Refineries worldwide are facing challenges in meeting the rising demand for diesel, exacerbated by disruptions in global oil flows caused by OPEC+ output reductions and the conflict in Ukraine. According to Wood Mackenzie Ltd., the proportion of diesel in global refinery production is expected to decrease by 1.5% during this quarter compared to the same period a year earlier. This reduction equates to approximately 1.2 million barrels per day, a quantity roughly equivalent to the combined diesel output of Germany and the United Kingdom. A shortage of diesel could pose significant challenges as demand increases in preparation for the upcoming northern winter.
Perspective: Distillate inventories in the U.S., Europe and Singapore have increased month-on-month in September, although the U.S. is 21 million barrels below the seasonal average and Europe is 25 million barrels below the seasonal average as diesel cracks outperform all other products.
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