Santa runs on diesel. Every year, the global holiday economy relies on a short, intense surge in distillate fuel consumption to power trucks, ports, warehouses, cold-chain logistics, and backup generators — all operating under winter conditions. This holiday-driven commercial surge places heavy strain on logistics systems and exposes just how thin the safety margin has become in diesel markets that are already structurally tight, particularly in Europe.

After crude oil, diesel is the most economically important fuel in the global energy system — and Christmas reinforces that reality. In the United States, distillate demand typically rises as December begins, not primarily because of heating, but because freight activity peaks just as inventories have already entered their seasonal drawdown phase.

The latest weekly data show US diesel supply running around 4.0 million barrels per day, near the upper end of the post-pandemic range, according to the US Energy Information Administration’s weekly petroleum status report. At the same time, commercial distillate inventories have hovered around 110–115 million barrels heading into late December — well below historical early-winter averages based on EIA inventory data. This leaves very little margin for error once logistics activity accelerates in the final weeks of the year.

Europe’s situation is even tighter

Since losing Russian diesel flows, Europe has become structurally dependent on long-haul imports from the US Gulf Coast, the Middle East, and India. Gas oil inventories in Northwest Europe have struggled to rebuild to comfortable levels, a pattern reflected in Amsterdam–Rotterdam–Antwerp stock reports, while December shipping demand routinely drains whatever buffer remains.

On paper, supply appears adequate. In practice, the system becomes highly sensitive to disruption, because replacement barrels travel farther, arrive later, and compete for the same logistical capacity required to move finished goods.

What makes Christmas especially critical is that diesel demand during this period is largely price-insensitive. Parcel delivery, food distribution, cold storage, and retail restocking all expand simultaneously.

Unlike gasoline — where weaker consumer confidence can curb demand — late-December diesel consumption is tied to the physical movement of goods. Parcels do not stop moving simply because margins compress. Delivery delays quickly translate into lost sales, spoiled inventory, contractual penalties, and reputational damage. Demand is governed by calendars and contracts, not prices.

This dynamic shows up clearly in refining margins. In a typical year, diesel cracks widen in winter as heating demand overlaps with logistics demand.

In 2025, however, signals were more distorted. European diesel cracks weakened in November amid mild weather and subdued industrial activity, a trend reflected in ICE gasoil and ultra-low-sulfur diesel spreads. Yet spot premiums for prompt barrels remained firm in several regional markets, according to European distillate market assessments. This divergence between paper pricing and physical markets is precisely the type of distortion that Christmas amplifies, as immediate logistical needs override macro signals.

Refinery behavior tells the same story

Every December, refiners wish for greater operational flexibility, but holiday demand forces high utilization rates — particularly at distillate-heavy plants. US Gulf Coast refineries often run above 90% utilization through late Q4, based on EIA refinery utilization data, prioritizing diesel output even when gasoline margins weaken. This reduces system slack, making any disruption — from weather, equipment failures, or pipeline constraints — far more painful.

Exports add another layer of risk

The United States has become the marginal diesel supplier to Europe, with distillate exports often running between 1.1 and 1.3 million barrels per day, according to EIA export flow data. These barrels do not pause for Christmas. Any disruption to the export chain during this period — whether fog in the Houston Ship Channel, Atlantic storms, or congestion at Northwest European ports — occurs when European buyers have the least flexibility and inventories are already depleted.

This is where the phrase “Santa runs on diesel” becomes literal.

The seasonal holiday economy depends heavily on the reliability of distillates. Diesel is present at every step: long-haul transport, regional distribution, last-mile delivery, cold chains, backup power, port equipment, and warehouse operations. It is the fuel whose failure is delayed — but whose impact is immediate once it occurs.

There is also a clear blind spot in the energy transition that becomes visible every December. Electricity has made inroads into urban delivery and short-haul fleets, but peak holiday logistics still rely on diesel. Cold weather reduces battery range, charging infrastructure becomes congested, and payload constraints matter more as volumes surge — issues well documented in US Department of Energy analyses of electric vehicle performance in cold conditions. Even fleets that operate electric trucks often revert to diesel during the holiday peak. In practice, the system falls back on oil — specifically diesel — precisely when it is under maximum stress.

From a market perspective, diesel stress often appears before crude oil stress. Brent prices below $60 do not necessarily imply an oversupplied energy system. As highlighted in the International Energy Agency’s December oil market report, weak crude prices can coexist with tight diesel markets, volatile spot premiums, and localized supply shortages. Christmas sharpens this contradiction by compressing demand and shrinking flexibility.

Thin liquidity makes matters worse. The Christmas week is notorious for low trading volumes, even as physical markets experience peak strain — a reality often noted in year-end oil market liquidity analyses. Stress shows up first in local premiums, freight rates, and delivery delays, not in headline futures prices. This is why year-end disruptions often feel sudden: the warning signals exist, but they sit outside the most visible benchmarks and are therefore overlooked.

As markets move into the new year, this fragility may matter more than usual. Low distillate inventories, heavy reliance on exports, and limited spare refining capacity suggest diesel markets could remain vulnerable even if crude prices stay range-bound — a view consistent with the EIA’s short-term energy outlook.

Christmas does not create diesel fragility. It simply reveals it in full. Diesel is where pressure surfaces first — and Christmas narrows the margin just a little further.

Copper prices fell sharply during Monday’s trading amid thin liquidity and profit-taking as 2025 approaches its end.

Copper, a key metal for the renewable energy and industrial infrastructure sectors, is on track to post its strongest annual gain in more than 15 years, having risen by over 35% during 2025.

The metal has increasingly been grouped alongside silver and gold as an investment safe haven, amid concerns over the weakening value of the US dollar. In December, copper prices surged past $12,000 per tonne, marking their strongest rally since the post-2008 global financial crisis recovery.

In a post on X, one analyst wrote: “Copper has officially entered price discovery after decisively breaking through key resistance levels. It may prove to be one of the most important macro assets in 2026 in my view. Price discovery moves are often explosive by nature, and I believe that is the case here. Let’s go.”

According to Parthiv Jhonsa, Vice President at Anand Rathi Institutional, the sharp rise in Hindustan Copper shares — which have nearly doubled since the start of the year — is not solely driven by higher copper prices. Instead, it reflects a combination of sustained growth in production volumes, extensions of mining concession contracts, and structural constraints on the supply side.

Speaking to ET Now, Jhonsa said that copper prices reaching $13,000 per tonne on the London Metal Exchange have undoubtedly supported sentiment, but the stock’s re-rating points to deeper fundamental drivers beyond short-term price movements.

Meanwhile, the US dollar index edged down by less than 0.1% to 97.9 points by 14:44 GMT, after touching a high of 98.1 and a low of 97.9.

In US trading, March copper futures fell 4.3% to $5.58 per pound by 14:40 GMT.

Bitcoin rose to trade near the key $90,000 level on Monday after briefly breaking above it earlier in the session, but the cryptocurrency once again struggled to hold gains above that threshold, repeating a pattern of failed rebound attempts seen earlier this month.

The world’s largest cryptocurrency was last up 2.2% at $89,663.6 as of 02:07 a.m. US Eastern Time (07:07 GMT).

Bitcoin has tested the $90,000 level several times throughout December, but each attempt has been followed by pullbacks as buying momentum faded and trading volumes remained thin heading into year-end.

Bitcoin supported by Fed rate-cut bets, but stalls near $90,000

Monday’s advance in Bitcoin was supported by broader strength across financial markets, as investors continued to price in expectations that the US Federal Reserve will deliver further interest rate cuts in 2026 following its latest reduction.

Lower interest rate expectations typically support risk assets, including cryptocurrencies, by reducing the appeal of holding cash and fixed-income investments and encouraging capital flows into higher-yielding alternatives.

The move also came as Bitcoin attempted to catch up with gains seen across other asset classes.

Gold hovered near record highs, while silver and platinum posted fresh peaks, as investors assessed ongoing geopolitical risks, including US-led talks aimed at ending the war in Ukraine, which have yet to deliver a clear breakthrough.

Strength in precious metals underscored continued demand for safe-haven and alternative assets, providing a supportive backdrop for cryptocurrency markets.

Despite the positive tone, Bitcoin’s gains remained capped, with traders pointing to profit-taking and weak liquidity as key headwinds. The $90,000 level continues to be viewed as a major psychological and technical barrier, requiring stronger catalysts to trigger a sustained rally.

Institutional participation was also mixed, after having supported crypto markets earlier in the year, as some funds adopted a wait-and-see approach ahead of key economic data releases at the start of the new year.

Cryptocurrency prices today: modest gains for altcoins

Most major alternative cryptocurrencies posted modest gains on Monday.

Ethereum, the world’s second-largest cryptocurrency, rose 2.7% to $3,018.92.

XRP, the third-largest cryptocurrency, gained 1.5% to $1.90.

Solana advanced 2.7%, while Cardano and Polygon edged slightly lower.

Oil prices rose by more than $1 on Monday, as investors weighed talks between the US and Ukrainian presidents over the possibility of reaching an agreement to end the war in Ukraine against the risk of oil supply disruptions in the Middle East.

Brent crude futures climbed $1.27, or 2.1%, to $61.91 a barrel by 12:00 GMT, while US West Texas Intermediate crude rose $1.29, or 2.3%, to $58.03 a barrel.

Both benchmarks had fallen by more than 2% on Friday.

Axel Rudolph, an analyst at IG, said energy markets moved higher as geopolitical developments supported crude prices, with Brent gaining on renewed tensions in the Middle East and shifts in peace talks over Ukraine. He added that low liquidity could amplify volatility heading into the start of the new year.

Ukrainian President Volodymyr Zelenskyy said on Monday that significant progress had been made in talks with his US counterpart Donald Trump, and that both sides agreed US and Ukrainian working groups would meet next week to finalize outstanding issues aimed at ending Russia’s war on Ukraine.

Zelenskyy added that holding a meeting with Russia would only be possible after Trump and European leaders agree on a peace framework proposed by Ukraine.

Yang An, a China-based analyst at Haitong Futures, said the Middle East had also seen instability recently, citing Saudi air strikes in Yemen, which may be fueling market concerns over potential supply disruptions.

Saudi Arabia, the world’s largest oil exporter, is expected to cut the February official selling price for its flagship Arab Light crude to Asian buyers for a third consecutive month, reflecting spot market declines due to ample supply, according to a Reuters survey of six Asian refining sources.

Investors are also awaiting US inventory data for the week ended December 19. A broad Reuters poll showed US crude stockpiles are expected to have fallen last week, while distillate and gasoline inventories are likely to have risen.

The report has been delayed from its usual Wednesday release due to the Christmas holiday.

Strong Chinese seaborne crude imports have also helped tighten market conditions elsewhere, according to Giovanni Staunovo, an analyst at UBS. He added that the $60-a-barrel level represents a soft floor for Brent prices, with a modest recovery expected in 2026, as supply growth from outside the OPEC+ alliance may begin to falter by mid-2026.