Refining Bottleneck Sends Diesel to Record High
Diesel prices have reached a record high, driven by a global shortage in refining capacity. Disruptions in refineries abroad, including attacks on Russian facilities by Ukraine and issues around Middle Eastern refineries, combined with limited capacity in the US, are creating a bottleneck. Patrick De Haan of GasBuddy explained that increasing crude oil production alone will not solve the problem, as existing refineries are already operating at near-maximum capacity.
The record high diesel prices are a significant concern for the US economy, impacting transportation and supply chains. The lack of refining capacity means that even with ample crude oil, the ability to produce refined products like diesel is severely constrained, leading to inflated costs for consumers and businesses.
The discussion also touched on the disconnect between oil prices and refined product prices, China's reduced oil imports impacting refinery output, and the deferral of maintenance on refineries due to high crack spreads.
DIESEL PRICES REFINING CAPACITY PATRICK DE HAAN GASBUDDY UKRAINE WAR