#oil
Oil and China are about to trigger a new wave of price hikes for diesel and gasoline.
The price of Brent crude, the benchmark in Europe, has risen 11% in the past month and 32% in the past three months. Fuel prices, by contrast, seem to have stabilized with the help of government subsidies (paid for with our taxes or public debt) and greater stability in wholesale markets.
This tense calm at gas stations, however, could end very soon. The oil crisis is lasting much longer than expected, and major fuel producers such as China are beginning to have trouble meeting domestic demand. The result could be a new wave of price hikes in wholesale diesel and gasoline markets, which could feed through to retail prices sooner rather than later.
Brent is up 12% since the end of September, while diesel and gasoline futures are down 0.9% and 1.3%, respectively. However, this apparent disconnect may not last much longer. On the one hand, China, whose fuel exports have kept international prices in check, needs to rebuild reserves that have fallen to their lowest levels since 2022. Meanwhile, US refineries will have to undergo the maintenance shutdowns they have been postponing for months.
The only country that can prevent this situation from unfolding is Russia, which, to the market’s surprise, has gone several days without Ukrainian drone attacks on its refineries and could increase diesel production as it repairs these large refining facilities.
#ChinaEconomy
$HUMA
$HYPE
$MSFTB
Oil and China are about to trigger a new wave of price hikes for diesel and gasoline.
The price of Brent crude, the benchmark in Europe, has risen 11% in the past month and 32% in the past three months. Fuel prices, by contrast, seem to have stabilized with the help of government subsidies (paid for with our taxes or public debt) and greater stability in wholesale markets.
This tense calm at gas stations, however, could end very soon. The oil crisis is lasting much longer than expected, and major fuel producers such as China are beginning to have trouble meeting domestic demand. The result could be a new wave of price hikes in wholesale diesel and gasoline markets, which could feed through to retail prices sooner rather than later.
Brent is up 12% since the end of September, while diesel and gasoline futures are down 0.9% and 1.3%, respectively. However, this apparent disconnect may not last much longer. On the one hand, China, whose fuel exports have kept international prices in check, needs to rebuild reserves that have fallen to their lowest levels since 2022. Meanwhile, US refineries will have to undergo the maintenance shutdowns they have been postponing for months.
The only country that can prevent this situation from unfolding is Russia, which, to the market’s surprise, has gone several days without Ukrainian drone attacks on its refineries and could increase diesel production as it repairs these large refining facilities.
#ChinaEconomy
$HUMA
$HYPE
$MSFTB
