China’s Diesel Stockpiling Boosting Prices, Journal Says

The worldwide spike in diesel prices is being driven in part by China’s stockpiling of the fuel in advance of this summer Olympics, which it is hosting, and the United States is exporting more diesel to the world market, the Wall Street Journal reported Monday.

China is stockpiling in advance of the games, which start in August, and also will need more diesel and distillates to help rebuild after last week’s big earthquake in its Sichuan province, the paper reported.

The country is stockpiling the fuel in part in case it needs to rely on backup generators if its power grid falters this summer, the Journal said.

Worldwide prices are also being boosted by low supplies in Europe, and U.S.-produced diesel is in high demand globally, the paper said.

South America is also relying on more U.S. heating oil this summer, which is winter in the southern hemisphere, the paper reported. Heating oil and diesel are both distillate fuels.

Heating oil futures, a proxy for diesel prices, reached a record $3.7028 a gallon Friday on the New York Mercantile Exchange, the Journal reported.