Oil and diesel prices during the pandemic

Members of OPEC+, a group made up of allied countries organization of petroleum exporting countries (OPEC), agreed to oil production cuts until the end of July. However, given the moment of crisis, the diesel market may be sending threatening signals oil prices and the economy in general, which are not being noticed.

This is because, while the measures taken may reduce the supply in the global oil market and raise prices, they have almost no effect on refinery margins when selling diesel, one of the derived products most important oil products.

At the beginning of the pandemic, diesel was one of the few positive impacts on the oil market. The truck segment, for example, was running at full speed to stock up. Now, the production margins of the fuel in the U.S., in turn, are close to the 10-year low. Valley remember that in the USA, the period of consumption is seasonally weak and the supply of reached the lowest weekly level in about 20 years in the last week. The data are from the Energy Information Administration.

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