May 31, 2024
Diesel Demand Hits 26-Year Seasonal Low in US on Slowing Economy
Bloomberg News
,![Diesel fuel tanks at Jacobi Oil Service Inc. in Floyds Knobs, Indiana, U.S., on Wednesday, Oct. 20, 2021. With prices surging worldwide for heating oil, natural gas and other fuels, the U.S. government said Wednesday it expects households to see their heating bills jump as much as 54% compared to last winter, reports the Associated Press., Bloomberg Diesel fuel tanks at Jacobi Oil Service Inc. in Floyds Knobs, Indiana, U.S., on Wednesday, Oct. 20, 2021. With prices surging worldwide for heating oil, natural gas and other fuels, the U.S. government said Wednesday it expects households to see their heating bills jump as much as 54% compared to last winter, reports the Associated Press.](/polopoly_fs/1.2079836.1717182497!/fileimage/httpImage/image.jpg_gen/derivatives/landscape_620/diesel-fuel-tanks-at-jacobi-oil-service-inc-in-floyds-knobs-indiana-u-s-on-wednesday-oct-20-2021-with-prices-surging-worldwide-for-heating-oil-natural-gas-and-other-fuels-the-u-s-government-said-wednesday-it-expects-households-to-see-their-heating-bills-jump-as-much-as-54-compared-to-last-winter-reports-the-associated-press.jpg)
(Bloomberg) -- US diesel demand plummeted to its lowest seasonal level in 26 years in March, driven by slowing economic growth.
Product supplied of distillate — the fuel that powers trucking, heating and heavy industry — plunged to 3.67 million barrels a day, according to monthly data from the US Energy Information Administration. That figure marks a downward revision from the agency’s previous estimates.
The deteriorating diesel market is a warning signal that broader oil demand growth could be at risk, according to Dennis Kissler, senior vice president for trading at BOK Financial Securities. Consumption of the fuel tends to fall as the economy slows, and a slowing economy presages waning demand for other fuels. Refining margins are already showing weakness in Asia while, in the US, they’ve come off their earlier highs.
“It’s a function of the slowing of the economies in Asia and the US and how inflation is tightening consumer spending habits,” Kissler said. “They’re not going out and spending money like they were a year ago.”
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