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Global distillate consumption has begun to decelerate in response to high prices and slowing manufacturing and freight activity. Part of the recent inventory build is seasonal, but part reflects manufacturers and hauliers cutting diesel use by rationalising production and consolidating loads.
Falling diesel demand reduces tightness in distillate markets and should ease pressure on oil prices over the coming months. Weaker freight activity also signals softer demand for transport fuel that feeds into freight and feed logistics costs.
reuters.comJohn KempJul 8, 2022After 79 past bearish macro events, ULSD / Diesel moved a median -1.0% over 5 sessions (39% higher; middle half -5.7% to +1.7%), and -1.5% over 20.
After 312 past bearish macro events, Crude Oil (Brent) moved a median -1.7% over 5 sessions (38% higher; middle half -5.4% to +2.3%), and -1.7% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
Slackening global distillate demand from high prices and weaker freight activity supports the bearish fundamental backdrop for diesel.
