Commodities
US Diesel Export Ban Talk Widens Crude Discount to Global Benchmark
The US crude futures discount to global benchmark Brent has widened due to talk of a possible diesel export ban. Washington's discussion on limiting exports has dimmed demand for American oil, leading to lower prices.
Rising freight rates and tight vessel availability have also reduced the attractiveness of US crude oil. The WTI-Brent spread has traded exclusively at a $4 discount or wider since July 7, with US crude exports remaining relatively flat month on month.
A diesel export ban could lead to higher petrol prices in the long term and potentially rising diesel prices again. Analysts estimate that US refiners might cut their crude runs by as much as 12% if diesel exports are banned.