$7 Diesel Likely: Global Tensions, Winter Months Make Energy Risks More Widespread

• Gasoline prices have slightly declined due to state tax suspensions, but diesel prices remain elevated and are expected to rise further.
• Geopolitical tensions (US/Iran, Houthi attacks, Ukraine/Russia) are major factors contributing to energy market instability and potential supply disruptions.
• Diesel storage levels are threatening multi-decade lows, with predictions of $7/gallon diesel and $8/gallon heating oil possible this winter.
• The 'heating oil crack' (refinery margin for diesel) is over $100, an unprecedented level, indicating severe supply tightness.

The discussion highlights persistent elevated energy prices, particularly for diesel and heating oil, driven by global geopolitical tensions and critically low inventories. While gasoline prices have seen minor relief from state tax suspensions, the outlook for diesel and heating oil is grim, with potential for significant price increases and multi-decade low storage levels as winter approaches.