Europe is reeling from a diesel supply crunch, and now another squeeze is looming on the horizon, as jet fuel supply tightens ahead of the final quarter of the year.
Per Energy Aspects, the shortfall in jet fuel supply for Europe next quarter could reach 510,000 barrels daily, Reuters reported today, adding that the consultancy sees a jet fuel surplus of 18,000 barrels daily in the United States and a larger 419,000-bpd surplus in the Asia-Pacific.
The tighter supply situation in jet fuel comes as European stocks of the commodity dwindle to the lowest since 2019, Reuters also reported. Jet fuel inventories at the Amsterdam-Rotterdam-Antwerp hub fell to 454,000 tons in the week to September 10, their lowest in seven years. Meanwhile, South Korea has emerged as the largest jet fuel supplier to Europe, with imports running at a daily rate of 129,000 barrels daily.
European fuel prices are soaring to record levels, with gasoline and diesel earlier this month reaching new all-time highs across the European Union. This is bound to push already high eurozone inflation even higher, after energy inflation alone hit 14.3% in August, Euronews reported this Saturday.
The trends reflect most of Europe’s overwhelming dependence on energy imports, with the latest blow coming from Saudi Arabia, which canceled crude oil cargoes that were scheduled for delivery to European refiners in October. The kingdom was forced to do this after the latest barrage of Houthi attacks on energy infrastructure.
According to Euronews, gasoline prices in the European Union have added some 29% since the start of the year while diesel fuel prices have swelled by 40%. ECB officials expect diesel margins to peak next month, citing peak gasoline margins in August. However, Goldman Sachs recently said that refiners’ ramp-up of diesel fuel production is resulting in less gasoline production, which could lead to a squeeze in that fuel later on.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com
- Strait of Hormuz Shipping Traffic Falls Further as Saudi Oil Flows Rise
- Oil Prices Head for Weekly Loss as Saudi Export Fears Ease
- Germany Weighs Market Incentives to Boost Record Low Gas Storage Level
