NEW YORK / RankWire.AI / – On Wednesday, diesel markets stayed under pressure as declining inventories and refinery disruptions pushed fuel supplies tighter across both the United States and Europe. U.S. ultra-low sulfur diesel futures jumped 7.4% on Monday to reach $4.19 a gallon, marking the strongest daily gain since July 13, with prices trading near $4.28 early Wednesday. Meanwhile, European diesel refining margins also stayed elevated after nearly a 10% increase at the start of the week.
Official weekly data revealed a significant drop in U.S. distillate stocks, with the U.S. Energy Information Administration reporting 107.2 million barrels for the week ending July 31, a decrease of 3.5 million barrels from the previous week. Inventories were 5.1% below the same period last year and 16.1% below the comparable period in 2024. This category, which includes diesel and heating oil, serves as a key indicator of domestic middle-distillate supply availability in the fuel market.
Despite a slight easing from last week, retail diesel prices remained high, with the U.S. national average at $5.257 a gallon on August 10, down from $5.348 the previous week, yet still well above the $4.578 recorded on July 6. European markets faced similar supply pressures, with the low-sulfur gasoil premium over crude reaching a record $74.66 a barrel on July 30, illustrating the sharp rise in diesel’s value compared to crude oil.
Global product flows tighten amid refinery outages
Refinery outages have curtailed the supply of diesel and other fuels for international trade, with an attack damaging a refinery in Russia’s Tatarstan region and contributing to lower Russian processing activity. Since July 27, Saudi Arabia’s Jazan refinery has remained offline following an earlier attack, removing additional refined-product capacity from the market. In June, global refinery runs were already below last year’s levels as lower processing activity impacted several key fuel-producing regions.
Restrictions on exports have also contributed to limited supply. Russia extended curbs on gasoline and diesel exports through January 31, 2027, while vessel traffic through the Strait of Hormuz, a major petroleum trade route, has decreased. Additionally, China has supplied fewer refined products as domestic refinery activity weakened. The European Central Bank noted diesel pump prices near €1.98 per litre during the third week of July, with refining margins playing a larger role in retail costs.
Despite high refinery throughput, US stocks remain depleted
Although U.S. refiners processed record amounts of crude during the first seven months of 2026—reaching the highest level for that period since 2019—distillate inventories have not rebounded to typical seasonal levels. At the start of August, stocks were at their lowest for this time of year in about thirty years, a situation compounded by ongoing refinery disruptions and reduced international product flows. Despite robust refinery utilization, diesel stocks continue to stay unusually low.
On the price front, oil markets also moved upward on Wednesday, with Brent crude approaching $89.81 a barrel and West Texas Intermediate near $84.08. Diesel has faced added pressure because supplies of finished fuel remain constrained in several major markets, affecting sectors like trucking, agriculture, construction, and manufacturing. The combination of low U.S. inventories, high European refining margins, refinery outages, and export restrictions has maintained tight conditions in diesel markets across both regions, with buyers competing for limited refined supplies.