Kloza on Diesel Prices Hit Fresh Record-High

• Diesel prices have reached new all-time highs, 60 cents above the previous record set in June 2022.
• US refineries are operating at 97-98% capacity, but global refining capacity is down by about 7 million barrels/day, largely due to drone attacks.
• High diesel prices could lead to demand destruction and an economic slowdown, with heating oil costs in the Northeast projected to be 20-30% higher this winter.
• An export ban on diesel is considered a 'nuclear option' that could flush speculative money out of the market, but permitting reform for new refineries would take 1.5 years or more.

Tom Kloza, Gulf Oil Chief Oil Advisor, highlights that diesel prices have hit fresh record-highs, surpassing previous records by 60 cents. He emphasizes that while crude oil prices are often the focus, it's the diesel and gasoline bulk markets that truly need watching. Kloza warns of a potential economic slowdown due to demand destruction and anticipates the most expensive heating season in the Northeast by 20-30%.