Forget crude for a second
Tom Kloza’s message is basically: everyone loves staring at oil like it’s the main character, but diesel is the part of the movie that actually moves cargo. And right now, diesel prices are flashing red-hot after hitting a fresh record high.
Why this matters
If you’re an investor, diesel is one of those annoying-but-important inputs that can sneak into everything: shipping costs, food prices, industrial margins, and good old-fashioned inflation. When diesel gets pricey, the bill can ripple through the economy faster than a viral meme.
The refinery squeeze
Kloza says US refineries are running at 97% to 98% of capacity, which is basically the energy equivalent of squeezing toothpaste until the tube is doing backflips. That leaves very little room for surprise outages or demand spikes.
- High refinery utilization can support refined-product prices
- Tight diesel supply can pressure transport and logistics costs
- Persistent strength in fuel prices can add inflation headaches
Big picture: crude gets the headlines, but diesel often tells you where the real pinch is happening.