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US demand seen dropping 2% in 2023, with West Coast hit harder
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Trucking and container port activity both inch lower in China
Signs of an economic slowdown are flashing in the global diesel market.
In China, the number of trucks running on highways is noticeably down in recent weeks. In Europe, diesel’s premium to crude futures recently plunged to the lowest level in more than a year. In the US, demand is on track to contract 2% in 2023, S&P Global Inc. says. Excluding 2020, when much of the economy briefly came to a standstill, that 2% slump would be the biggest drop in America’s diesel use since 2016.
We are “assuming one of the worst economic climates in recent memory outside of the 2008-2009 financial crisis and the pandemic,” said Debnil Chowdhury, S&P’s head of Americas fuels and refining.
No matter how you crunch it, demand for the heavy-machinery fuel that powers everything from commercial trucking fleets to construction equipment is weakening in many of the world’s largest economies. Viewed as an early signal of weaker industrial activity and reduced consumer spending, the pullback has recession-watchers on high alert.
“Diesel demand can act as a leading indicator for broader growth as an early sign that