$100 Diesel Cracks Signal a Much Tighter Oil Market Than Brent Suggests
The oil market has remained complacent for months amid the worst disruption in global supply, with crude oil futures rarely topping $100 per barrel over the six months in which tanker traffic at the Strait of Hormuz is a trickle compared to pre-war levels. While market participants have been putting
Source: OilPrice.com
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DW NOTE
Diesel crack spreads hit $100 — the margin refiners earn turning crude into distillate — while Brent sits twenty-two percent below its yearly high. That divergence means refineries are pricing in tightness the crude market hasn't yet absorbed. When product cracks double the crude price move, either diesel demand is spiking or refining capacity is scarce. With the Strait closed 174 days and global supply down 4.3 mb/d, it's both.