Diesel Prices Higher Pt 2
From the Ag Information Network, I’m Bob Larson. With fall harvest underway, key input costs, including the rising price of diesel fuel, is putting the squeeze on growers.
GasBuddy’s Patrick De Haan says a bit of good news is that China is using a little less diesel this year for electricity generation …
DeHAAN … “But the global macro still pretty negative as Russia’s war in Ukraine continues. Russia tends to supply much of the world’s heavy oil, in addition to countries like Canada. So, Russia and the war in Ukraine is still having a pretty significant impact on diesel.”
De Haan says we also have to factor in our ability to produce diesel …
DeHAAN … “Also impacting diesel is the fact that refining capacity has been constrained over the past couple of years due to things like COVID and because of other refineries also shutting down due to natural events like fires. So, we’ve lost refining capacity. We’re down about a million barrels a day since prior to COVID and that’s having an impact on diesel prices as well.”
And, De Haan says let’s not forget hurricane season’s impact on our refining capabilities …
DeHAAN … “While gasoline prices do tend to fall in the fall, things like OPEC and refinery outages and hurricane season certainly can play a role. So, those are things to keep an eye on.”
De Haan says the switch to winter fuels doesn't necessarily
make things better overnight.
