Column: Manufacturing and freight drive diesel-led oil recovery

LONDON (Reuters) – U.S. consumption of distillate fuel oil used as diesel and heating oil has recovered close to its pre-epidemic level, boosted by a rebound in manufacturing output and freight movements since the first wave of coronavirus. The strong recovery in diesel stands in contrast to a weaker upturn in gasoline and especially jet fuel, which remain hampered by the persistence of remote working as well as restrictions on leisure services and passenger aviation. Similar distillate-led recoveries are also underway across the major economies of Europe and Asia, driven by the global resurgence in industrial production, raw materials, and merchandise movements. In November, U.S. distillate consumption was down by less than 3% compared with the prior five-year average, in contrast to a deficit in gasoline of 13% and jet fuel of 30%, according to statistics from the U.S. Energy Information Administration (“Petroleum supply monthly”, EIA, Jan. 29). Distillate is mostly used in manufacturing, mining, oil and gas production, farming, and freight transportation, in contrast to gasoline and jet fuel, which are mostly used for personal mobility. Distillate was therefore less impacted by the business shutdowns and stay-at-home orders during the first wave, and has recovered faster, in line with… continue reading

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