Decrease in global oil inventories pushes prices higher

After a slight decline, oil prices in many countries are headed up again. The global distillate inventories are now much lower than usual for this time of the year.

Distillates, such as diesel and heating oil, are the main fuels used in the industrial economy.

The inventories in all major energy-consuming regions were significantly depleted in August, despite a prolonged slowdown in production activity and freight shipments over the previous year. The distillate inventories in Europe were 35 million barrels lower than the ten-year seasonal average, i.e. a drop of 8%. The US inventories in August were 23 million barrels lower (drop of 16%).

Further growth in fuel prices will be driven by a shortage of oil supply at a significantly increased price of oil. The International Energy Agency expects the oil supply deficit to amount to an average of 1.24 million barrels per day in the second half of the year. The OPEC believes that the global oil deficit will reach 3 million barrels per day in the fourth quarter.


In Russia, amid the sharp rise in wholesale prices for petrol and diesel fuel, the authorities have introduced a temporary ban on their export to stabilize prices in the domestic market. Experts have expressed the opinion that the ban on the export of petrol and diesel fuel from Russia may additionally stimulate an increase in the global prices.

The Russian export volume of diesel is substantial. International agencies estimate that Russia's export of diesel is approximately 900 thousand barrels per day, and that of petrol is 60–100 thousand barrels per day.