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    Diesel prices are rising rapidly. Due to the important role of this fuel in the U.S. and global economies, the inflation problem has become even more unpredictable.

    Một trạm bơm xăng tại Mỹ. (Ảnh: Getty Images).

    Diesel prices in the U.S. are soaring. Due to the important role of this type of fuel in the U.S. and global economies, the issue of inflation has become even more complex and unpredictable.

    Tankers, trains and trucks are all diesel-powered. The fuel is also used in a variety of industries, from agriculture and manufacturing to metallurgy and mining, CNBC lists.

    Patrick De Haan, head of oil and gas analysis at the GasBuddy platform, said: “Diesel is the fuel for the economy as a whole. More expensive diesel prices will inevitably cause goods to go up [as higher fuel costs are often pushed to consumers]. Especially at grocery stores, metal shops, wherever you go.”

    In other words, the hot rise in diesel prices will have an impact on the entire economy.

    Diesel prices have risen like a storm.

    According to CNBC, diesel prices began to rise as fuel demand rose as economies around the world rebounded. This has pushed diesel inventories to their lowest level in history.

    Products such as diesel, heating oil and aircraft fuel are called “middle distillation products”, as they are created during the boiling of crude oil into other finished products.

    In the U.S., mid-distillation product inventories are now at a more than decade low. The trend is even more extreme on the East Coast, where stockpiles are at their lowest level since 1996. Diesel and jet fuel in New York are trading above $200 a barrel, according to UBS.

    Europe’s quest to break free from Russia’s energy dependence is also dragging up diesel prices. The general economic bloc now imports about 700,000 barrels of diesel from Russia every day, according to Stephen Brennock at brokerage PVM.

    “The global supply of diesel will become even tighter as the EU proposes to ban russian oil imports,” Brennock said. “If this ban is passed, it will have a big impact on energy markets, especially diesel. “Right now, some people are worried that Europe could run out of diesel.”

    Energy consultancy Rystad echoed that sentiment. Rystad said the loss of Supplies of Refined Russian Products would exacerbate diesel shortages in Europe.

    Refiners, on the other hand, are unable to increase production further. In the U.S., refining capacity has declined in recent years. The largest oil refinery on the East Coast, Philadelphia Energy Solutions, was closed after a fire in June 2019.

    Some refineries are being reconfigured to produce biofuels, but overall capacity is also declining. In addition, a few other factories are also conducting periodic maintenance inspections due to the machinery operating at full capacity for a long time.

    GasBuddy’s Mr De Haan said the East Coast was heavily dependent on the supply of refined products from other regions. Now, Europe is competing for purchases to give up Russian fuel. In short, the diesel market is being tightened very tightly.

    “Absurd price”

    Tom Kloza, head of energy research at OPIS, said that in previous years, a barrel of diesel was often sold for about $10 more than the price of crude oil. Today, that spread has risen to a record of more than $70.

    “The price of díeel oil is becoming unpredictable and there is a bit of a bit of absurdity. These are numbers we’ve never seen before,” Kloza said. Not to mention, the expert said diesel prices across the U.S. are even more volatile.

    Kloza said new York diesel prices are trading at about $5 a gallon, while jet fuel prices , which typically reflect diesel prices, are around $6.72 a gallon. That equates to about $282 per barrel.

    “No book has ever recorded these numbers. They are highly mutant, separated from our world,” Kloza said.

    Retail diesel prices are also rising sharply. On May 6, the U.S. national average for 1 gallon reached a record $5.51, according to AAA. Retail diesel prices also consistently set new highs every day in the previous week.

    High prices help the profit margins of refineries grow positively. In the meantime, consumers should probably expect that commodity prices will continue to rise as a consequence of diesel prices.

    “This will be a double shock to consumers in the next few weeks and months, as the rise in diesel impacts commodity prices. Another part of inflation will hit consumers,” De Haan warned. The expert said that people still do not fully feel the impact of the recent increase.

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