Global shortages of middle distillates such as diesel, gas oil, and heating oil are intensifying rather than easing – making it more likely a relatively severe slowdown in the business cycle will be necessary to rebalance the market: U.S. inventories of distillate fuel oil depleted to 106 million barrels on Oct. 7, the lowest seasonal level since the government began collecting weekly data in 1982. EU distillate inventories were just 360 million barrels at the end of September, the lowest seasonal level since 2004. Singapore’s mid-distillate inventories have fallen to just 8 million barrels, the lowest seasonal level since 2007. The global petroleum and refining system has proved unable to keep up with rapid growth in fuel consumption as a result of the manufacturing and freight-led recovery after the coronavirus pandemic. REFINERY LIMITS The immediate bottleneck is the lack of enough distillation and catalytic […]