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German Diesel Demand Met Despite Supply Squeeze

OIL PRODUCTS

Germany’s diesel demand is being met despite supply squeezes, although Russia’s export ban could indirectly add further pressure in the coming weeks, according to Argus.

  • German diesel demand has risen largely from increasing consumption within the agricultural sector, according to Argus.
  • The volume of diesel trades submitted to Argus rose by 21% on the week, although product availability remains strong, suggesting that despite ongoing maintenance at German refineries, supply is meeting demand.
  • Traders told Argus that they expect distillate demand to increase further in October, when companies begin restocking ahead of a switch to winter specifications and a steep rise in the CO2 tax from Jan. 2024.
  • Diesel exports from the US to Europe S are expected to rise in October, amid an open arbitrage window, while imports into Germany may be hampered by low Rhine water levels.
  • Russia’s temporary diesel ban, although expected to only last a few weeks, could also tighten global diesel markets, and put pressure on European supply.

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