[Reuters] Global stocks of petroleum products have fallen to critically low levels as refineries prove unable to keep up with surging demand for diesel

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www.reuters.com/markets/commodities/us-diesel-shortages-lift-refining-margins-record-2022-05-10/

Global stocks of refined petroleum products have fallen to critically low levels as refineries prove unable to keep up with surging demand especially for the diesel-like fuels used in manufacturing and freight transportation. The result has been a surge in prices refiners receive for selling fuels compared with prices they pay for buying crude and other feedstocks, boosting their profitability significantly. In the United States, refiners currently receive roughly an average of more than $150 per barrel from the sale of gasoline and diesel at wholesale prices, while paying only around $100 to purchase crude.
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SLOWDOWN AHEAD
There is scope for refiners to increase fuel production by postponing non-essential maintenance and running refineries flat out into the early autumn. And some room to adjust the output mix by switching from maximum gasoline to maximum diesel mode in downstream processing units. But any increase in diesel production is unlikely to be able to reverse the depletion of inventories fully and return them to pre-pandemic levels. Prices will therefore have to continue rising until they begin to restrain consumption or the economy enters a cyclical downturn.

 

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