As the US economy crashes, its diesel market is weakening. As residents ordered by governments to shelter in homes to curb the spread of coronavirus, US diesel demand had held up relatively well. Across the country, diesel fuels farming equipment and trucks that haul goods.
As processing margins remained higher, trucking and farming demand responded by refiners by increasing their slate of diesel. Consumption of diesel, however, is falling now as well. Energy Information Administration data showed the four-week average of diesel product supplied fell to just under 3.9 million barrels per day last week, the lowest for the start of April since 2016.
From the year-ago period, that represents an 8 percent decline. By contrast, gasoline demand is off by 32 percent in that same time period. Last week’s figures showed diesel demand plunged by 28 percent. If this persists, it shows that deliveries may be starting to decline as the economic pain deepens. Storage in the Midwest has started to become an issue, traders said.
