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Talk of Diesel Export Ban Deepens US Crude Futures’ Discount to Global Benchmark
Analysts said a ban could cut US refinery runs by 12% and fill Gulf Coast storage within a month.
- West Texas Intermediate crude futures traded as much as $12.02 a barrel under Brent futures on Thursday, the largest discount since May 6, as investors price in potential stranded diesel.
- President Donald Trump said Tuesday he backed a diesel export ban, though the White House denied reports of a 90-day prohibition on Wednesday, and Energy Secretary Chris Wright argued it would not control surging prices.
- Wood Mackenzie analysts said a diesel export ban would redirect a 700,000 bpd oversupply into storage, filling Gulf Coast inventories within a month, potentially forcing US refiners to cut crude runs by 12 per cent.
- Domestic diesel prices hit a record $6.528 a gallon this week, stirring political uproar, but analysts warn the crude discount indicates potential increases in gasoline prices while diesel costs may rise again.
- Surging freight rates driven by the war with Iran have increased shipping costs to around $50 million, while inflation fears threaten the Republican Party ahead of the November midterm elections.
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Talk of US export ban on diesel deepens US crude futures' discount to global benchmark
Washington's talk of a possible ban on diesel exports is widening the gap between US crude oil futures and the global Brent benchmark, a signal that markets expect US refiners to process less crude oil if their diesel output gets stuck at home.
·London, United Kingdom
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Total News Sources4
Leaning Left0Leaning Right1Center1Last UpdatedBias Distribution50% Center, 50% Right
Bias Distribution
- 50% of the sources are Center, 50% of the sources lean Right
50% Right
C 50%
R 50%
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