Light Diesel Oil Price Trend and Forecast

Light Diesel Oil Regional Price Overview

Get the latest insights on price movement and trend analysis of Light Diesel Oil in different regions across the world (Asia, Europe, North America, Latin America, and the Middle East & Africa).

Light Diesel Oil (LDO) Price Trend for the First Half of 2024

In the first half of 2024, the price trend for Light Diesel Oil in India closely mirrored the fluctuations in global crude oil prices, which were significantly influenced by geopolitical tensions in West Asia and output cuts by the OPEC+ alliance. The Indian economy, being heavily reliant on oil imports, felt the ripple effects of these global developments. The extended output cuts by OPEC+ and disruptions in oil supply routes due to geopolitical tensions led to tightened supply conditions, contributing to an overall upward pressure on LDO prices in the first quarter. Additionally, higher crude oil prices translated directly into increased costs for LDO, as it is derived from crude oil refining. This situation was further exacerbated by rising inflation risks, impacting India’s trade balance and deepening its deficit.
 

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Despite these challenges, India’s energy security efforts, including the enhancement of its Strategic Petroleum Reserve, aimed to mitigate the impact of such price volatility. However, India also enjoyed a position of advantage with Russia and continued to import heavily despite the sanctions from the Western world. This led to a slight stabilization in LDO prices in the second quarter. OPEC+ extended its production cut further in its annual meeting in June to stabilize the global oil market. Overall, LDO prices remained anchored throughout the first half of 2024.

Analyst Insight

According to Procurement Resource, moving ahead, LDO prices are likely to face more upward pressure as not just the supply volumes but the supply routes are also being affected because of the ongoing geopolitical disturbances.
 

Light Diesel Oil Price Trend for the Second Half of 2023

Light diesel oil is an essential fuel source for many industries, including construction, manufacturing, agriculture, and transportation. Light diesel oil is used by industries as fuel for machinery and equipment, heating, and power generation.

Due to its high energy density and relatively low viscosity, it may be used in a variety of industrial processes, guaranteeing effective operation and top performance in a range of applications. Its price trend is thus derived from the market dynamics of these downstream industries and the supply rate of crude oil.

Refiners in Asia, one of the top-importing regions, faced challenges in securing light diesel oil due to additional output cuts by Saudi Arabia and Russia. These cuts in imports tightened supplies, leading to a surge in global prices. In view of the limited number of shipments reaching the Asian ports, the market players started looking for alternate options in order to control the hike in the prices of light diesel oil.

India has shifted to Russian Urals crude due to difficulties in sourcing, while China increased imports from non-OPEC+ suppliers like Iran, the United States, and Brazil. This scramble for cheaper oil slightly lowered the costs but disrupted the refining processes, potentially leading to the imbalanced production of light distillates.

Analyst Insight

According to Procurement Resource, the price trend of Light Diesel Oil is estimated to depict an oscillating trajectory in the upcoming months based on the rising restrictions over the export rates of Saudi Arabia.
 

Light Diesel Oil Price Trend for the First Half of 2023

Light diesel oil is mainly used as an energy source in industrial operations like boilers, furnaces, low-rpm engines, fertilizer plants, etc. So, the price trend for light diesel oil are primarily driven by the demands from these sectors along with the existing inventory levels.

In the first half of the year 2023, the market outlook didn’t improve much for light diesel oil as the economic and industrial recovery was slow in China, and the Spring Festival holidays further added to this trend. Supply chains were recovering, but inflation was still influencing the market direction. With the hesitation in big purchases, the industrial demands were still lacking, and thus, the light diesel oil prices fluctuated at the lower end for the majority of the discussed period.

Analyst Insight

According to Procurement Resource, light diesel oil price trend are anticipated to continue wavering in the coming months since the market demand will continue to be the primary driving factor.
 

Light Diesel Oil Price Trend for the Second Half of 2022

Asia

In the third quarter, the consistent decline in the demand and weak condition of upstream prices of crude oil, particularly in China resulted in the southward journey of light diesel oil. On the other hand, the trend in India attained stagnancy in the said period as the consumers there showed consistent interest in view of the rise in construction and logistic activities. In China, in a major part of the fourth quarter, the prices also remained on the lower end of the spectrum; however, in the last month of the year, the trend shifted, and prices started moving northwards, although at a slower pace.

Europe

The European sector experienced a reduction in the upstream crude oil prices, resulting in regular fluctuations in the pricing patterns of light diesel oil. A simultaneous depreciation in the region’s economy and rise in the inflationary and bank interest pressure on both the manufacturing and consumer sectors of the market and its ill consequences were well evident in the movement of light diesel oil price trend during the third and fourth quarter of 2022.

North America

With the slow-paced movement of the end-user industries along with a reduction in production costs, the traders had no choice but to reduce their quoted prices of light diesel oil in the last two quarters of 2023. The domestic manufacturers and traders also noticed that the Asian importers presented an almost negligible number of inquiries, reducing the export rates from the region and hampering the trajectory of the light diesel oil price trend.

Analyst Insight

According to Procurement Resource, the price trend of Light Diesel Oil is expected to showcase significant depreciation in the upcoming quarters as the market indicators do not seem to be in favor of the light diesel oil price trend.
 

Light Diesel Oil Price Trend for the First Half of 2022

Asia

The per litre price of light diesel oil at the end of the first quarter of 2022 was 93.11 INR. In India, the month of March saw an improvement in the fuel's overall performance.

The lack of Chinese cargoes enabled LDO profit margins to reach all-time highs. A typical Singapore refinery made a profit of 60.57 USD/barrel on producing 10 ppm gasoil, the primary component of diesel.

Light diesel oil prices stood at 89.66 INR/L at the end of the month. In India, the overall performance of both fuels remained stable in June 2022.

North America

In California, the average price of Light diesel oil for the first quarter of 2022 was 4.60 USD/gallon, up 0.45 USD/gallon from the same month the previous year. Meanwhile, the average price of diesel for the same period was 4.78 USD/gallon, up 0.33 USD/gallon.

This follows an energy supply deficit that hit Europe in the latter half of 2021, as well as worries about oil supply bottlenecks in the wake of the Russia-Ukraine war. It is nearly 30 USD higher than the annual average in 2021.

In California, the average price of Light diesel oil for the second quarter of 2022 was 6.15 USD/gallon, up 1.55 USD/gallon from the first quarter, while the average price of diesel was 6.24 USD/gallon, up 1.46 USD/gallon over the same period.
 

Light Diesel Oil Price Trend For the Fourth Quarter of 2021

North America

In January, Brent crude oil spot prices averaged 87 USD/b, up 12 USD from December 2021. The prices had been steadily rising since mid-2020, owing to steady draws on global oil inventories, which averaged 1.8 million barrels per day (b/d) during the third quarter of 2020 and the end of 2021.

They have also increased as a result of rising market concerns about the prospect of oil supply disruptions, particularly as a result of tensions in Ukraine, and falling market concerns about the Omicron variation of COVID-19 having widespread implications on oil use.

Asia

In India, prices as of 1st December 2021 were around 50840 INR/kL. In January, Saudi Arabia's state oil company Aramco boosted the official selling prices (OSPs) for all crude grades sold to Asia's key market for the second month in a row, following strong advances in the Middle East spot market the previous month.

The price hikes were announced on Sunday, despite the Organization of Petroleum Exporting Countries and their Allies, including Russia, deciding last week to keep raising supplies by 400,000 barrels per day in January. On Monday, global crude futures jumped by more than 1 USD/b after Saudi Arabia raised prices.

Europe

The price of heating oils in Italy as of 15-Nov 2021 was close to 1.4 EUR/L whereas in December, the prices fell significantly reaching a value of about 1.37 EUR/L, post which the prices recovered, reaching a 1.40 EUR/L by the end of December.
 

Light Diesel Oil Price Trend For First, Second and Third Quarters of 2021

North America

In the winter of 2021/22, the average price of heating oil in the United States was anticipated to reach 3.39 USD/gal. Following an energy supply constraint of fossil fuels such as natural gas and coal in Europe and Asia, energy costs rose significantly in winter. During the heating season, from October to March, prices for heating oil are collected.

Asia

Top oil exporter Saudi Arabia was projected to raise its August official selling prices (OSPs) for Asia for the second month in a row, mirroring stronger crude benchmarks. The August OSP for Saudi flagship grade Arab Light was predicted to climb by 65 cents a barrel on average, according to sources at four Asian refiners, with projections ranging from 50 cents to 70 cents a barrel. In India, industrial fuel was at high values during March 2021.Per kilolitre light diesel oil prices were 45,260 INR indicating an increase of approximately 620 INR or by 1.39%.

Europe

Goff heating oil market price for July 2021 was 77.32 USD/barrel at the beginning of the month and 76.38 USD at the end of the month. The highest monthly price was 78.42 USD/barrel, while the lowest monthly price was 69.24 USD/barrel. Crude oil had a good start to 2021, in stark contrast to last year, when the pandemic wrecked demand for all commodities, resulting in a price collapse that lasted well into 2020.
 

Light Diesel Oil Price Trend For the Year 2020

Asia

In India, light diesel oil prices for the second half of June 2020 across all the marketing depos increased by around 3540 INR/kL or 13.23%, to a value of 30,290 INR/kL. For June 2020, the Pakistani government decreased light diesel oil prices by 9.37 INR/l., petrol by 7.06 INR/L and kerosene by 11.88 INR/L. Following this new approval, light diesel oil prices decreased from 47.51 INR/L to 38.14 INR/L.

North America

In the winter of 2020-2021, the average price of heating oil in the United States reached 2.25 USD/gal. The prices were gathered between October and March, when the heating season was in full swing. The WTI crude oil price is the most important determining factor in home heating oil pricing in the United States.

Europe

Despite minor fluctuations, the average price of heating oil in the United Kingdom had been on the rise in the past year.  By 2020, it had reached 698.3 EUR/1000 gal. According to the French Ministry of Ecological Transition, a litre of diesel cost 1.43 EUR in the second week of August, while super unleaded petrol cost 1.59 EUR. At the height of the epidemic in May 2020, prices had dropped to 1.16 EUR for diesel and 1.23 EUR for gasoline as mounting Covid cases brought the world to a halt.

Procurement Resource provides latest prices of Light Diesel Oil. Each price database is tied to a user-friendly graphing tool dating back to 2014, which provides a range of functionalities: configuration of price series over user defined time period; comparison of product movements across countries; customisation of price currencies and unit; extraction of price data as excel files to be used offline.