Europe is heading towards a shortage of diesel and heating oil

It is an extra layer added to the mille-feuille of the great energy crisis that Europe and beyond that the world at large is going through. According to Bloomberg, despite a significant drop in oil prices in recent days, our continent is headed straight for a shortage of diesel and its derivatives, particularly heating oil, while winter already signals the end of its cold threats. in thought.

Diesel is essential for the functioning of the economies in North West Europe. Of course for part of the fleet, but also for heating (fuel oil) or to supply energy to a number of industries and factories.

However, the reserves the continent sits on are dangerously low, even if supplies of electricity, gas, coal and oil are not guaranteed in the context of international tensions over energy, technical difficulties in the nuclear field, particularly in France, Russia’s war in Ukraine and the resulting sanctions and embargoes.

Such is Europe’s energy stress that London is beginning to brace itself for blackouts and dead of winter blackouts, and – a curious example among other more classic fears – that German crematoria are concerned.

Balance your offset

For diesel in particular, data from Wood Mackenzie shows that European reserves are at their lowest since 2011 – and even since 2008 for the key Amsterdam-Rotterdam-Antwerp hub, according to Insights Global.

These supplies therefore represent a meager safety net while the continent prepares for the worst and numerous other shortages. “We are seeing similar demand as usual, but we are starting lower”notes analyst James Burleigh.

Bloomberg notes that supply is tight despite an increase in global refining capacity. In particular, one of the problems facing Europe is the dangerously low level of the Rhine, which carries fuel to some of the continental hubs.

Another problem: Tendencies are urging shopkeepers not to stock because of a phenomenon called “backwardation” or “reverse,” where the price of a futures contract is lower than the spot price.

In short, traders have no interest in building stocks as the traded commodity will decline in value over the coming months. Winter is approaching and is therefore likely to be particularly harsh for Europe.

Kaddouri Ismail

I am Ismail from Morocco, I work as a blogger and online marketer. I am also the founder of the “Mofid” site, in which I constantly publish many important articles in the field of technology, taking advantage of more than 5 years of experience working in the field. I focus on publishing in a group of areas, the most important of which are programming, e-marketing, digital currencies and freelance work.

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