- Saudi Arabia’s energy minister attributed the lack of global refining capacity to the surge in the gap between the price of crude oil and fuels that could discourage investors, Bloomberg reports.
- Crude prices reached $110 a barrel in 2021, on pandemic recovery followed by the Ukraine crisis.
- Refined products surged significantly more than crude since the crisis, with diesel trading at record highs in the U.S.
- Crude and refined-fuel markets are firmly in backwardation, marked by near-term futures commanding a premium to those further out.
- The downward-sloping curve means the long-term price assumptions companies use are much lower than current levels, discouraging investment in production and refining.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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