to lock in fuel contracts.
U.S. Production Outlook
- Rig Count: U.S. rig counts are down by 45 compared to last year.
- Short-Term Supply: No significant increase in domestic production is expected in the near future.
Takeaway
With tightening global diesel supply, ongoing refinery disruptions, and limited new production, diesel prices are expected to remain high. Strategic fuel purchasing and contract locking are advised in the current market environment.
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