On Scarce Diesel & BOJ’s Latest Baby Step

The oil market has proved surprisingly resilient in the face of war-related supply constraints, with workaround solutions mitigating the impacts so far. The world has plenty of oil, so the supply constraints and higher prices won’t be permanent. More problematic, says Toby, is the tight supply emerging downstream in markets for refined products like diesel fuel. Wars have reduced refinery capacity in the Middle East and Russia, and unaffected refineries are operating near capacity limits. That’s not a problem solved overnight. Inventories could stay low and diesel crack spreads and retail prices could stay high even after crude prices normalize. … Also: William explains why investors were underwhelmed by the BOJ’s recent rate hike.