A gas flare at the ExxonMobil Baytown refinery in Texas on Jan. 26. (Antranik Tavitian/Bloomberg)
January 27, 2026 2:49 PM, EST
Key Takeaways:
- U.S. diesel futures jumped above European prices as a major winter storm and freezing temperatures disrupted refinery operations and boosted heating oil demand.
- Analysts said cold weather in the Northeast and seasonally low diesel stockpiles, along with refinery outages and upcoming turnarounds, intensified the price surge.
- Prices may ease once the cold snap passes, though some facilities and waterways continue working to restore normal operations.
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U.S. diesel futures are surging ahead of benchmark European contracts as a winter storm, followed by continued frigid temperatures, piles pressure on the country’s fuel market.
New York Harbor diesel’s premium to European futures surpassed 40 cents a gallon on Jan. 26, the highest level in over three years and continues to hover around that marker, according to fair value data compiled by Bloomberg. The huge storm has impacted some U.S. refinery operations as the icy temperatures support demand for heating oil, a diesel-type fuel.
“It’s the cold weather in the U.S. northeast which has triggered a spike in prices in New York,” said Natalia Losada, an oil products analyst at Energy Aspects. Once the cold snap is over, “there’s room for this spread to correct a little,” she said.
Several U.S. plants, including ExxonMobil’s Baytown mega refinery and Goodyear’s Bayport chemicals facility, curtailed operations Jan. 24 ahead of the freeze. The waterway connecting Houston’s refineries to crude imports and global export markets for their products also closed Jan. 24, partially re-opening the morning of Jan. 26.
The freeze has “threatened Midwest U.S. refinery production,” said James Noel-Beswick, head of commodities at Sparta. Diesel stockpiles have also been seasonally low in parts of the country, and the imminent start of a heavy U.S. Gulf coast refinery turnaround period hasn’t helped, he added.
(Bloomberg)
The northeast — where the majority of the nearly 5 million households that used heating oil as their main heating fuel in the 2023-2024 winter were located — experienced the heaviest snowfall during the recent storm.
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