Expectations of higher fuel prices in the United States and Europe
Traders expect fuel prices to rise in the United States and Europe during the coming period due to the decline in diesel supply compared to the strong demand, especially in the United States.
Despite economic slowdowns in the US and Europe and economic woes in China, the global diesel market appears tight and poised to enter the warming and harvest seasons with below-average inventories.
According to a report in the American “Oil Price” bulletin, the prices of medium distillates and diesel futures contracts have jumped in recent weeks, surpassing the increase in Brent crude prices, which rose to levels ranging between 80-85 dollars per barrel from the previous range of 75-80 dollars. Portfolio managers and speculators are betting Fuel deals are increasingly on higher diesel prices amid declining seasonal distillate inventories in the US and Europe, at a time when inventories usually build before the heating season.
Diesel inventories remain well below historical averages, suggesting that lower supply due to some refinery outages and stronger-than-expected demand could affect fuel supplies, especially if a colder winter comes.
Distillate stocks, which include diesel, are lower than usual in the United States, according to sources working in the US energy sector.
In its latest weekly oil inventory report last week, the Energy Information Administration said that in the week ending August 11, fuel inventories in the United States increased by 300,000 barrels.
According to Oil Price, inventories of distillate fuels are currently about 16% lower than the five-year average for this time of year.
Data from the Energy Information Administration showed that demand for distillates was lower than it was at this time last year.
Analysts say diesel stocks in Europe, which are held independently in the oil trading hubs of Amsterdam, Rotterdam and Antwerp, look very tight.
Globally, intermediate distillate inventories were built last week across all regions, consulting firm FGE said in a note on Friday.
“Although diesel inventories have been largely healthy in recent weeks, they are increasingly falling below the historical range for this time each week, putting upward pressure on distillate,” FGE said.
“The market appears to be concerned about an expected shortfall in gasoil inventories as we approach the onset of winter,” ING’s market strategists Warren Patterson and Ewa Manthey wrote in a note on Monday.
2023-08-23 11:19:32
#Expectations #higher #fuel #prices #United #States #Europe
