High Oil Prices Speed Up China’s Shift Away From Crude
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The average price of diesel in the United States hit $5.7832 per gallon on Thursday, which is just three cents lower than the record-high of $5.8159 in mid-June 2022, when the Russian invasion of Ukraine sent fuel prices to record highs, data from AAA showed.
The U.S. national average gasoline price is about $1 per gallon below the all-time high of $5.0165 from June 2022, but at over $4.10 a gallon now, the gasoline price is the highest it has been at this time of year, and is $1 higher than the average $3 before the war in Iran began at the end of February.
Gasoline prices are a concern for the U.S. Administration, which is pressuring refiners to find ways to lower prices at the pump, two months ahead of the mid-term elections in November.
Diesel prices are also a major concern, including for the U.S. economy and the interest rate path of the Fed, as diesel is essential for economic growth and inflation of the price of goods.
Diesel markets in the United States and globally have severely tightened in recent weeks, amid crippled fuel supply from the Middle East and Russia, due to the Iran and Ukraine wars, rising seasonal demand with the harvest season, and insufficient capacity elsewhere to compensate the lost diesel flows from the Strait of Hormuz and Russia.
The re-escalation in the Middle East and the Russian ban on diesel exports amid incessant Ukrainian drone attacks on refineries pushed middle distillate cracks to record highs this week.
“At this pace, we could even break the all-time diesel record ($5.819/gal) by Labor Day,” Patrick De Haan, head of petroleum analysis at GasBuddy, said on Wednesday.
The analyst also said that Gulf Coast spot diesel prices hit a record earlier this week.
“The market is short- buyers bidding up every drop like a housing market with too few homes…higher retail diesel prices coming *coast to coast*,” De Haan said.
What I Cover My focus spans the global energy landscape and the technologies reshaping it, specifically focusing on oil and gas, renewables, and tech-driven market…
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