Diesel Margins Top $100 a Barrel to Reach Record High as Supply Crunch Grows
The margin for making diesel from crude oil in the US has soared past $100 a barrel, setting new all-time highs as a global fuel-making crunch continues to exacerbate fuel prices. The widely watched gauge, known as the diesel crack spread, hovered around $100 a barrel on Tuesday, down slightly from record highs over $102 a barrel. The spread settled in triple digits for the first time on Monday.
The margin for making diesel from crude oil in the US has soared to more than $100 a barrel, setting new all-time highs as a global fuel-making crunch continues to exacerbate fuel prices.
- marten31
The refining bottleneck is the part people miss. Crude supply headlines get all the attention but margins blow up when you can't process what you have.
- leonidasrup
This should help with transition to electric vehicles.
On the other hand, batteries for EVs are produced in even smaller number of countries (mostly China) then oil is pumped (Middle east, US, Russia, Canada).
https://www.iea.org/commentaries/global-battery-markets-are-...
https://en.wikipedia.org/wiki/List_of_countries_by_oil_extra...
- Animats
This is a refining capacity problem, not an crude oil supply problem. The various wars have taken out refining capacity and transport capacity.
On the crude oil side, the US strategic petroleum reserve is declining rapidly.[1]
That took a hit during COVID and the early Ukraine war because production was down. Refilling started afterward, but didn't take it up to normal levels. There's still maybe a year of oil left.
[1] https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=W...
- toomuchtodo
Related:
https://en.wikipedia.org/wiki/Crack_spread
https://rbnenergy.com/market-data/3-2-1-crack-spread
https://www.eia.gov/todayinenergy/detail.php?id=1630
https://financialpost.com/news/posthaste-an-energy-shock-muc...
- ck2
highest Diesel price per gallon national average was $5.81 after covid June 2022
we are most certainly going to break that by the end of the year (it's $5.47 average today)
they are trying to use Strategic Oil Reserve (and maybe Venezuela) as a piggy bank
but all that's about to break badly, permanently
if this administration lets it go down to 70 million barrels despite the warnings by experts at 300 million, they'll never repair the damage