In addition to causing spikes in electricity demand as people fire up air conditioners, the scorching temperatures have led to a spate of disruptions at oil refineries. That's helped keep US gasoline prices elevated and saw diesel cost increases easily outpace those for crude. This summer was particularly gruelling: July was the world's hottest month on record, following the hottest June.
The searing heat led to refiners cut oil processing by at least 2% globally over those two months, according to Macquarie Group. While that might not seem that much, the outages have hit a refining system that's been stretched by years of under-investment and oil product markets that were already tight due to the war in Ukraine.
"The extreme weather conditions we have seen this year really are a big deal," said Ben Luckock, the co-head of oil trading at commodities behemoth Trafigura Group. "The heat has created huge problems for refineries in Europe and America with more outages and problems that are harder to fix," he said in an interview in Singapore this week.
European crude processing dropped by 700,000 barrels a day over the summer from a year earlier, according to an estimate from industry consultant FGE. That's around 6% of regional throughput, based on figures from BP Plc's latest Statistical Review of World Energy.
More than half of the drop was due to the heat, said Steve Sawyer, FGE's director of refining & head of downstream.
