LONDON- Global stocks of diesel and other middle distillates have fallen to the lowest seasonal level since 2008, when similar shortages of these transport and industrial fuels helped to propel oil prices to a record high.
Distillate fuel oil inventories in the United States are 30 million barrels or 21 percent below the pre-pandemic five-year seasonal average and at the lowest level since 2005, the US Energy Information Administration said.
Stocks in Europe are 35 million barrels (8 percent) below the pre-pandemic five-year average at the lowest level since 2008, Euroilstock, which compiles inventory data on behalf of the European Union, found.
And middle distillate stocks in Singapore are 4 million barrels (32 percent) below the pre-pandemic five-year average and also at the lowest since 2008, according to the country’s Ministry of Trade and Industry.
Combined inventories across the three locations have fallen by 110 million barrels compared with the same point last year, as consumption has persistently outpaced production.
Demand for diesel and other middle distillates is highly geared to the economic cycle since they are mainly used in freight transportation, manufacturing, farming, mining and oil and gas extraction.
The rapid rebound in economic activity after the first wave of the pandemic and associated lockdowns, and its focus on diesel-intensive manufacturing and freight, has boosted use of the fuel.
At the same time, refiners have restrained crude processing to deplete the excess stocks that built up during the coronavirus recession and adapt to lower demand from passenger airlines for jet fuel.
But the continued depletion of distillate inventories has become unsustainable.
