by: Kevin Hughes
(Natural News) A drop within the demand for fuel amid slow economic growth has stoked fears of a recession amongst investors.
The demand for diesel – the fuel of the economic economy – has dropped abruptly as freight markets quiet down. Fuels for vehicles have also seen a drop in demand as motorists are tightening their belts and cutting on spending. In response to analysts, these signs indicate a slowdown on the planet’s leading economy that would soon go right down to recession.
The demand for distillates including diesel, which is used to power the trucks and trains that deliver goods across the country, was about six percent lower in the primary three months of 2023 in comparison with the identical period last yr as shown by government data gathered by S&P Global Commodity Insights.
The benchmark diesel futures for fuel brought into Recent York Harbor recently plunged to a 15-month low as fears of a diesel shortage from last autumn have changed into fears of weak diesel demand. (Related: America is running out of gas: Surging demand leaves U.S. with LESS THAN A MONTH’s supply of diesel.)
Retail diesel prices have also been trending down for many of this yr. The national average price of diesel has dropped by 5.3 cents and stands at $4.07 per gallon, $1.18 lower in comparison with the identical period last yr.
Petrol demand, which is more closely connected to consumer travel, has been delayed thus far, with consumption in the primary quarter off by two percent in comparison with last yr. Nevertheless, there are hints that it’s beginning to slide.
Pump sales also on a downhill slide
The Dow Jones’ Oil Price Information Service (OPIS), which tracks activity across 40,000 stations nationwide, also observed a decline in pump sales. Gasoline volumes sold within the week to April 22 were down about three percent against the identical week last yr; six percent against the identical week two years ago; and 20 percent against same week in 2019 – before the Wuhan coronavirus (COVID-19) pandemic struck.
Meanwhile, the American Automobile Association also noted the lower pump sales despite gasoline’s low average price of $3.62 a gallon. This was way lower than the $4.16 a gallon last yr. The Russia-Ukraine war sent pump prices soaring to record levels of greater than $5 last summer.
“In the event you were it within the closet, and never knowing what the broader economy was doing, you’ll say we’re seeing some form of an industrial recession,” stated Tom Kloza, OPIS global head of energy evaluation.
“We’re just not seeing the buyer really driving. I feel the buyer isn’t necessarily motivated to drive more simply because prices are cheaper than they were last yr.”
Rory Johnston, who heads market research service Commodity Context, commented on the event. “What we’re seeing is that this ongoing narrative of persistently resilient consumers, and this flagging industrial and business investment sector – which is where you see diesel demand falling off, you see gasoline demand remaining firm. [But] if the business sector continues to retrench, that can, inevitably, eventually feed into the buyer side,” he said.
Follow FuelSupply.news for more news about America’s oil supply.
Watch this Fox Business interview that discusses why America is getting ready to an oil crisis.
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