"In the US, retail diesel prices have risen consistently since late July, so much so that it contributed more to inflation than gasoline in August. American refiners haven’t been able to build up inventories this summer, the typical period for supply growth in between crop seasons and ahead of winter heating. That’s because market conditions have made stockpiling a losing venture, similar to last year.
New England’s main supplier, East Canada’s Irving refinery, will undergo major maintenance work lasting seven weeks starting September. This leaves the region out of reach for pipelines, at the mercy of seaborne shipments from further afield.
Bullish Bets
The diesel market’s performance is important beyond the universe of a few specialist traders.
In its broadest definition, this type of fuel — which has varying specifications and is used in everything from cars and ships to heating and heavy machinery — is the single biggest chunk of petroleum product demand.
Hedge funds are lifting their bullish bets, with net-long positions on Nymex diesel jumping to an 18-month high in August.
Beyond that, it’s a vital fuel for the world’s supply chains, and major shortages and price shocks can have implications for governments and industries.
Last year, high diesel prices spurred trucker strikes across Asia, pressuring governments trying to stave off inflation from rising energy costs. In the US, farmers and trucking companies that purchase in bulk stand to hurt even more from the rising costs.
The current crunch highlights a dilemma that nations have in phasing out oil refineries as they try to transition away from fossil fuels.
Recent heatwaves have capped refinery output and impacted a global system that’s still coping with the halting of several plants in recent years, said FGE’s Lindell.
https://finance.yahoo.com/news/diesel-pricing-scarcity-winter-market-010000378.html