Surprise surge in overseas demand boosts US diesel margins

New York

US refiners are enjoying their strongest diesel margins in months as surprisingly robust overseas demand, combined with lower domestic production, has triggered an unusually large drawdown in inventories for this time of the year.

The surge in appetite for US diesel comes on the heels of a mild winter that sapped demand for heating oil and punished margins as products went straight into bulging storage tanks. US independent refiner profits dropped 74 per cent in the first quarter compared with last year.