U.S. diesel crack spreads have broken above $100 for the first time, reaching a record high of $102.2, while inventories have fallen to their lowest level since 1996.
The spread between NYMEX near-month US diesel futures and WTI crude oil futures hit a record high of $102.2 per barrel this Monday, marking new records in five of the past six trading days. Meanwhile, as of August 7, US distillate fuel inventories, including diesel and heating oil, stood at 107.1 million barrels, the lowest level for this time of year since 1996. The market is facing multiple shocks, including an extended Russian export ban, escalating Middle East tensions leading to potential obstruction of the Strait of Hormuz, refining capacity bottlenecks, and overlapping seasonal demand. Wall Street institutions warn that the ripple effects of a diesel shortage on the real economy will continue to manifest.
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