Two fuels that power the global economy flash red in Europe

The expected consumption drop in the two fuel types this year is well over half a million barrels-a-day versus pre-pandemic levels not far off a Belgiums worth of overall oil usage...

As a major importer of diesel-type fuel from the Middle East, India and the US, and a regular exporter of naphtha to East Asia and Latin America, any significant drop in Europes usage is likely to have knock-on effects for economies and oil markets around the world...

The numbers on naphtha are stark: consumption is set to fall more than a quarter this year versus 2021 to 844,000 barrels-a-day, the lowest its been in 48 years, according to Ciaran Healy, an oil market analyst at the International Energy Agency..

In China, demand is booming despite the travails of its property sector: during January-August of this year, diesel-type fuel was up by 40% versus the same period in 2019 and naphtha consumption has more than doubled in the corresponding period, according to JODI data...

Still, the trucking industry is showing signs of nascent recovery, and rail freight is rising as well, analysts at JPMorgan said.. Naphtha is typically used to make gasoline in the US while cheaper natural gas liquids a byproduct of drilling shale oil have become the preferred feedstock for petrochemicals...

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