Diesel prices could rise significantly, experts predict
Diesel prices could rise again as the Europe/Russia situation evolves.
HIGH POINT — Diesel prices hit their lowest level since April this week, falling 13 cents a gallon to an average of $5.13, according to the Department of Energy. In six weeks, prices fell just over 67 cents per gallon.
But will it persist? Will prices ever return to more normal levels? Probably not, according to John Kingston, editor at FreightWaves.
“The diesel world needs to take a very hard look at what’s going on with the whole Russian natural gas situation,” Kingston said. said Rachel Premack, editor of FreightWaves. “If you have a demand for energy that is currently being met by natural gas, and instead that’s not available and they’re going to diesel, that’s a new source of demand. diesel.”
Kingston believes demand for distillate fuel will increase as Europe enters the heating season, driving up prices. Oilprice.com has similar predictions.
“U.S. distillate fuel inventories typically increase during the summer season as refiners process crude into more gasoline to meet summer driving season demand,” he wrote in an August 7 post. “But that hasn’t been the case this year.”
In fact, distillate inventories fell in July by as much as 3 million barrels, the biggest seasonal drop since at least 1990, Kemp notes.
“In Europe, the impending EU embargo on Russian crude and products is prompting traders to source increasing quantities of diesel from non-Russian sources. The United States was one such source, and its exports reached 1.4 million bpd in July, the highest in five years. Much of the increase comes from Europe.
Check this article from FreightWaves for a closer look.