Diesel Prices Soar as Global Product Supplies Dwindle
Energy markets are seeing significant price increases in products derived from petroleum, particularly diesel and gasoline, compared to crude oil. According to a MoneyShow Chart of the Day, while US benchmark oil prices have risen 58% year-to-date (YTD), wholesale gas prices are up 83%, with diesel surging more than twice as much as crude at 121%. The underlying conflict driving these price increases is the ongoing US/Iran War.
The global product supplies are being impacted by damaged refineries in countries like Ukraine, Russia, and Saudi Arabia. This has limited exports of diesel to global markets. Additionally, Iran's attacks on oil tankers through the Strait of Hormuz have further reduced shipments. As a result, consumers and truckers are feeling the pinch.
On the other hand, shares of refiners like Valero Energy Corp.(VLO) and Marathon Petroleum Corp.(MPC) are soaring, up 176% and 134%, respectively, YTD. This highlights that crude oil is not telling the whole story when it comes to energy markets or energy stocks on Wall Street.