Column: Depleted US Distillate Stocks Show Supply Chain Pressure

Distillate shortfalls will continue to exert upward pressure on oil prices until Saudi Arabia and U.S. shale producers raise their output faster, or more likely until the economy enters a slowdown, writes Senior Market Analyst John Kemp.

John Kemp, Reuters

U.S. distillate fuel oil inventories have fallen to the lowest seasonal level for eight years, a sign of booming manufacturing and freight transportation demand.

Distillate shortages are another manifestation of the supply chain bottlenecks that are fueling inflation around the world as the economy expands rapidly after the coronavirus recession.

Low distillate inventories will boost demand for crude oil and are likely to put upward pressure on prices over the next few months as refiners and distributors try to rebuild them to a more comfortable level.

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