Winter Diesel Brings Shock
Diesel and other fuels like heating oil and gasoil make the industry work like a clock. They power factories and heat homes.
Diesel futures slumped to record low and left diesel in shock when Russia, the main provider for Europe, invaded Ukraine on Feb. 24.
The six-month stretch in Euro diesel futures moved into a peak recession of approximately $600 a tonne.
In a seriously affected market, current prices trade at a premium for future deliveries, driving it unreasonably expensive for traders to store and profit from diesel.
The spread presently stands at approximately $100 a tonne; well beyond levels for this time of year.
Demand Grows Higher
Record high and dry temperatures in Europe caused a significantly low level of water in the Rhine river, representing a crucial canal for moving fuel from the big tank farms and oil refineries in ARA to France, Germany, and Switzerland.
The water level in Kaub, Germany presently is at 42 cm. Germany’s electronic waterway information service for inland shipping, or ELWIS, expects the levels to decrease to 34 cm in the next few days.
As stated by consultants FGE Energy, 240,000 barrels per day (BPD) of oil products crossed the Rhine to be offloaded in Germany in 2021, higher than 10% of the country’s oil demand.
Due to the current water levels, barge owners want to avoid setting into the riverbed. Hence, they are loading their carrying vessels at a decreased capacity. 1/4th or less of a total 2-3k capacity.
The post Winter Diesel Brings Shock appeared first on forexinsider24.com.