US Diesel Demand Hits 26-Year Seasonal Low in March
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U.S. diesel demand plummeted to its lowest seasonal level in 26 years in March, driven by slowing economic growth.
Product supplied of distillate — the fuel that powers trucking, heating and heavy industry — plunged to 3.67 million barrels a day, according to monthly data from the U.S. Energy Information Administration. That figure marks a downward revision from the agency’s previous estimates.
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The deteriorating diesel market is a warning signal that broader oil demand growth could be at risk, according to Dennis Kissler, senior vice president for trading at BOK Financial Securities. Consumption of the fuel tends to fall as the economy slows, and a slowing economy presages waning demand for other fuels. Refining margins are already showing weakness in Asia while, in the U.S., they’ve come off their earlier highs.
“It’s a function of the slowing of the economies in Asia and the U.S. and how inflation is tightening consumer spending habits,” Kissler said. “They’re not going out and spending money like they were a year ago.”
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