Diesel Profit Margins Soar to 30-Year Seasonal High as Supply Worries Grip the US

Diesel is fetching the highest premium to crude oil for this time of year in data going back more than 30 years.

The diesel crack spread, which represents the profit generated by turning a barrel of crude into diesel, approached $70 a barrel on Monday for the first time since June to stand at the highest for this time of year in records going back to 1986. The so-called crack spread was below $20 a barrel the same time last year. Demand is set to grow this winter with the US northeast likely burning more diesel for heating amid soaring natural gas prices. 

The strength reflects growing concerns over the security of the nation’s fuel supply heading into peak demand season with national inventories at their lowest level since 2000 for this time of year. US fuelmakers haven’t been able to build up domestic stockpiles with Russian import bans reshuffling global trade patterns.

In New York Harbor, diesel tanks have seasonally never been emptier. Supplies could shrink further in the coming months as Gulf Coast refiners shut units for maintenance.