Diesel Becomes a Dirty Word for Oil Traders
- Diesel provided a key source of support during crude rally
- Forces that lifted diesel have now abated, market weaker
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The soaring diesel market has taken a turn for the worse. That could be bad news for oil bulls who amassed record bets on a rally in crude.
With demand for the fuel accelerating in September after a hurricane knocked out a swath of U.S. refining and fires eliminated processing in Europe’s hub, diesel was credited with underpinning a rally in crude. Brent jumped above $60 a barrel last month and is still on an upward trajectory. But while those refinery issues are normalizing -- and diesel is weakening -- there’s been little let-up in the rally in crude futures. They reached a more than two-year high of $64.65 a barrel on Nov. 7, and remain close to that.