For the Quarter Ending December 2024
North America
In Q4 2024, diesel prices in the United States followed a declining trend, primarily due to increased supply and a mild economic slowdown. October saw a slight incline in diesel prices, but by November, prices dropped as refinery operations ramped up following maintenance shutdowns.
The return of refineries to full production levels helped alleviate supply constraints, driving prices lower. Additionally, a warmer-than-expected start to the winter season dampened heating oil demand, contributing to a reduction in prices. By December, the downward trend continued, as inventories grew and demand for diesel softened due to factors like a less severe winter and lower domestic consumption. Although certain regions, like California, saw slight price increases, overall, the national average saw a notable decrease of about 7.0% from the previous year.
The rise in distillate inventories and robust refinery output helped support the market, despite regional variations in demand. In summary, the combination of stronger supply, milder seasonal demand, and increased exports to Europe resulted in a general decline in diesel prices across the U.S. throughout Q4 2024. Specifically in the U.S., the market experienced a 4% decrease from the previous quarter.
APAC
In Q4 2024, the diesel market in China experienced an overall declining price trend, primarily driven by weak domestic demand and reduced industrial activity. October saw an initial upward movement in diesel prices due to a combination of tightening fuel supply and declining refining output. Refiners reduced their runs due to weak refining margins, and China’s refining throughput continued to decrease year-on-year for the sixth consecutive month. This reduction in domestic supply was further compounded by lower crude oil imports, which created some pressure on the market. However, this price increase was somewhat moderated by the weak overall demand stemming from China’s broader economic slowdown and the shift towards new energy vehicles and LNG as alternatives to diesel.
By November, the diesel market started to experience a decline as demand continued to weaken, especially in sectors like agriculture and construction. The seasonal reduction in agricultural activity and outdoor projects, along with a slowdown in industrial operations, dampened consumption. Refineries responded by lowering prices to stimulate sales, and cautious procurement behavior from traders further suppressed price increases.
In December, the declining trend persisted as demand remained subdued, especially in northern China, where colder weather led to a further reduction in diesel consumption. Refineries maintained a steady supply but faced challenges from weak domestic demand, leading to continued price reductions. Diesel exports provided some support, but overall market conditions remained weak, further contributing to the downward price movement for the month. Thus, the quarter concluded with a continued decline in diesel prices across the region. In China, the market saw a 2% decline from the previous quarter.
Europe
In Q4 2024, the European diesel market exhibited a mixed price trend influenced by a range of economic and supply-side factors. Economic headwinds, primarily driven by the ongoing inflationary environment and central bank tightening, dampened demand across Europe. Major economies like Germany and France saw notable declines in diesel consumption, reflecting broader structural challenges and the economic slowdown. Additionally, the transition to electric and hybrid vehicles continued to impact the demand for diesel, as fewer diesel-powered passenger vehicles were registered.
At the same time, diesel refining margins in Europe saw a significant decline, falling to levels considerably lower than in previous years. This downward trend in refining margins was driven by a combination of reduced demand and higher operational costs, particularly in the face of rising energy prices and inflationary pressures.
On the supply side, anticipated refinery closures in the region added uncertainty. While these closures, including major refineries in the UK and Germany, were expected to reduce refining capacity, their immediate impact on the market was tempered by the ability of Europe to absorb external diesel supplies, including from the US Gulf Coast. US diesel exports to Europe were notably higher, helping to stabilize the supply side despite the weakening domestic demand.
The outlook for European diesel prices remains mixed. The closure of refineries and ongoing shifts in global supply chains, including developments in Russia and the Middle East, are likely to have an impact on diesel pricing in the medium term. However, the structural decline in demand for diesel, driven by the energy transition and weaker economic conditions, is expected to keep downward pressure on prices in the near term.
South America
In Q4 2024, diesel prices in Brazil saw a consistent upward trend, driven by a mix of supply challenges, strong demand, and global market fluctuations. October experienced price stability despite volatility in international markets. While global diesel prices, including those in the U.S. Gulf Coast, declined, Brazil’s diesel prices remained steady due to high imports and robust demand, particularly from the agricultural sector during the corn harvest. Diesel imports reached a two-year high, with Russia being the main supplier, though the market saw pressure from a seasonal dip in demand and high inventories at ports.
In November, diesel prices saw a slight increase, reflecting stable supply-demand dynamics and Petrobras’ market interventions. The depreciation of the Brazilian real contributed to rising import costs, though the expansion of domestic refining capacity helped to maintain a balance. By December, diesel prices experienced a more significant rise due to increased costs for imports, fueled by fluctuations in the exchange rate. The price gap between imported and domestic diesel widened, particularly at ports like Santos and Itaqui. Despite higher production levels, Brazil's reliance on imports continued, driving prices up for the quarter. Overall, the market experienced a 1% increase from the previous quarter.
For the Quarter Ending September 2024
North America
During Q3 2024, diesel prices in North America experienced a notable decline, reaching multi-year lows amid broader economic concerns. U.S. diesel prices averaged the lowest level in two years. Contributing factors included a seasonal slowdown in demand, particularly from the transportation and industrial sectors, as economic indicators suggested a potential recession and weaker manufacturing activity. Additionally, the market faced increased domestic diesel production and higher imports, further saturating supply.
Inventory dynamics also played a crucial role; crude oil stockpiles fell by 1.6 million barrels barrels, while distillate inventories saw a modest increase of 100,000 barrels, indicating tighter supply conditions. Meanwhile, U.S. crude oil prices declined, with futures dropping reflecting the impact of reduced demand and economic uncertainties. Although the Organization of the Petroleum Exporting Countries (OPEC+) planned to increase production, challenges such as Libya’s supply disruptions and the anticipated output cuts from Iraq added uncertainty to the market. As schools resumed and the transition to winter fuels approached, expectations of continued downward pressure on diesel prices persisted.
Specifically in the U.S., the market experienced a 4% decrease from the previous quarter, with the quarter-ending price settling at USD 3.56/Gal for Diesel Del-Washington. Overall, the combination of reduced demand and fluctuating inventories characterized the bearish market conditions throughout the quarter.
APAC
During Q3 2024, the APAC region witnessed a decline in diesel prices, driven by several interrelated factors affecting supply and demand dynamics. In China, the diesel market faced significant headwinds, with demand decreasing due to high temperatures, frequent rainfall, and a general summer slowdown in industrial activities. This led to cautious purchasing behavior among traders and end-users, resulting in a buildup of inventories and further downward pressure on prices. Additionally, the country’s transition toward alternative fuels, such as natural gas, and a substantial drop in diesel consumption over 10% year-on-year reflected broader economic challenges, including a property crisis and slowing growth. Refinery output also suffered, with Sinopec reporting a 0.5% decline in domestic refined oil consumption. Despite an increase in crude oil production, overall refined product sales fell, contributing to market weakness. Throughout the region, the volatility of global oil prices remained a concern, exacerbated by geopolitical tensions in the Middle East and economic uncertainties. Consequently, prices continued to decline, indicating a bearish market environment. The combination of weak demand, high inventories, and structural shifts toward cleaner fuels highlighted the challenges facing the APAC diesel market during the quarter. In China, the market saw a 3% decline from the previous quarter, with the quarter-ending price for diesel settling at USD 945 per metric ton in Beijing.
South America
During Q3 2024, diesel prices in South America remained stable, influenced by a combination of steady demand and consistent supply dynamics. In Brazil, the market benefited from a resilient economy, with key sectors such as agriculture, manufacturing, and transportation maintaining robust diesel consumption. Despite rising global crude oil prices, driven by optimistic economic forecasts and geopolitical tensions, the local market exhibited stability as consumption patterns remained predictable. Supply-side factors also contributed, with Petrobras investing heavily in energy infrastructure to enhance diesel production, thereby securing domestic fuel needs. Additionally, balanced import-export activities helped stabilize prices, with Brazil successfully sourcing alternative supplies amidst a decline in Russian diesel shipments. Throughout September, Brazil imported significant volumes of diesel to meet the demands of the upcoming corn harvest, further underpinning market stability. While external market fluctuations and geopolitical events posed challenges, Brazil's strategic position as a key importer and its strong domestic production capabilities ensured that diesel prices remained stable during this quarter, fostering a favorable business environment. In Brazil, the market experienced a 1% increase from the previous quarter, with the quarter-ending price for diesel reaching BRL 5.93 per liter, Min in FD Rio de Janeiro. Overall, the region navigated a balanced market situation, reflecting a sustained equilibrium between supply and demand.
Europe
In Q3 2024, diesel prices in Europe were shaped by a complex interplay of factors, including significant increases in petroleum product exports and high refinery production levels. The rise in exports led to a regional oversupply, which exerted downward pressure on diesel prices. Notably, despite robust exports, many European countries, particularly Germany, experienced a decline in demand, with consumption falling below historical averages. The influx of diesel from global suppliers contributed to substantial increases in fuel inventories, particularly in major ports like Amsterdam-Rotterdam-Antwerp, where stock levels were markedly higher than the previous year. This accumulation of supplies occurred alongside maintenance activities at key refineries, which created localized supply challenges. While Kazakhstan recorded the lowest diesel prices in the region, several Western European countries, including Norway and the UK, saw significantly higher rates. The overall market dynamics were characterized by weak demand in the industrial heartland of Europe, leading to a disconnect between supply and consumption. Additionally, diesel refinery margins weakened considerably, reflecting the challenging market conditions. As traders anticipated potential supply shocks from geopolitical developments, the overall environment for diesel pricing remained volatile, with refinery operators grappling with the impacts of high inventories and fluctuating demand.
For the Quarter Ending June 2024
North America
In Q2 2024, the diesel pricing landscape in North America experienced a pronounced decline, driven by a confluence of supply and demand dynamics. This quarter was marked by a notable dip in diesel prices, reflecting a bearish market sentiment. Key factors influencing this downturn included an increase in domestic diesel production, ample distillate inventories reaching their highest seasonal level in four years, and a general decline in crude oil prices. Additionally, the transition to renewable fuels and a sluggish manufacturing sector further suppressed demand. This overall pricing environment leaned towards a negative outlook, indicating a persistent oversupply and weakened market demand.
Focusing on the USA, which observed the most significant price fluctuations, the trend was overwhelmingly downward. Seasonality played a crucial role, with the mild winter reducing heating oil demand and the slow manufacturing sector curbing industrial diesel needs. The increased availability of renewable fuels further contributed to the reduced demand for traditional diesel. The overall trend for Q2 2024 was a steady decline, with a price drop of 3% as compared to Q1.
This stable production environment, coupled with decreased demand, led to a favorable supply situation that further pressured prices downward. By the end of the quarter, diesel prices in the USA settled at USD 3.72 per gallon, reflecting a significant decline from previous levels. This quarter's pricing environment has been decidedly negative, characterized by oversupply and weakened demand.
APAC
In Q2 2024, the diesel market within the APAC region experienced a notable upward trend in prices, driven by a constellation of significant factors. The quarter was marked by heightened geopolitical tensions, particularly in the Middle East, which disrupted global crude oil supplies and pushed prices upward. The transition to cleaner energy sources, while a long-term goal, has temporarily added pressure on diesel supplies as refineries adapt their operations. Additionally, a surge in industrial and construction activities, post-pandemic economic rebounds, and seasonal agricultural demands further strained the diesel supply chain, exacerbating price hikes.
China, exhibiting the most pronounced price changes, saw a distinct upward trajectory in diesel prices throughout this quarter. Refineries in Shandong faced operational adjustments due to maintenance schedules, resulting in reduced throughput and exacerbation of the supply-demand imbalance. The market dynamics were significantly impacted by a temporary rise in diesel demand, driven by spring agricultural activities and the resumption of outdoor construction projects.
Compared to the previous quarter's -1% change, the current quarter ending price at USD 1010/MT Ex-Beijing underscores a robust and escalating pricing environment. The increasing sentiment throughout Q2 2024 reflects a decidedly positive pricing environment, influenced by a confluence of supply disruptions and heightened demand.
Europe
In Q2 2024, diesel prices in Europe experienced a notable decline due to multiple factors. Economic slowdowns in key regions, including Europe, and a slower-than-expected recovery in China reduced global oil demand. Increased refining capacity from new refineries and expansions led to a diesel surplus, while higher inventory levels were driven by anticipation of lower demand. Government policies, such as temporary tax cuts on diesel, contributed to lower retail prices. Additionally, easing geopolitical tensions and unusually mild weather conditions reduced the demand for heating fuels.
Also, TotalEnergies reported a decrease in second-quarter earnings, primarily due to weakened diesel demand and falling European refining margins. The company attributed this downturn to market normalization following disruptions in Russian supply and slower economic activity. The introduction of new refineries in Africa and the Middle East has heightened competition, further pressing refining margins. CEO Patrick Pouyanne noted that refining margins are stabilizing at lower levels, reflecting ongoing sector challenges.
Thus, the decline in diesel prices during Q2 2024 highlights the intricate dynamics of reduced global demand, increased supply, and evolving market conditions. The combined effects of economic slowdowns, expanded refining capacity, and shifting policies underscore the need for ongoing vigilance in monitoring both regional and global factors impacting diesel prices.
South America
Throughout Q2 2024, the South American region experienced stability in diesel pricing, driven by balanced market fundamentals. In Brazil, diesel prices remained steady due to consistent supply and demand dynamics. Seasonal declines in demand from reduced agricultural activities were offset by sufficient domestic production and imports. Petrobras's pricing policy, influenced by global crude oil prices and geopolitical tensions, contributed to this stability. During the quarter, Brent crude averaged USD 82.25 per barrel, and WTI crude averaged USD 82.69 per barrel. Despite the Brazilian Real depreciating by 6.21% against the USD, this did not significantly disrupt price stability. Additionally, investments in infrastructure, such as Grupo Potencial's biodiesel pipelines, highlighted growing confidence in the evolving energy landscape.
Brazil saw minimal price changes during the quarter, with a recorded 0% change from the previous quarter. Overall trends in Brazil reflected a steady pricing environment, with no significant fluctuations observed. The quarter-ending price for Diesel in Brazil stood at USD 5/MT (BRl/ltr, Min.) FD- Rio de Janeiro, indicating a stable pricing scenario in the region.
For the Quarter Ending March 2024
North America
In the first quarter of 2024, the diesel pricing landscape in North America demonstrated notable fluctuations influenced by several key factors. Geopolitical tensions and the ongoing effects of international supply chain disruptions, including the impact of the Russia-Ukraine conflict, exerted significant upward pressure on crude oil prices, which in turn affected diesel costs across the region. The U.S. and Canada, as major oil producers, experienced somewhat stabilized diesel prices due to their capacity to leverage domestic production against global price increases. Demand for diesel in North America increased as economic activities intensified, particularly in sectors such as transportation, manufacturing, and logistics, which are rebounding strongly post-pandemic. This surge in demand contributed to the upward trend in diesel prices. Moreover, the harsh winter conditions typical of the first quarter further drove demand for heating oil, a byproduct of diesel, compounding the pressure on diesel supplies and pricing.
On the supply side, refinery outputs in North America were periodically hampered by scheduled and unscheduled maintenance activities, which slightly tightened the diesel market. However, strategic petroleum reserves in the U.S. were occasionally tapped to alleviate extreme price spikes, providing temporary relief when market conditions became overly strained.
As the quarter closed, the diesel market in North America was characterized by cautious optimism, with industry analysts closely monitoring the interplay between domestic production capabilities, global crude oil market dynamics, and regional policy developments that could influence diesel pricing as the year progresses. Thus, the end of the quarter Diesel price in the USA stands at USD 4.02/Gal, DEL-Washington.
South America
In Q1 2024, South America's diesel prices were subject to a complex web of influences. Global crude oil price fluctuations, propelled by geopolitical tensions and economic uncertainties, had a direct impact on diesel costs, especially given the region's reliance on imported oil. Exchange rate volatility added another layer of challenge, with currency fluctuations affecting the cost of oil imports and, consequently, diesel prices.
January saw Brazil's entry into OPEC+, stabilizing diesel production but experiencing slowed GDP growth. February witnessed a slight price increase due to heightened road freight movement and supply constraints, while March saw a decline in demand amid seasonal fluctuations and economic slowdowns. Despite challenges, Q1 2024 observed relative stability in South America's diesel prices amidst various internal and external factors, signalling resilience in the market.
Domestic refining capacity played a pivotal role in shaping diesel pricing dynamics. Countries with limited refining capabilities faced higher prices due to the necessity of importing refined diesel, contrasting with those with robust refining infrastructure, which enjoyed greater stability. Government policies, including subsidies and taxes, wielded considerable influence over diesel pricing, with policy adjustments potentially mitigating or exacerbating the impact of rising global prices.
Overall the first quarter of 2024 presented a mixed landscape for diesel prices in South America, marked by a delicate balance of internal and external factors. Hence, the prices of Diesel in South America stands at BRl 5.85/ltr, FD-Rio di Janeiro in the ending of quarter.
APAC
In the first quarter of 2024, China's diesel market exhibited remarkable stability, largely due to strategic policy management and consistent supply chain operations. The Chinese government's use of substantial strategic petroleum reserves played a pivotal role in stabilizing diesel prices. By supplementing the domestic market with these reserves, the potential volatility caused by fluctuating global crude oil prices was effectively mitigated.
Moreover, China's diesel market was insulated from international price shocks by a robust buffer system and a strategic focus on enhancing domestic refining capacities. These measures allowed the country to adjust more gradually to global oil price fluctuations, avoiding abrupt changes in diesel prices.
Towards the quarter's end, diesel prices showed a modest improvement of 3% amid significant global oil market volatility. Geopolitical tensions in the Middle East and anticipated production cuts by oil-producing countries drove oil prices upward. However, hawkish signals from the Federal Reserve and rising US crude inventories exerted downward pressure, contributing to ongoing oil price fluctuations. Despite challenges such as limited domestic refining capacity and scheduled refinery maintenance reducing production, diesel demand surged due to pre-building stockpiles and seasonal fluctuations.
Additionally, the market's stability was underpinned by moderate demand throughout the quarter, which did not spike significantly and therefore did not strain the supply. Hence, the prices of Diesel in China stands at USD 1030/MT, Ex-Beijing.
