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The United States and Europe are struggling to produce enough diesel to heat homes, a situation that is expected to worsen as winter approaches.
Retail diesel is at the highest price relative to gasoline in more than a decade as parts of Europe and the United States run out of supply.
The European diesel market has shown signs of strain since the invasion of Ukraine jeopardized the continent’s largest external source of supply. From February, the 27 EU countries will ban maritime fuel supplies from Russia. In the United States, stocks of distillates – the category that includes diesel and fuel oil – are the lowest seasonally since at least 1993.
The price of fuel is expected to continue to rise relative to gasoline through the end of the year, according to Wood Mackenzie Ltd., a consultant.
The premium will then remain “broad until the second quarter of 2023, when petrol strengthens for the summer driving season and distillates have rebalanced after the EU ban”, said Alan Gelder, vice-president Refining, Chemicals and Petroleum Markets at WoodMac via email. .
A wave of strikes at refineries in France, combined with other unplanned outages in Europe and the United States, has exacerbated the supply shortage in recent weeks. On-road diesel is a product very similar to heating oil, the demand for which generally increases in winter.
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