U.S. Energy Secretary: "Diesel Prices to Fall Below $6 per Gallon as Europe Releases Reserves"

[Financial News]  U.S. Secretary of Energy Chris Wright predicted on the 4th (local time) that diesel prices in the United States would fall below $6 per gallon as European countries release their diesel reserves.
Appearing on CBS that day, Secretary Wright described the Group of Seven (G7)'s agreement to release 100 million barrels of diesel and crude oil reserves over the next four months, led mainly by major European countries, as "a very significant measure."
Secretary Wright emphasized, "(Europe) does not refine enough diesel to supply its own economy, so it naturally stockpiles a large amount of diesel (for emergencies). They very much want U.S. diesel to continue flowing into Europe. They have a lot of diesel in storage. There is no reason not to release some of it."
He said U.S. diesel prices had fallen by more than 20 cents per gallon following news of Europe's reserve release and predicted, "It won't be long before we see them fall below $6 (per gallon)."
He added, "This lowers not only diesel prices in the United States but also those in Europe and around the world. It will lower diesel prices in the United States and worldwide through the winter." He also said refinery operations would increase in the meantime, adding, "We will see diesel prices continue to fall next spring as well."
Asked whether Donald Trump's threat to ban U.S. diesel exports had been instrumental in securing the G7 agreement, Secretary Wright replied, "It may have helped considerably in reaching the agreement just concluded (the G7 reserve release)."
Donald Trump has repeatedly said he could ban diesel exports, while Secretary Wright and the U.S. refining industry had opposed the idea. The Trump administration was recently reported to have issued Europe an ultimatum that the United States would ban diesel exports unless Europe released its strategic reserves.
Secretary Wright expected the price decline to continue, citing "increased energy supplies coming through the Strait of Hormuz" and the fact that "U.S. gasoline production is currently at a record high, while gasoline demand has begun to decline as the summer driving season ends."
However, when asked whether there was any guarantee that an "October surprise" would not occur—with Iran raising military tensions this month ahead of the U.S. midterm elections on November 3 and driving up energy prices—he replied, "There are no guarantees."
Regarding the possibility of the war with Iran escalating in November, when the U.S. military's third aircraft carrier group arrives in the Middle East, he said, "The president is always planning for contingencies and is always negotiating." 


[email protected] Lee Seok-woo, International Affairs Specialist Reporter