For the Quarter Ending March 2024
North America
In the first quarter of 2024, the diesel pricing landscape in North America demonstrated notable fluctuations influenced by several key factors. Geopolitical tensions and the ongoing effects of international supply chain disruptions, including the impact of the Russia-Ukraine conflict, exerted significant upward pressure on crude oil prices, which in turn affected diesel costs across the region. The U.S. and Canada, as major oil producers, experienced somewhat stabilized diesel prices due to their capacity to leverage domestic production against global price increases. Demand for diesel in North America increased as economic activities intensified, particularly in sectors such as transportation, manufacturing, and logistics, which are rebounding strongly post-pandemic. This surge in demand contributed to the upward trend in diesel prices. Moreover, the harsh winter conditions typical of the first quarter further drove demand for heating oil, a byproduct of diesel, compounding the pressure on diesel supplies and pricing.
On the supply side, refinery outputs in North America were periodically hampered by scheduled and unscheduled maintenance activities, which slightly tightened the diesel market. However, strategic petroleum reserves in the U.S. were occasionally tapped to alleviate extreme price spikes, providing temporary relief when market conditions became overly strained.
As the quarter closed, the diesel market in North America was characterized by cautious optimism, with industry analysts closely monitoring the interplay between domestic production capabilities, global crude oil market dynamics, and regional policy developments that could influence diesel pricing as the year progresses. Thus, the end of the quarter Diesel price in the USA stands at USD 4.02/Gal, DEL-Washington.
South America
In Q1 2024, South America's diesel prices were subject to a complex web of influences. Global crude oil price fluctuations, propelled by geopolitical tensions and economic uncertainties, had a direct impact on diesel costs, especially given the region's reliance on imported oil. Exchange rate volatility added another layer of challenge, with currency fluctuations affecting the cost of oil imports and, consequently, diesel prices.
January saw Brazil's entry into OPEC+, stabilizing diesel production but experiencing slowed GDP growth. February witnessed a slight price increase due to heightened road freight movement and supply constraints, while March saw a decline in demand amid seasonal fluctuations and economic slowdowns. Despite challenges, Q1 2024 observed relative stability in South America's diesel prices amidst various internal and external factors, signalling resilience in the market.
Domestic refining capacity played a pivotal role in shaping diesel pricing dynamics. Countries with limited refining capabilities faced higher prices due to the necessity of importing refined diesel, contrasting with those with robust refining infrastructure, which enjoyed greater stability. Government policies, including subsidies and taxes, wielded considerable influence over diesel pricing, with policy adjustments potentially mitigating or exacerbating the impact of rising global prices.
Overall the first quarter of 2024 presented a mixed landscape for diesel prices in South America, marked by a delicate balance of internal and external factors. Hence, the prices of Diesel in South America stands at BRl 5.85/ltr, FD-Rio di Janeiro in the ending of quarter.
APAC
In the first quarter of 2024, China's diesel market exhibited remarkable stability, largely due to strategic policy management and consistent supply chain operations. The Chinese government's use of substantial strategic petroleum reserves played a pivotal role in stabilizing diesel prices. By supplementing the domestic market with these reserves, the potential volatility caused by fluctuating global crude oil prices was effectively mitigated.
Moreover, China's diesel market was insulated from international price shocks by a robust buffer system and a strategic focus on enhancing domestic refining capacities. These measures allowed the country to adjust more gradually to global oil price fluctuations, avoiding abrupt changes in diesel prices.
Towards the quarter's end, diesel prices showed a modest improvement of 3% amid significant global oil market volatility. Geopolitical tensions in the Middle East and anticipated production cuts by oil-producing countries drove oil prices upward. However, hawkish signals from the Federal Reserve and rising US crude inventories exerted downward pressure, contributing to ongoing oil price fluctuations. Despite challenges such as limited domestic refining capacity and scheduled refinery maintenance reducing production, diesel demand surged due to pre-building stockpiles and seasonal fluctuations.
Additionally, the market's stability was underpinned by moderate demand throughout the quarter, which did not spike significantly and therefore did not strain the supply. Hence, the prices of Diesel in China stands at USD 1030/MT, Ex-Beijing.
For the Quarter Ending December 2023
North America
Diesel prices in the North America region during the fourth quarter of 2023 (Oct to Dec) were influenced by several key factors. Firstly, there was a high supply of diesel in the market due to record oil production in the USA, reaching 13.2 million barrels per day. This increased supply led to a bearish market sentiment. Secondly, the demand for diesel was moderate, with weaker demand in Europe and Asia due to refinery maintenance and a decrease in global oil demand. Finally, the geopolitical tensions in the Middle East and concerns about supply disruptions also impacted diesel prices.
In terms of the USA, which experienced the most significant changes in diesel prices, there was a bullish market sentiment. The supply of diesel was low due to a decrease in domestic crude oil inventory and the impact of extreme flooding in parts of the country. On the demand side, the Consumer Price Index (CPI) in the USA grew at a faster rate in August, raising concerns about future rate hikes. Additionally, European oil refineries reduced their maintenance schedule in the diesel unit to take advantage of high diesel and gasoline demand.
During this quarter, there were no reported plant shutdowns that affected diesel prices in the North America region. The latest price of diesel in the USA at the end of the fourth quarter of 2023 was USD 4/Gallon, DEL-Washington.
APAC
In the APAC region, the Diesel market in the fourth quarter of 2023 witnessed several significant factors that influenced prices. Firstly, a series of production cuts by OPEC+ members led to supply shortages, supporting Diesel prices. Additionally, the escalation of the conflict between Israel and Hamas caused uncertainty in the market and put upward pressure on crude oil prices. Furthermore, China, being the largest oil importer in the world, experienced a moderate to high demand for Diesel, driven by the recovering economy and increased manufacturing productivity. Notably, there were no reported plant shutdowns during this quarter. Focusing on China, the country experienced a moderate to high demand for Diesel, driven by the recovering economy and increased demand from the trucking, farming, and manufacturing sectors. The price of Diesel in China in the fourth quarter of 2023 showed a 4% increase when comparing the first and second halves of the quarter. Compared to the same quarter in the previous year, there was a 3% decrease in Diesel prices. Furthermore, there was an 8% decrease in Diesel prices from the previous quarter of 2023. In conclusion, the Diesel market in the APAC region in the fourth quarter of 2023 was influenced by factors such as OPEC+ production cuts, the Israel-Hamas conflict, and the recovering economy and increased demand in China. The price of Diesel in China at the end of the quarter was USD 1035/MT (USD/MT) Ex-Beijing.
Europe
Throughout the fourth quarter of 2023, diesel prices in Europe have remained a major concern for consumers and businesses, primarily due to the ongoing war in Ukraine. The conflict has disrupted global oil supplies, leading to a surge in crude oil prices. Concurrently, refinery outages in Europe and the weakening euro against the US dollar have further constrained diesel supply and heightened costs. In June 2023, diesel prices reached record highs, averaging over €2 per Liter. Although there has been a slight decrease since then, prices still remain significantly elevated compared to a year ago. Across major European countries, diesel prices in Q4 2023 have seen declines compared to the previous quarter. In France, Germany, Italy, Spain, and the United Kingdom, prices have averaged Euro 1.92, Euro 1.95, Euro 2.01, Euro 1.90, and GBP 1.90 per Liter, respectively. The exorbitant diesel costs have had profound effects on the European economy, leading to increased transportation expenses for businesses and higher prices for goods and services passed on to consumers. Household budgets have also felt the strain, particularly for those reliant on diesel cars. In response, some European governments have implemented measures such as tax cuts, subsidies, and fuel vouchers, though their effectiveness remains limited. The uncertain outlook for diesel prices is influenced by ongoing geopolitical conflicts, the pace of global economic recovery, the development of alternative fuels, and potential government policies. The complex situation suggests that diesel prices in Europe are likely to remain high in the coming months.
South America
Overall, the Diesel market in South America experienced volatility due to geopolitical tensions, production cuts by OPEC countries, and strong demand in the region. These factors, along with the appreciation of the Brazilian real and the price changes by Petrobras, contributed to the fluctuations in Diesel prices during the quarter.
Firstly, the ongoing conflict in the Middle East and the attack by Hamas on Israel led to concerns about crude oil supply, resulting in a potential increase in prices. Secondly, the reduction in crude oil production by OPEC countries, particularly Saudi Arabia and Russia, contributed to tighter supply and higher prices. Additionally, the strong domestic demand in Latin America, combined with the recovering market in China, put further pressure on Diesel prices.
In Brazil, the largest country in South America, there were significant price changes during the quarter. The Brazilian real appreciated by 1.8% in October, which had an impact on Diesel prices. Furthermore, the state-owned company Petrobras increased its Diesel prices, leading to a significant hike in October.
The trend for Diesel prices in Brazil during the fourth quarter showed an increase of 4.0% in October, followed by a 1.0% increase in November. However, there was a significant decrease of 4.0% in December.
For the Quarter Ending September 2023
North America
Third quarter front month prices of Diesel in North America have been lower than the previous month's trading prices. US diesel demand has fallen despite economic growth, according to an EIA report. Consumption in the trucking, freight, and construction industries was reported as moderate at the start of this quarter. Diesel prices began climbing upwards from August amid tighter-than-expected crude oil supplies. The number of US oil rigs dropped, and a fire at a Louisiana refinery created some ambiguity in the Diesel market. Moreover, during August, North America battled with inflation. After a statement on the possibility of further rate hikes by US Federal Reserve Chairman Jerome Powell, the dollar rose to a 3-month high on Friday. Higher interest rates can result in a sluggish economy. A decrease in domestic crude oil inventory this month supported the price rise further in September. According to EIA’s recently released petroleum status report on Sept. 27, U.S. crude oil inventories decreased by 2.2 million from the week ending Sept. 15 to the week ending Sept.22. The Baker Hughes count dropped by 11, standing at 149. Moreover, according to traders, oil refineries cut down the number of maintenance schedules in the Diesel unit since they wanted to earn more margins amid high Diesel and Gasoline demand and less inventory. Thus, as of September, Diesel prices in North America closed at USD 4.52 per gallon, DEL-Washington.
APAC
Front month Diesel prices in Q3 showed a significant uptick backed by oil production cuts by OPEC+ countries. China’s diesel exports were weak throughout July. Chinese players diverged towards feeding petrochemical plants, rather than to feed oil refining plants to produce transport fuel such as Diesel, Gasoline, and Jet fuels, to cater to domestic petrochemical demand. Thus, the prices as of 31st July closed at USD 1090 per MT, Ex-Beijing, with an incline of 14.3% compared to the previous month's Diesel prices. Supply cuts by major oil-players and anxiety about a global economic downturn led to a Diesel price increase in emerging economies like India. Moreover, the AAP government increased retail prices of diesel by 88 paise with added tax. Demand in the power sector was high due to eccentric weather and higher-than-normal temperature driven by El Nino. Prices gained stability in August. Factors such as an increase in shipments of Iranian crude oil to Asia, China’s skeptical economic growth, increased operations in domestic refineries, a hotter summer, India’s increasing crude oil consumption all balanced the Supply-demand curve. In September, the announcement of Saudi Arabia and Russia’s voluntary production cut till the end of this year supported the price hike in China. However, India’s Diesel prices witnessed a significant drop of 12.6 percent since the Indian Government reduced duties on Diesel. High Diesel export volume to Europe and low freight rates in the Asia-Europe lane supported India’s trade deficit balance amid lower domestic fuel prices. Thus, as of September 29, Diesel prices in India closed at USD 1.17 per litre, Ex-Delhi.
South America
At the start of the second quarter this year, Diesel prices in Brazil registered a decline of 2.57% from the previous month. The major reason behind this decline was an overflow of discounted Russian crude oil. Diesel prices in Brazil bounced back with a slight hike after Petrobras, a Brazilian state-run oil company, raised its Gasoline and Diesel prices in the second week of August amid a global oil price hike. A tight market amid global demand was reported in August. According to the emerging market league table, Brazil maintained its second rank with the highest import cover and top stock market performance. However, the Brazilian IPCA, the benchmark inflation index observed by the Central bank of India, jumped to a higher-than-expected forecast of 4.2% y-o-y in August, exacerbating the pace of rate hikes by the Central government. Diesel prices in South America’s largest economy witnessed a significant hike since the price hike announcement both by domestic players Petrobras and internationally by OPEC countries. According to EIA’s recently released report, the oil rig count in the west American region decreased. On the international front, Crude oil prices could further surge because of a recent attack by Hamas on Israel. Thus, Diesel prices in Brazil as of Sept. 29 hovered around USD 5.8 per gallon, Ex-Rio de Janeiro.
For the Quarter Ending June 2023
North America
The prices of Diesel in the US market have declined in the US market as of first half of Q2 and then decremented in the second half. This was due to lower demand from the downstream power and logistic sector in the first half of Q2 as high inflation and rising interest rate continue to grip the market sentiments and then in the second half as rising economic stability and controlled inflation rate created positive Diesel market sentiments. Furthermore, feedstock crude oil prices declined which led to further decline in prices of Diesel in the US market. In Addition, there was weak cost support from the price of Natural gas in the first half of Q2 and then increment in the second half of Q2 support price trend in the Diesel market. Additionally, the demand from the international market has remained weak which further led the prices of Diesel downwards. In Addition, the plants were operating at stable rate with weak demand from the downstream industry which led to adequate inventories level to meet downstream demand. Thus, at the end of the quarter, the prices of Diesel were stated at USD 3.92/Gal.
APAC
The prices of Diesel in the Chinese market have shown constant decrement as of Q2, this was due to decline in demand from the downstream industry like fuel and logistic. Furthermore, declining exports and deflation problem in the China created overall negative market sentiments for Diesel. Furthermore, there was free flow Russian crude oil in the market which led decrement in the upstream crude oil prices. Furthermore, coal prices have decremented in the Chinese market as there was free flow of cheap imports which led to decrement in input production costs. In Addition, the plants were operating at lower due to weak downstream demand. Moreover, there was wait and watch sentiment in the market due to constant declining prices. Whereas, in the Indian market prices throughout Q2 remained stable on the backdrop of constant demand from the downstream industry like fuel, logistic and power. Thus, at the end of the quarter Q2, the prices of Diesel were stated at USD 954/ton.
South America
The Diesel market in Brazil has declined throughout the Q2, this was due to decrement in the prices of feedstock crude oil, rising Diesel imports from the Russian market. Furthermore, crude oil prices dropped which led to decrement in input production cost. There was free flow of imports from the international market which led to adequate inventories in the market. Additionally, the plants were operating at normal rates with weak downstream demand which led to overflow of inventories in the market and bound seller to offer discount to increase market transaction. In addition, due to constant declining prices there was negative market sentiments and there was wait and watch sentiments in the market buyers. Moreover, feedstock Crude oil prices decremented which led to drop in the production cost. Furthermore, there was hesitance in the market for procurement of large orders. Thus, as of end of Q2 in June the prices of Diesel were stated BRI 5.05/ltr FD Rio de Janeiro Brazil.
For the Quarter Ending March 2023
North America
The Diesel price trend showcased bearish movement throughout the 1st quarter of 2023. Initially, prices fell amid declined exports to the importers and weak supply chain activities amid the decline in upstream WTI Crude oil prices, which reduced the cost support. During the mid-quarter, the orders diminished from the Asian importers amid sanctions on Russian products and increased production rates. Due to this, the domestic inventory levels remained firm till the end of the quarter, and prices decreased marginally amid volatile upstream Crude Oil prices and shifting cost support. At the end of the quarter, Diesel prices in the USA hovered at USD 4.13/gal.
Asia
The diesel price trend showcased mixed sentiments in the Asian region during Q1 of 2023. In the first month of the quarter, Diesel prices surged due to increased Crude Oil prices by OPEC+ and decreased diesel fuel exports by the US. However, from the mid-quarter, prices fell due to increased oil imports amid improvement in supply chain activities. Due to increased imports and a decline in freight charges, inventory levels remained firm, and prices fell till the end of Q1 amid volatile upstream costs. While in India, Diesel prices stagnated from mid-quarter till the end of the quarter by the domestic suppliers amid increased Russian Crude oil imports and production rates. At the end of Q1, 2023, Diesel prices in China were witnessed at USD 1105/ton.
South America
The Diesel price trend shifted sentiments in the South American region during quarter 1 of 2023. Initially, the price trend was stable, and prices rose marginally due to a rise in demand from importers. At the same time, the federal reserve exempted fuel taxes amid ease in the inflation in the country. During the mid-quarter, prices fell amid increased production rates and increased imports of Russian Crude oil amid imposed European ban on seaborne imports of Russian Crude oil from February 5. Consequently, the Diesel price trend remained bearish till the end of the quarter. The federal board further reduced fuel taxes to improve offtakes and sales of diesel. At the end of the quarter, the Diesel prices in Brazil hovered at Brazilian Real 5.94/ltr, Min.
For the Quarter Ending December 2022
North America
In the North American region, the Diesel price trend fluctuated during quarter IV of 2022. Initially, during the first month of Q4, prices inclined on the back of rising inflation amid high demand from global importers due to production cuts by OPEC+ refineries, as many refineries went under maintenance turnaround, which caused a fall in the inventory levels. After that Diesel price trend shifted, and the prices witnessed a reduction due to a decline in demand from importers like China due to declined consumption from the power and logistics sector amid a rise in covid cases. In the final month of the quarter, prices inclined again due to a contraction in refinery run rates as a precaution amid freezing temperatures and firm demand for fuel. At the end of the year, Diesel prices in the USA settled at USD 5.26/gal.
Asia
Diesel prices showcased mixed sentiments during quarter IV in Asia. In India, prices decreased initially due to firm inventory levels because of previously declined offtakes during monsoon. Diesel prices increased at the end of the quarter due to increased demand from the power sector during winter. While in China, prices increased during the first month due to increased demand for fuel from the agriculture sector and upstream supply shortages from OPEC+ due to production cuts. Then the trend shifted, and prices decreased from mid-quarter till the end of Q4 due to weak demand from the power and logistics sector amid covid related restrictions. At the end of Q4, Diesel prices in China settled at USD 1044/ton.
Europe
At the beginning of Q4, Diesel prices in Germany settled at Euro 2.1/L. The diesel price trend shifted sentiments during the initial week of Q4 prices soared due to high upstream costs amid supply shortages from Russia and production cut by OPEC+ and then suddenly declined due to a decrease in upstream prices on the back of a decline in demand from the importers. During the mid-quarter, prices remained stable and rose slightly due to increased input costs. In the final month, prices declined due to sluggish offtakes amid sluggish fuel demand than expected due to milder winter.
For the Quarter Ending September 2022
North America
Diesel prices decreased throughout quarter III of 2022 in the North American region. A consistent drop in upstream crude oil prices reduced the production costs of Diesel throughout the quarter on the back of a reduction in demand from Asian importers. From the second month of Q3, Diesel prices fell noticeably due to a significant decline in the American Truck Tonnage Index and indicated less consumption. Also, the reduction in manufacturing activities declined consumer demand for fuel and offtakes. It increased domestic inventories, and after a plunge of 4.6% in the previous quarter's discussions, Diesel prices in the USA settled at USD 4.9/gal.
Asia
In China, Diesel prices decreased consistently due to reduced demand and weak upstream Crude oil prices. During summer, demand from China and the southeast countries declined in the Asian logistics segment due to a reduction in operational rates during summer on government instructions. On the other hand, in India, a stable price trend was observed on the back of reduced demand sentiments by the consumers during the monsoon and a reduction in construction and logistic activities. After an average decrease of 7.4% in the previous quarter's prices, Diesel discussions in China settled at USD 1110/ton. At the same time, Diesel prices in India witnessed INR 94.24/Litre at the end of quarter III of 2022.
Europe
A fluctuating price trend of Diesel was observed in Europe during Q3 of 2022. At the beginning of the quarter, the prices decreased due to a reduction in upstream crude oil prices. However, in the mid-quarter, the price trend revived, and prices surged sharply on the back of crude oil imports at high prices from the US and a simultaneous depreciation of almost 6% of the Euro against the USD. Towards the end of the quarter, the product prices decreased because of a reduction in offtakes. Due to the rise in inflation, the demand plunged from the consumer end. Subsequently, at the end of Q3, Diesel prices in Germany settled at USD 1.96/L.
For the Quarter Ending June 2022
North America
During the second quarter of 2022, the Diesel prices in the North American region observed a constant gyration in the market trajectory amidst the fluctuating Crude Oil market on a global scale. Since the sanctions imposed on Russia by the U.S. and the E.U., Several nations have decided to restrategize to source Crude Oil from other means. Therefore, several northeast Asia players were observed to lean toward the US WTI crude supplies, and in response, the prices for the WTI have soared to historic highs during the second quarter of 2022. This gyration in the upstream energy cycle has impacted the prices of Diesel in the overall North American region.
Asia Pacific
In the second quarter of 2022, Diesel prices in the Asia Pacific region witnessed a constant fluctuation in the global energy market. The value of the upstream Crude Oil soared amidst the geopolitical tensions among the major economies. The Northeast Asian and pacific players that source hefty volumes of Crude from Russia have restrategized to source from an alternative amidst the sanctions imposed on Russia. Whereas China and India consistently procure their Crude Oil cargoes from Russia after the authorities put a hefty discount on the offers for Russian Ural Crude. Therefore, the overall market dynamics for Diesel showcases different trend on a sub-regional basis.
Europe
During the second quarter of 2022, the Crude Oil market in the European region observed a persistent gyration besides a consistent bullish trend. This market development came after the imposition of retaliatory sanctions on Russia's energy supplies. In June, the E.U decided on a complete embargo on the Russian Ural with some exceptions. The demand remains high, and the discussions for Diesel in the European market soared to the historical high amidst the high inflation in the regional markets. At the same time, the IEA Global Crude Oil market outlook indicated that the demand for Crude would likely surpass the pre-pandemic levels. The absence of a major supplier will probably support the inflation with a possible chance for a recession in the western regions.
