Diesel fuel inventories in northwest Europe will drop to the lowest in nearly 12 years as early as March, Bloomberg reported on Wednesday, citing the latest outlook from Wood Mackenzie.
Analysts at the UK-based consultancy expect the stocks to be filled in December and January, before a sharp drop-off, and then hit the lowest on record for any month in data going back to 2011.
Starting early February, EU’s latest sanctions against Russia will prohibit imports of nearly all seaborne refined petroleum products, including diesel-type fuel, from the bloc’s single biggest cross-border supplier. The inventories are a vital cushion against disruptions, and when they run low, they leave the fuel market open for increased volatility.
Lower inventories have contributed to stronger margins for oil refineries, incentivizing European operators to run hard, according to James Burleigh, a principal analyst at Wood Mackenzie.
“We expect the higher production to continue to be supported by the…
