Diesel Fuel Settles (CONT’D FROM PAGE 1)
Europe’s increasing demand for diesel affects pric- es everywhere, given the commodity status of oil and its distillates. “One nation’s demand affects everyone,” said Schaeffer. “We are seeing a whole trickle-down scenario as more people try to use a product that has become less available.” The global nature of diesel is responsible for its elevat- ed pricing in the U.S., despite the nation’s export of rough- ly one million barrels of the distillate every day. “The US is a net exporter of oil and petroleum products but is still as dependent and as vulnerable as ever to global market forces,” said Williams-Derry. “We don’t get a cheaper price just because we are producing more oil or because we have a lot of refinery capacity. We pay the same price as anyone else who is avoiding Russian oil.” Upward Pressures While the Ukraine war is the major driver of higher diesel costs, it’s not the only one. “A number of factors have put upward pressure on retail prices,” said Andrew M. Lipow, President of Houston-based Lipow Oil Associ- ates. “One is the post-pandemic reopening of economies around the world.” People are traveling more, and that means greater demand for the jet fuel which pulls from the same oil resources required for diesel. And more fuel is needed for the greater number of trucks delivering capital goods and consumer merchandise. The rebound in global demand is happening at a time
Russia produces about 10 percent of the oil from which the world refines diesel. Europe is especially dependent on Russia for its supply. “The war has disrupted the Euro- pean market, either completely eliminating it or dramati- cally reducing it,” said Allen Schaeffer, Executive Director,
Diesel Technology Forum. “That means that folks in Eu- rope and other countries that might have done business with Russia in the past now are scrambling to find fuel in other places.” Spooked by disruptions in natural gas deliv- eries from Russia, Europe is also stockpiling diesel in case it’s needed for home heating this winter.
CONTINUED ON PAGE 28
26 December 12, 2022
www.boardconvertingnews.com
Made with FlippingBook - PDF hosting