U.S. diesel demand fell to its lowest seasonal level in 26 years this March, reflecting the broader impact of a slowing economy. The U.S. Energy Information Administration reported that the product supplied of distillate, which fuels trucking, heating, and heavy industry, dropped to 3.67 million barrels a day. This marks a significant revision downward from previous estimates by the agency.
The decline in the diesel market serves as a critical warning signal for broader oil demand growth. Dennis Kissler, senior vice president for trading at BOK Financial Securities, noted that diesel consumption typically decreases as the economy slows, indicating future declines in demand for other fuels. Refining margins are already showing signs of weakness in Asia and have fallen from their earlier highs in the U.S.
“It’s a function of the slowing of the economies in Asia and the U.S. and how inflation is tightening consumer spending habits,” Kissler said. “They’re not going out and spending money like they were a year ago.”
As inflation continues to affect consumer behavior, the reduced diesel demand highlights potential risks for the overall oil market. This trend could have significant implications for future fuel consumption patterns and economic health globally.
Source:
https://www.ttnews.com/articles/us-diesel-demand-26-year-low
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