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Traders warn of looming global diesel shortage

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Traders warn of looming global diesel shortage

World markets face a squeeze on diesel, the world’s high buying and selling teams have warned, with Europe most susceptible to a “systemic” scarcity that might result in gasoline rationing.

The heads of three of the most important commodity merchants — Vitol, Gunvor and Trafigura — estimated as a lot as 3mn barrels of oil and its merchandise a day may very well be misplaced from Russia because of sanctions, following the nation’s invasion of Ukraine. The company leaders had been talking on the FT Commodities World Summit in Lausanne, Switzerland on Tuesday.

“The factor that everyone’s involved about will probably be diesel provides. Europe imports about half of its diesel from Russia and about half of its diesel from the Center East,” mentioned Russell Hardy, chief of Switzerland-based oil dealer Vitol. “That systemic shortfall of diesel is there.”

These Russian imports account for roughly 15 per cent of Europe’s diesel consumption, whereas crude oil together with provides from Russia can be processed by refineries on the continent.

Hardy mentioned the shift to extra diesel consumption over petrol in Europe had helped to create shortages of the gasoline. He added that refineries might enhance their diesel output in response to increased costs on the expense of different oil-derived merchandise to shore up provide, however acknowledged that rationing was a chance.

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Torbjorn Tornqvist, co-founder and chair of Geneva-headquartered Gunvor Group, added: “Diesel isn’t just a European downside; it is a world downside. It truly is.”

Amrita Sen, chief oil analyst at Power Elements, mentioned that “diesel is by far the worst affected” of the oil merchandise as a result of Europe imports near 1mn barrels a day of Russian diesel and the world entered the battle with close to report low shares of oil.

In a press release, French oil main TotalEnergies mentioned that until it acquired directions on the contrary from European governments it will terminate its Russian diesel buy contracts “as quickly as doable and by the tip of 2022 on the newest.” 

“TotalEnergies will import petroleum merchandise from different continents, notably its share of gasoil produced by the Satorp refinery in Saudi Arabia,” the corporate mentioned.

In the meantime, Jeremy Weir, chief govt of Singapore-based Trafigura, mentioned that 2-2.5mn barrels of Russian oil manufacturing would go lacking from the worldwide market, break up between crude and refined merchandise. “The diesel market is extraordinarily tight. It’s going to get tighter,” he mentioned.

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Tornqvist additionally mentioned European gasoline markets had been now not functioning correctly as merchants confronted big calls for from banks for money to cowl hedging positions.

“I believe it’s damaged. It truly is,” he mentioned. “I by no means thought that any person might say ‘ah, gasoline has fallen under 100 per megawatt hours [and that] is absolutely low-cost’.”

Final week, Europe’s largest power merchants known as on governments and central banks to supply emergency liquidity help to maintain gasoline and energy markets functioning as sharp worth strikes triggered by the Ukraine disaster have strained dealings in commodities.

Gasoline futures linked to TTF, Europe’s wholesale gasoline worth, have whipsawed from about €80 a megawatt hour forward of Russia’s invasion of Ukraine to greater than €300 earlier this month, earlier than sliding under €100 once more this week. Two years in the past, European gasoline costs had been under €20 a megawatt hour.

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Commodity merchants face hovering margin necessities — the share of a safety’s worth that banks demand merchants maintain in money. Hardy mentioned participation within the spot marketplace for gasoline had dwindled as a result of the price of buying and selling had risen so excessive. 

To maneuver a cargo equal to 1 megawatt hour of liquefied pure gasoline priced at €97, merchants should present €80 in money, straining their capital necessities, Hardy mentioned. 

Tornqvist mentioned European utilities would wrestle to fill gasoline storage for subsequent winter given the “paralysed” state of the spot marketplace for gasoline, until policymakers stepped in to supply ensures to guard consumers in opposition to worth swings.

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Gaza ceasefire announced after 15 months of war

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Gaza ceasefire announced after 15 months of war

Israel and Hamas have agreed a ceasefire to halt the 15-month war in Gaza and free the remaining hostages, mediators said, raising hopes of an end to a devastating conflict that has shaken the Middle East and the world beyond.

But, despite celebrations erupting across the region, the office of Israel’s Prime Minister Benjamin Netanyahu warned that some details still had to be finalised as of Wednesday night.

The multiphase agreement, due to take effect on Sunday, a day before Donald Trump returns to office as US president, was announced by Qatari Prime Minister Sheikh Mohammed bin Abdulrahman bin al-Thani. However, he noted that the parties still had to give final approval.

The agreement offers hope of a halt — and potentially an end — to a brutal war that has become the deadliest chapter in the decades-long history of the Israeli-Palestinian conflict, leaving Gaza in ruins, consuming Israeli society, and pushing the Middle East to the brink of a full-blown war.

The fighting was triggered by Hamas’s brutal October 7, 2023 attack on Israel, during which fighters from the Palestinian militant group killed 1,200 people, and took 250 hostage, in the deadliest day for Jews since the Holocaust.

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Israel responded with a ferocious offensive in Gaza that has killed more than 46,000 people and fuelled a humanitarian catastrophe in the enclave.

Previous attempts to broker a deal to end the conflict and secure the release of the 98 mainly Israeli hostages still in Gaza — not all of whom are alive — had repeatedly foundered when Israel and Hamas refused to make the necessary concessions.

Supporters of Israeli hostages kidnapped during the October 7 2023 attack by Hamas © Ronen Zvulun/Reuters

But the re-election of Trump — who threatened that there would be “all hell to pay” if the hostages were not released before his inauguration — injected renewed momentum into the long-stalled talks.

Trump was among the first leaders to hail the deal on Wednesday, writing on his Truth Social platform ahead of the formal announcement: “WE HAVE A DEAL FOR THE HOSTAGES IN THE MIDDLE EAST. THEY WILL BE RELEASED SHORTLY.”

He added his national security team would “continue to work closely with Israel and our Allies to make sure Gaza NEVER again becomes a terrorist safe haven”.

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In comments of his own hailing the deal, US President Joe Biden described the Doha-based talks as “one of the toughest negotiations I have ever experienced”.

He added that the agreement would “halt the fighting in Gaza, surge much needed-humanitarian assistance to Palestinian civilians, and reunite the hostages with their families after more than 15 months in captivity”.

But Netanyahu’s office said shortly after Trump’s announcement that there were “still several sections left open in the proposal and we hope that the details will be finalised tonight”.

A person close to the talks said a deal had been done after the Qatari prime minister had met Hamas and Israeli negotiators separately in a final push for an agreement.

But the person added that, while Hamas had agreed to the deal, conceding on one of its final demands, Israel had since “raised a new outstanding issue”. They said: “Mediators are working to resolve it.”

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An Israeli official said that the final details which Netanyahu’s office said still needed to be finalised related to the identity of those Palestinian prisoners set to be released in exchange for hostages.

Israel’s government is due to vote on the deal, which is based on a three-phase proposal first outlined by Biden last year. Far-right ministers, including national security minister Itamar Ben-Gvir, have expressed opposition, but are not expected to be able to block the deal.

The first phase will involve a 42-day truce, during which 33 Israeli hostages — including children, all female prisoners, the sick and elderly — will be freed in exchange for Palestinian prisoners held in Israeli jails and a dramatic increase in humanitarian aid deliveries into Gaza.

The two parties would begin negotiating the second phase no later than day 16 of the truce. During this period the remaining hostages, including male soldiers, are meant to be released in exchange for more Palestinian prisoners.

If fully implemented, the second phase will also lead to a permanent ceasefire and the full withdrawal of Israeli troops from Gaza. 

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The final phase would involve the return of all the bodies of hostages who died, and the reconstruction of Gaza, under the supervision of Egypt, Qatar and the UN.

The talks over a deal intensified in mid-December after a ceasefire between Israel and Hizbollah in Lebanon.

A senior Biden administration official said one issue impeding the completion of the talks was Hamas’s refusal to acknowledge how many hostages it was holding and which ones would come out in the first phase of a deal.

The Palestinian group agreed at the end of December to a list of some 33 hostages, accelerating the end of the talks.

Biden’s top Middle East adviser Brett McGurk was joined in the last days of the talks by Trump’s Middle East envoy Steve Witkoff. A senior Biden administration official called it “a historic and crucial partnership” to finalise the arrangements. 

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The talks ran into the early hours of Wednesday, with McGurk, Witkoff and Egyptian and Qatari officials upstairs with the Israeli negotiators, and Hamas downstairs, nailing down dozens of final details.

Abu Shukri, a community organiser sheltering in the Maghazi refugee camp in Gaza, said people in the neighbourhood had lined the streets and balconies in anticipation of the announcement of the ceasefire deal. As news reached them, people shouted and shot in the air in celebration. 

“We just thank God,” Abu Shukri said of the news. “But we’ve given our children, we gave our parents.” 

Additional reporting by Malaika Tapper in Beirut and Neri Zilber in Tel Aviv

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LA fires are still raging, but forecasters expect calmer winds in the coming days

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LA fires are still raging, but forecasters expect calmer winds in the coming days

An urban search and rescue team from Mexico combs through the ruins of a beachfront house searching for victims in the aftermath of the Palisades Fire in Malibu, Calif., on Tuesday.

Valerie Macon/AFP via Getty Images


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Valerie Macon/AFP via Getty Images

This is a developing story. For the latest local updates head to LAist.com and sign up for breaking news alerts.

Another day of fierce winds gusting to 65 mph in mountainous areas of Los Angeles and Ventura Counties in Southern California was expected on Wednesday, but weather more conducive to firefighting operations is expected soon.

The National Weather Service (NWS) issued another red flag warning for the area until 3 p.m. PST, cautioning of more of the windy and dry conditions that have fed raging fires for more than a week. The strong Santa Ana winds have helped push the deadly blazes through the Los Angeles suburbs, killing at least 25 people and leveling expensive real estate in Pacific Palisades and Altadena.

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All told, the fires have engulfed more than 40,000 acres (more than 62 square miles), according to Cal Fire.

“The good news is that for the last two days we’ve had no increase in acreage at the Eaton Fire and it remains estimated at 14,117 acres with 35% containment,” Los Angeles County Fire Chief Anthony Marrone said of one of the largest fires. 

The Palisades fire, which spans more than 23,000 acres, is just 19% contained, according to Cal Fire.

On Tuesday, meteorologists initially called for particularly strong winds that turned out to be lighter that expected, according to NPR member station LAist.

But a reprieve in the high winds was expected from Thursday into Saturday. NWS meteorologist Ryan Kittell noted that the service is worried about “one last [wind] enhancement” through Wednesday and that peak winds would be highest in Ventura County.

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Speaking at a news conference on Wednesday, Los Angeles Mayor Karen Bass had difficulty describing the devastation that has befallen her city.

“The massive, massive destruction. Is unimaginable until you actually see it,” Bass said. Even so, she said, it was time “to begin to think about how we rebuild.”

Since the fires broke out last week, responders from across the U.S., Canada and Mexico have come to the aid of Southern California. “Yesterday, I also had the opportunity to meet with our international partners from Mexico to express our heartfelt gratitude for their assistance. The outpouring of support from both near and far, I tell you, is absolutely remarkable,” LA Fire Chief Kristin Crowley said.

Of the 25 dead, 17 were killed in the Eaton Fire and eight in the Palisades Fire, LAist says. Officials said of the 13 still listed as missing, two bodies had been recovered but not yet positively identified.

More than 55,000 customers were without power on Wednesday in Los Angeles and Ventura counties, according to PowerOutage.us.

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How to help and stay safe

Resources to help stay safe:

➡️ With fire danger still high, authorities implore you to follow evacuation orders

➡️ What to do — and not do — when you get home after a fire evacuation

➡️ Is smoke in your home? Here’s how to make an air purifier from a box fan

➡️Trying to stay safe in a wildfire? There’s an app that can help

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Ways to support the response and recovery:

➡️ Want to help fire victims? Here’s what experts say does the most good and places seeking volunteers

➡️ Wildfire donations and volunteering: How and where to help

➡️ Share: These are the steps fire victims need to take to make an insurance claim

The California Newsroom is following the extreme weather from across the region. Click through to LAist’s coverage for the latest.

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Pilots Battling L.A Fires Face Heat, Turbulence, and High-Pressure Risks

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Pilots Battling L.A Fires Face Heat, Turbulence, and High-Pressure Risks

Piloting a firefighting aircraft is sweaty, tiring work, Mr. Mattiacci said. The conditions that increase fire risk — hot days, high wind, often mountainous areas — also make for turbulent flying conditions. The aircraft fly at low speeds, increasing the turbulence, he added.

“You get pulled up out of your seat and your head bangs against the roof,” he said. In the hot conditions, pilots must keep just hydrated enough not to have to use the bathroom, on flights that can last up to five hours, he said.

There’s also a risk of flying into the thick, blinding smoke that wildfires send up, he said. The aircraft flying low to the ground — sometimes as low as the height of treetops — meaning there’s a significant risk of flying into power lines, radio towers and buildings.

“When we lose all visual reference, it gets a bit scary,” he said.

The stronger the winds, the harder it is to get close to the fire, as winds push the smoke around and obstruct visibility.

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The large air tankers in Australia drop retardant from an altitude of about 100 to 150 feet, he said, while smaller ones can fly even lower. The largest tankers — which can carry up to 9,400 gallons of fire retardant at a time, and have been used to fight the Southern California fires — drop from about 250 feet, according to the National Interagency Fire Center.

Mr. Mattiacci said that he often feels pressure as he looks down from the cockpit at homes and structures under threat, knowing his job is to help save them. And if the fire retardant doesn’t land where it’s needed, he added, during a fast-moving fire, “there might not be another chance.”

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