Expect oil prices to continue to grind higher, says Kpler's Matt Smith

Summary

Matt Smith, Kpler's director of commodity research, explains why oil and refined product prices are elevated. He says the Middle East conflict has removed about 8.5 million barrels per day of production, refinery run cuts have reduced gasoline and diesel output, and Russia's diesel export ban is tightening diesel supply. Smith expects oil prices to grind higher and sees diesel as the biggest pressure point, with pump prices feeding into broader costs.

• Oil prices have risen about $30 from early last month.
• The Middle East conflict has taken roughly 8.5 million barrels per day offline over six-and-a-half months.
• Refinery run cuts have reduced global gasoline and diesel output.
• Diesel is at a record $6.40 per gallon, and Russia's export ban adds pressure.
• A prolonged Saudi East-West pipeline shutdown could remove 100-120 million barrels.
• China has spare refining capacity but is not rushing back into the market.
• Smith expects oil to grind higher and diesel to lead product upside.