Breaking News
Investing Pro 0
Cyber Monday Extended SALE: Up to 60% OFF InvestingPro+ CLAIM OFFER

U.S., European thirst for fuel sends physical oil prices soaring

Commodities May 30, 2022 12:05AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Gas prices over the $6.00 mark are advertised at a 76 Station in Santa Monica, California, U.S., May 26, 2022. REUTERS/Lucy Nicholson/File Photo
 
LCO
-0.31%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
CL
-0.03%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Noah Browning and Alex Lawler

LONDON (Reuters) - Sky-high refining margins for diesel and gasoline in Europe and the United States, driven by a cutoff in Russian supply, has sent prices for some types of physical crude oil to all-time records according to traders.

The dearth of fuel in the major consuming countries just as the summer driving season in the United States kicks off has lifted asking prices near and above historic peaks for lighter and medium oil types from West Africa to the North Sea.

The sharp rises underscore a tight market and the difficulty of bringing down transport fuel costs, which have thrust inflation toward 40-year highs and triggered recession fears in the United States and some parts of Europe.

Offers for medium sweet Forcados Blend and Escravos crude from Nigeria have approached an $8 premium compared to dated Brent, traders said, their highest ever according to Refinitiv Eikon data.

The grades are easily refined into middle distillates like diesel. Qua Iboe, another type of Nigerian oil that is suitable for refining into gasoline, was on offer for an unprecedented dated Brent plus $6.

"Nigerian crude is being supported by gasoline and distillate shortages in general in Europe and the United States," a West African crude trader said.

Gasoline refining margins, also known as cracks, in Northwest Europe hit a new peak last week at just above $40 a barrel last week before edging down about $10 - still near highs last seen in 2015, with stocks there plunging a quarter or 250,000 tonnes on the week.

In the North Sea, Oseberg and Ekofisk differentials are at all-time highs, traders said, partly due to reduced loadings around maintenance in the latter.

Seaborne non-Russian barrels, including from Norway, imported into the Polish Baltic Sea port of Gdansk, have been on the rise as refineries in eastern Europe and Germany look for alternatives to Russian oil.

In the United States, gasoline-friendly light sweet U.S. West Texas Intermediate (WTI) crude rose to its highest since March earlier this month.

Average diesel prices in the U.S. hovered around a record of $5.58 this month, up three quarters from last year, as the retail cost gallon of gasoline topped $4.37 - also a record.

"Gasoline and distillate (margins) are already coming off several dollars," one European refining source said. "So as soon as cracks have some correction, differentials should come off."

U.S., European thirst for fuel sends physical oil prices soaring
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email