The David Lin Report · Wednesday, September 2, 2026
The current market conditions, including high refining margins and a European energy crisis, could lead to a substantial increase in oil prices without necessarily causing further demand destruction. This is due to factors like Russia's reduced refinery capacity and China's decreased refined product exports.
“And then diesel is a really big deal. Diesel prices are really high and that's going to force inflation into the goods economy and then also into data centers. These things that are getting constructed, this whole AI value chain, it's very oil dependent. People don't want to talk about it.”
“And then there's one last thing. European natural gas prices are soaring. There's an energy crisis in Europe on top of all this. And they can't go burn diesel cuz they're short diesel. So the in 2022, one of the ways that they solved their energy crisis was by burning I think they got to almost 2 million barrels a day of oil and oil products they were burning for power generation in late 2022 and they can't do that right now cuz they would be burning heating oil and diesel and that's what we're short and that's already $200 a barrel.”
“So you can see some of that margin from diesel in particular shift over to oil price. And the the problem with that is and the reason it's so bullish for oil is you could actually see oil prices go up, let's say $30 a barrel and have no more demand destruction than you're already seeing.”