An oil fuelled economic boom in Middle Eastern countries is driving local demand for gas oil such as diesel, squeezing supplies to Europe and Asia. This has tightened supply in both importing regions and forced prices of gas oil up this year to around record levels.
The trend is set to continue until new Gulf refineries come on-stream later this decade, traders and analysts said.

Accelerating growth and a construction boom in countries including Qatar and Saudi Arabia have boosted domestic consumption just as the global refining industry is already straining to meet existing demand, particularly from Asia.
The United Arab Emirates' economy grew more than a quarter last year, while Saudi Arabia and Egypt are forecasting growth of at least 6 % this year.

London IPE front month gas oil futures have held above $ 600 a ton since mid-April, more than $ 60 above average prices during the first quarter of the year, and $ 100 above year-earlier levels. In Asia, gas oil prices have held at record levels above $ 80 a barrel since April, as reduced flows from the Middle East compounded a tighter market in the second quarter during a heavy round of refinery maintenance.
Gas oil includes heating oil and jet fuel as well as diesel.

Countries such as Saudi Arabia have been swing suppliers in recent years that can ship cargoes east or west depending on the economics. Rising domestic demand is changing that pattern.
Egypt in June tendered to buy nearly 700,000 tons of 0.5 % sulphur gas oil -- the kind favoured in many Asian countries as a motor fuel-for the second half of this year. This was up almost half from the same time a year earlier.
Qatar, which exports large volumes of distillates, in June issued a rare gas oil buy tender for third quarter delivery. The country is in the midst of a construction boom ahead of its hosting of the Asian Games at the end of this year.

Saudi Arabia may continue to skip spot diesel flows to Asia until year-end as most of its exports are committed tolong-term contract customers, traders said. Saudi state owned company Saudi Aramco, which last sold 120,000 tons of spot diesel for April loading, used to export one or two spot cargoes of diesel each month.
The country cut domestic transport fuel prices by as much as a third from the beginning of May. As well as rising demand to counter the summer heat and feed the region's economic growth, moves by governments to diversify their economies away from reliance on oil production have further fuelled local consumption.