Energy Market Updates

Front month diesel prices are starting to claw their way back from yearly lows posted earlier in the month. Sitting about $.10 higher than 2 weeks ago, all focus is...

Gasoline and Diesel pricing is roughly a dime off the lows of last week.  In normal times ( I thought we were done saying that) with the bullish factors of slowing world demand, a weak US dollar, and additional Iranian sanctions, we would have seen future pricing jump $.20 ahead of a long trader weekend. 

To say I am confused, while easily done, is an understatement.  I would suggest that most market players are as well.   We have seen about $.30 get erased in the fuel pits the last week, all based on what was to be the fallout from US imposed tariffs, foreign countries tariffs, and reciprocal tariffs. 

Sweeping unilateral tariffs of all products imported into the United States has commenced once again……. Well, kinda… While tariffs on many imports were instituted last...

The on again off again foreign policy approach has now reached “ludicrous speed”. In a matter of hours, a delay for Chevron refining operations in Venezuela was granted...

Ahh, the first day of Spring, flowers poking through, grass greening up, Daughters 21^st Birthday (ugh!). Perfect time to inspect tanks and access ways for any damage the...

All Markets appear to be on edge as they try to figure out what the actual effect of tariffs would be with Canada and Mexico, if they are ever more than just words. Fuel...

In a world where common sense is very uncommon, I would like to believe that the collective brainpower of the oil markets still have some remaining. We say all the time...

Future pricing took another dive yesterday continuing the selling rally started last Friday. When the inventory report hit, and saw that exports took a dive, imports...

Fuel prices are remaining alarmingly resilient in the last week as the focus has been completely on the Ukraine- Russian “conflict”. Yes, that was the first step in the...

Just like August are the dog days of Summer, February is the dog days of winter. It can be a grind as mother nature lets you know she is still in charge by gifting us...

The bulk of the Oil Industry was at Defcon 1 on Monday afternoon as 10% Tariffs on Canadian energy products were hours away from taking effect. For much of the Northeast...

After spending the last few weeks on the sidelines, I have found two undeniable truths. First ,my disdain for any network news outlook as a source of meaningful content....

The strength of the futures market since the new year is somewhat perplexing. Many originally thought the ushering in of a new Administration would see pricing continue...

We would have liked to see a nice correction continue after Monday and Tuesdays dip, but the Market Grinch had other plans. Yesterdays bounce higher focused primarily on...

In a whirlwind of news over the past few days, diesel and gasoline prices have risen by over $0.10 each. Over the weekend, the Assad regime in Syria fell after decades of factional fighting. This development is significant, as Syria was Iran's largest ally, and its collapse could exacerbate the already volatile conflicts in the region.

Late last week the focus was strictly on the fear premium associated with increased Russian and Israeli force. Markets have since cooled off as at least one of the...

It’s amazing what the hard times can reveal. Pricing jumped Monday pushing us to the higher end of our current range as new fear arose with the ongoing Russian- Ukraine...

I was out the last few days. Anything happen while I was gone? The elephant in the room is what to expect with a new Administration coming in January. Short term, don’t...

Fuel markets move quicker than the Yankees blowing a 5 run lead. On Monday we thought we were going to continue to reach fresh lows on Diesel pricing as traders sold off...

Future pricing was moderating some until Tuesdays big jump, pushing Diesel futures to the higher end of the current range. The increase came as news that China was...

Diesel futures have lived in this wild $.20 fantasy range for the last week having 3 out of the last 5 sessions show swings of $.10 or more, now settling about $.10...

Welcome to a special Friday edition of the weekly update. It has been a wild week with fuel pricing as we moved out of a comfortable range that was roughly $.20 lower...

Depending upon which news outlet you subscribe to, we are either on the brink of WW3 or about to roast smores around a campfire. Judging by the market direction the last...

Fuel Futures continue to rally from last week as many saw a buying opportunity too good to pass up. Diesel pricing is about $.10 higher than a week ago and Gasoline is...

While Diesel pricing is up about a nickel from Tuesday’s low, it comforting to know that we are still down over $.50 since July. It’s a similar story with gasoline...

Markets have appeared to take every geopolitical risk headline the same way the kids take my advice…. “whatever”. 

Front month Distillate prices are now at the year low, retracing all the way back to where we sat last JUNE. Grabbing a slice of Q4 and Q1 gallons at these levels seem...

Diesel pricing sits about $.10 higher than a week ago, suggesting that the 2.30 mark is a key support level. Future pricing will likely remain in a tight range for the...

Last weeks sell off, fueled primarily from a weaker than expected jobs report, once again solidified the bottom of futures pricing. The Unemployment rate rose to 4.3%,...

Several weeks ago I said how I loved the beginning of summer…. We have officially hit the dog days. Grass is burnt, garden needs to be weeded, Yankees are a half game...

Fuel pricing had a nice correction going the last couple of weeks, both gasoline and diesel were down about $.15. That was put on pause yesterday as the focus shifted...

Since early June we have seen diesel prices add over $.30 in value, peaking last week ahead of the holiday. We have peeled off almost half of that increase in last 4...

The Massachusetts Senate on Tuesday approved a bill aimed at expanding renewable energy adoption in the State. The bill is an attempt to help the State meet the ambitious net-zero by 2050 goal it has set for itself. 

It is very easy in this business to look back and think “what just happened?” With a relatively calm news cycle the last two weeks, calm in the sense of more of the...

A week ago we mentioned that we might reset to a new low if the three key drivers fell in line. They did just that, for the most part. OPEC+ rolled production status,...

As it has been said, “It’s the same old story, same old song and dance” specifically to the Oil complex. The trident of fundamental influences on the market over the...

This is one of my favorite times of year. Grass is green, garden is popping, Yankees are still in first place, kids Interning 40 hours a week, and the bustle of activity...

I talk a lot about the short term happenings, inventories, missile strikes, etc.  The real key is to look at the long term, minimally the mid-range.  While diesel demand kicked up a whopping 10% last week, the four week average is still down by 3.8%.  Similar with gasoline demand that showed strength last week, but is still down about 1% on a four week average.  As core inflation finally ticked down 2 basis points this week, what are the long term effects, should that trend continue?  The FED should start to cut interest rates, slowly over time.  Lower borrowing costs typically stimulate an economy, thus pushing up demand for fuels, and higher prices.  We are about $.15 higher on diesel pricing than we were last year at this time, and spent much of the early summer in a tight range, we may have some downside left as war premiums are shed.

There are a plethora of factors that move futures markets. Technical factors such as support levels, moving averages, strength indicators. Fundamental factors such as...

With June future screen taking over, we have clearly reset the range over the last week. Recall, we noted that many were anticipating ULSD futures to reset back to the...

After last weeks well scripted Iranian Strike on Israel, it appears that the short term range has tightened at a new comfort level. While diesel futures settle below the...

If you were one of the ones I spoke with Sunday evening after news of Irans strike on Israel, you knew I was all in that we were headed for new highs.  In what turned out to be a Nothingburger without any Mac Sauce, Israel and their allies basically played space invaders on Iranian drones and missiles.  US aircraft were said to have neutralized over 30% of the weapons alone.  It will be interesting to see how Irans street cred is affected going forward, as we sit now, the market is unwinding a healthy chunk of the threat premium that’s been added in recent months.  ULSD futures now sit below the much talked about support level of $2.60.    

In what should have been the start of a nice 3 day pullback yesterday, turned into a resetting of ideas. While not long term positive news, morning reports of Inflation...

Special Friday edition! Last week we said fuels were at a pivotal stage and could see some downside. Well, like the Weatherman, it was 50-50 shot. In diesels, we are...

Today will prove to be a pivotal day as Diesel futures sit on the support line of $2.60. While we have shed nearly $.20 in the last two weeks, we still need to settle...

After testing the limits of the top half of the range on Monday, ULSD cooled off the last three days by about $.10 to fall into the comfort zone of the mid $2.60’s. The...

Sideways is the best way to describe the 20 days in the fuel market. Diesel pricing has been stuck in a $.10 range, unable to break below the $2.60 support level....

A massive increase in demand for gas and diesel stalled the downward correction we have been seeing as of late.  Adding to that, both finished products inventories fell last week, diesel futures took the lead and jumped up more than $.05 yesterday.  While we seem to be set for an early spring and hopefully a more robust construction season, the 15% increase in distillate demand has many scratching their heads.  Even with the latest increase, the 4 week average for demand on distillates is still relatively flat.  Gasoline average demand is still down about 3%, even after last weeks 6.4% increase.  Buoying pricing was also the first reported fatalities onboard a Commercial Vessel from Houti attacks in the Red Sea area.  A major global shipping lane, this latest attack will likely all but halt most vessels from entering the area.  The FED is in a holding pattern on rates, but have hinted that they will make “appropriate” adjustments in the coming months as inflation appears to be stalling, how that influences fuel pricing remains to be seen.  I would expect pricing to continue this sideways action and be somewhat range bound for the next week or so.

With the inventory report delayed due the Monday holiday, we were able to enjoy the recent correction in pricing for another day.  We are about $.11 cheaper today than a week ago and $.25 lower than two weeks ago, basically back to where we started at the beginning of the month.  Interesting to note that we are right around the same spot as we were a year ago this time.   It is almost as if the market has priced in the ongoing world tension and once again is looking at more fundamental sources of influence.  The last week was like the most aggressive in terms of shipping attacks, retaliation, and a war of words, yet futures overall are lower.   Additionally, we are coming up on the two year anniversary of the Russian invasion of Ukraine with little or no end in sight.   Traders instead are focused on FED rates and demand figures that still appear to be bearish in nature.

The large Crude inventory build yesterday overshadowed the decline in finished products and took the floor out of pricing yesterday.  Crude increased over 12 million barrels, largely due to the limited refinery activity in the past weeks.  Refineries are running at about 80% capacity due to maintenance, cold, and limited demand forecasts.  Fundamentals have pushed aside the risk premium in the last few days.  The Global conflict premium had shot diesel pricing up almost $.40 since the first of the year.  With distillate demand down about 10% compared to the same time last year, it makes refiners walk a tightrope on producing even with margins very high on distillates, in the $41 per barrel range currently.

Honesty and Integrity in all Dealings is not just a tag line for Dennis K. Burke, Inc, it is one of our Core Values as an Organization.  In a world that has become more and more competitive and polarizing, it is good to know that a true business relationships can still exist.  We strive to be transparent to our many Customers and non-Customer alike.  One of my weekly calls is from someone who is not even a Customer, but he is just simply looking for a new perspective or answer on a problem.    Which ties into another Core Value, a Commitment to Customer Service Excellence.  In my mind, a Customer is not defined as someone with an open account at DKB, it is more of anyone that I can assist or help out, in this often times crazy business.  (many of you have received a note from me with an introduction to someone who you can help out) Partly the reason for these updates is letting you know what is happening, insight in to what may be coming, and keeping an open line of communication.

As the March screen takes over, we are now at levels not seen since early NOV23. Hitting fresh highs the last few weeks has reversed the downward pattern we have been in...

Futures markets continue to trade in wide daily ranges as it digests both inventory and demand data along with monitoring the ongoing “crisis” in the red sea area.  While diesel futures are up over $.20 from the beginning of the month, it appears it could have been a lot worse without taking into account the overall lack of demand.  Both gasoline and diesel inventories are up over last year, +9% on gas and +18% on distillates, the demand figures are what we are watching closely.  Both products are down roughly 3% versus last year, while it doesn’t seem like a large number, in the overall picture it is enough to keep markets in check from skyrocketing higher.  Again, diesel demand is often looked at a measuring stick of the overall health of the economy.  Clashes in the Red Sea shipping lanes appear to be lessening, but still ongoing, keeping many on edge.  It looks like the markets react overnight with news of new attacks, then subside as the day goes on. 

The trend to lower lows every 15 days or so appears to have subsided.  Does this mean the market has found a comfort level for the next few weeks?  My sense is that most are still weighing the Global Demand vs Mid East Risk Premium battle that we mentioned last week.  Global tensions continue to be elevated as Houthis strikes have reached vessels in the Red Sea, Pakistan has now struck Iranian targets and the war of words between all nations ramps ups.  The strike first, speak later motto is what has most on edge.  With Inventories set to be released this morning, a day later due to the Holiday, a careful eye will be not just on stocks, but demand, specifically in the distillate sector.   While the middle of the Country saw a cold snap  last week, here in the Northeast we are starting to get towards more seasonable temperatures.  Again, stay the course with Diesel Winterization programs. 

With the Holidays behind us, we would expect that we see more rational trading on the futures markets.  As mentioned, the last two weeks saw big swings due to low volume.  Still, futures appear to be stuck in this tug of war between what appears to be an overall sentiment of Bearish global demand versus the Risk Premium of Mid East aggression.   Strong increases three times in the last week are largely attributed to Houthis attacks on shipping lanes in the Red Sea.  Tuesdays increases came with reports of 21 drone and missile attacks, however it is to note that none of the launches reached a target, as all were neutralized well before any harm was done.  Still, the possibility exists.  Closer to home, inventories of finished product keep rising.  Gasoline rose over 19mbls in the last 2 weeks even with demand up 10% over last year.  Diesel is somewhat of a different story as inventories have increase for seven straight weeks, and sits about 12% more than last year, demand however, is down just over 10% from last year.  Trucking tonnage amounts to about ¾ of all US freight, and is “not expected to improve in the near future”. This has a significant impact on diesel demand and is often a barometer of the economy as a whole.  This may be a underlying reason for more downward pressure on the ULSD futures. 

It’s hard to stay in the Holiday Spirit with 5 out of the last 6 days being up days.  We now sit about $.20 higher than a week ago.  But if you believe in the trend that we have been in for the last four months, there won't be a lump of coal in your stocking in another week.  Rather, it would suggest that we will reach a new low. 

In a follow up from last week, I was asked by a bunch of people on an item I forgot to mention in winterization.  Kerosene.  Kero is a key component in winterizing diesel fuel as its cloud point is about -6F, significantly lower than standard diesel.  We use kero and diesel blends as a form of winterization throughout the region.  In recent years, the cost of kero has risen dramatically for a variety of factors such as lack of supply, over bought by airlines and it being a seasonal niche product in a backwards futures market.  DKB has supply and the ability to continue to provide these blends, no need to worry. 

The long term fuel price trend continues to head lower with diesel pricing being almost $.20 lower than a week ago.  There is something in the orange that tells me we are not done. 

Another wild day yesterday, and this week, as diesel futures traded in a $.10 range the last two days.  There is something to be said that when you walk into a meeting the market is up $.01 and when you walk out it is down $.08! As the December screen falls off and we look at January, the overall movement still appears to be to the downside.  Again, highs not getting higher and lows getting lower over time.  Inventories showed increases across the board this week with distillates leading the charge with a huge 5.2 million barrel jump.  Demand figures showed drops in both gas and distillates and again diesel down almost 18% compared to last year.  (Although, you wouldn’t know it judging by the endless Fed Ex and Amazon trucks showing up at my door). 

Futures are up and walking, rather running, the last week after being paralyzed by conflicts abroad. 

The run up in futures pricing since June sure seems like a mountain (see graph). As the song says, “It’s hard to move mountains when you’re paralyzed”. Distillates are...

Not to brag, but I cook a mean steak.  Most hate the process, but enjoy the results.  It’s takes time and patience to get the perfect medium rare.  No quick fixes or shortcuts….  Same can be said about fuel pricing the last 30 days.  Even though diesel pricing is down over $.40 since mid September, it has been a real grind getting here.   The Israeli – Hamas conflict continues to be the flame keeping front month prices elevated.  As concern of this developing into a much larger regional conflict persist.  Domestically, fundamentals have kept pricing in check as Inventories have shown a mixed bag, but the real news is in the demand numbers.  Gasoline demand is down slightly over last week and last year, while distillate demand was down a whopping 8% to last week, yet up 5% to last year.  Trucking tonnage, the blood pressure of the transportation industry and overall economy, was down 4.1% in September over last year. (trucking is ¾ of all transportation modes in the US) this typically signals weaker pricing to follow.  Add in that IEA recently published they see peak Oil demand to hit in 2030, vastly different that OPEC’s estimation of 2045. 

The obvious market moving story is the impact on world fuel markets of the Hamas – Israeli conflict that appears to be growing more intense by the day.  As traders are trying to digest what could turn into a regional mess, expect wild swings for the short term. 

A very different picture is painted this week after an almost $.18 drop in Diesel Futures posted yesterday, and another $.07 off presently this morning.  Prior to this, it appeared as though we were on a slow progression downward but instead the proverbial bubble burst.  Call it profit taking or a change in sentiment, it is clear that this correction is needed.  Should another heavy down day remain, we could be in for a return of pricing not seen since early May, which is about $.80 lower.  

At first glance of yesterday's inventory report you would assume that a solid up day was in the making.  As has been the case, the devil is in the details.  While all products showed modest drops, they were largely offset with massive exports, known refinery maintenance and switching to winter grade gas.  The largest market mover was the FED maintaining rates but signaling they expect possibly 2 more rate hikes in the coming months.  A large sell-off took hold pushing diesel futures down almost $.10 before settling down just under $.05.  The profit taking ideology is that if rates get higher, it dampens economic growth thus curbing overall fuel demand, add in that it makes it more expensive for foreign currency buyers of products. 

Coming off the Monday Holiday, prices surged higher Tuesday as OPEC+ heavyweights Russia and Saudi Arabia confirmed they would extend voluntary production cuts through the end of the year.  Fueling the rise from the Cpt. Obvious department, big banks publish reports to expect $107 Crude if cuts maintain.  Buy the rumor, sell the fact.  Diesel had a nice sell off going, but remember, one day doesn’t reverse the trend.  Wednesdays intraday action erased almost all of the gains only to settle down slightly.  While we still sit almost $1 higher in pricing than the beginning of the Summer, you would have to think better days are to come.  Current JUNE 24 Diesel future pricing is $.45 less than front month October 23. 

Depending on the News outlet you watch or read, you will hear two very different narratives.  The one where “prices rises as Idalia makes landfall”….. or “soft demand figures push futures lower.”  It really a tale of two products right now between gas and diesel. 

It is difficult sometimes to stay positive when you see your fuel bill increase $.70 in a month, but recall how we said “Hope’s not a four letter word”.  The last five days (not including today) have seen about $.15 in value come off in diesel pricing so hopefully we are on our way to a modest correction.  It is even more difficult to make clarity of market factors, as most times, human sentiment moves pricing more than data.  With a large Crude drop of almost 6m barrels per day, one would assume a modest increase in futures yesterday.  Not so, as weekly numbers are often subject to sharp swings and monthly numbers are more reliable.  Monthly diesel demand appears flat to slightly down.  The market shrugged off the Inventory data and focused more China lagging economy and Fed policy. 

Starting off this week it appeared that we may have seen the top of the recent rally in the Commodity sector.  That changed Tuesday morning as the EIA released a guidance report that they expect US crude production to increase an additional 200,000 barrels per day based on….. yep, higher prices.  This fueled the indexes in a self-fulling prophecy sort of way and turned around what was a $.05 down day to a $.07 up day.  The buying carried over to Wednesday as the inventory report showed a solid increase in crude stocks with the products showing losses.  Key note on the crude gains is that it looks to be largely due to slashing exports.  Something we have been saying might be a prudent step for a while now.  Distillates are now $.80 higher than July 1^st, erasing the steady 8 month decline that we have enjoyed.  Sentiment is fixated on Saudi led OPEC cuts and appears to shrug off any fundamental data.  It’s almost like mob mentality really.  Crude builds, soft demand, economic uncertainty, should all push prices lower. 

There is no sauce that can make crow taste good.  I’ve been holding to the mindset that Diesel futures market should correct to the mid $2.30s for about a month now.  We have risen over $.50 in that time with every day for the last two weeks being up.  Well, I am going on “the bound to win” theory and sticking with it! 

Fuel prices sit about $.30 higher today than the beginning of the month as we broke out of the comfortable range in MAY through JUNE.  The three week rally can mainly be tied to production cuts, unpredictable inventory reports and mostly an optimistic view on the overall health of the US economy.  The bright side is we are over $1.00 lower than this time last year.  The question remains, does this rally have any legs? 

It has been a tough start for many this summer, the heavy rains throughout the region have delayed projects, hindered marina activity, and limited travel in general.  New Englanders, like the market, are resilient.  We always find a way to bounce back, move forward and DKB will be right there with you. 

Fuel markets appeared to have shrugged off what could have been a historic week, should an actual Coup attempt in Russia transpired.  The current market mood appears to be focused more on actual supply and demand factors.  Crude inventories showed a massive 9m barrel loss this week while finished gas and diesel were relatively flat.  Gasoline futures soared yesterday taking ULSD  along for the ride, although not as much. 

The daily ebb and flow of positive and negative data continues to keep future distillate pricing in the $.20 range since early May.  Although we are on the high side of the range, current inventory and demand data might indicate a slight retreat in the days to come. 

It appears that the Canadian Wildfires have spread a cloudy haze not just over the Northeast but also over the collective minds in the Fuel Markets.  The last few days produced data that simply put, has baffled market sentiment.  First to note, Diesel prices are roughly $2 LESS per gallon today versus a year ago.  Thus, one would assume production and inventories to fall.  This week’s Inventory report showed production is UP 2% and Inventories are UP 2.5%, yet future pricing is about $.20 HIGHER than a week ago.  Again, usually higher stocks trigger lower production and falling prices. 

As we mentioned, futures markets traded in a wide $.20 range for the last month and we are just about back to where we started on May 1^st.   Recent drops center primarily around a pending agreement on the National Debt Ceiling which is expected to roll through the Houses in the coming days.  More importantly to take notice, is that we have shrugged off the huge inventory losses last week and focused more on Chinese demand.  Reports that China’s manufacturing Index fell ½ percent signals the global demand for products and fuel may be slipping.  Domestically,  notes that the Labor market remaining tight may hint that the FED may lift rates in the coming week one last time.  And we might see a bump in Inventories this week unexpectedly as reporting can often get skewed around holiday weeks.  We are also seeing Canadian Oil fields restarting after being shut down due to wildfires.

As expected, pricing has remained range bound the past week as we try to digest the often mixed data and the volatile news cycle.   Thankfully, I have a constant supply of TUMS within arm’s reach.  Pushing prices higher recently are the drop in finished products for gas and distillates as gasoline is about 2% lower than last year and distillates relatively flat.  Additionally, on a global scale, fires in Canada look to be shutting in about 250,000 b/p/d and reports are that Russia will enact another cut of 300,000 b/p/d in the coming weeks.  That is being offset by a lingering fear of another banking crisis should a debt limit deal not be reached and more importantly a pending credit crunch as rates remain elevated.  Domestic demand for both gas and diesel is down about 2% versus last year and while Chinese demand is robust, most say it is well below where it needs to be after a total lockdown. 

After hitting yearly lows last week, Diesel pricing has risen over $.15 in the last week.  As expected, bargain hunters typically buy in regardless of fundamentals.  The increases have been muted somewhat as there is still that languishing fear that demand will fall off the proverbial shelf in the last two quarters. However, this weeks report showed that gasoline and diesel demand in the US remains somewhat strong, posting gains over last week and last year.  While both products showed draws in inventories this week, and Crude showed a solid increase, that appears to more of a factor of less refinery production than anything else.  Inventories for all appear stable with the exception of the SPR which is expected to begin repurchasing soon. 

Typically Inventory levels and price direction have an inverse relationship.  When Inventories rise, prices fall…. When Inventories fall, prices rise.  As one said, “this ain’t no typical market”.   

We suggested last week that there would likely be sideways action in the market as everyone digests what impact production cuts will have, and that is exactly what has happened.  We have seen large daily moves, but overall we are just about where we were a week ago. 

Oil markets moved higher this week primarily on the “surprise” production cut announced Sunday evening.  Recall two weeks ago we cautioned   “ All eyes will be on the FED and what they announce in the next meeting, more rate hikes or not?  Also look to see if OPEC+ decides to cut production to bolster prices in the coming weeks.”    

A surprise increase in Distillate inventories fueled a sell off across all pits yesterday.   Distillates grew by 300k barrels while most expected a decline of about 1.5m.  This, coupled with surprisingly low demand numbers (down almost 7%) saw the pit erase the roughly $.15 in gains added in the last two weeks.  It appears that we are continuing that slow progression downwards with mindless swings in between. 

On February 24, 2022 Russia invaded Ukraine thrusting oil markets into one of the most volatile periods in decades, reaching prices never seen before.  At just over a year later, the APR contract is just $.01 off of where we were when this all started.  (see close on 2.24.23 below and chart) .  The circumstances around the recent drop are obviously derived from the recent banking meltdown. 

Futures markets appear to be content with being rangebound as the last month has seen us bounce back and forth by about $.25 in Diesel.  The last four days has seen diesel futures fall almost $.15 in value. 

We are now a year removed from Russia’s invasion of Ukraine, and like many times in the past, we seemed to have made it through an extremely volatile period.  Since the onset of this “new normal” we have stressed the need to have a strong relationship with your supplier to help navigate the ever changing landscape.  Recall that we said the $2.65 level for the ULSD contract is a key support level, we have now hit that four times and bounced off it (see below) and the market is truly searching for direction with a $.25 range the last few weeks. 

While it might be hard to think about cold weather with temperatures in the 60s across the region, keep in mind that all too often, we still have an arctic blast come through late February into March.  Staying the course with a winterized fuel is critical to a smooth operation this time of year. 

Diesel futures continue to oscillate on both technical and fundamental influences.  We had mentioned to many, don't be surprised if the March contract touches the support level of $2.65 area when in it was trading above $3.25 in late January.  Low and behold on Monday it bounced off $2.6649 before jumping another $.20 over the next two sessions. 

The wild ride continues as in just under two weeks, we have erased $.50 of value on the futures market.  Front month ULSD fell $.1937 yesterday setting us up for a test of key technical support levels. 

Even though Diesel futures have fallen roughly $.20 in the last two days, we are still almost $.40 higher than the beginning of the month.  Still optimistic that we will considerably lower in the coming weeks, however.  

Diesel Futures have risen just over $.25 in the last week, for largely the same reason as they tanked the week before.  China is now lifting most Covid restrictions, as traders now see demand picking up on the world basket.  Even though we are still seeing huge weekly swings, the overall temperature of Distillates looks to be cooling off since trading some $.75 higher than presently mid summer (see below). 

Extreme volatility continues grip the futures markets as the USLD pit erased almost $.30 in the last two days.  Even though its up about $.05 currently, expect this sell off to continue for the short term. 

Future pricing action continues to be as wild as a Patriots game ending, with the average swing intraday running over $.12 from high to low.  Yesterday’s bump higher in diesel was somewhat expected on the heels of three strong down days and a fair amount of market moving news on tap. 

The Market giveth and the Market taketh. 

After falling over $.50 last week, front month ULSD has risen almost $.50 this week.  Gains were primarily on the heels of the Keystone pipeline leak that spewed 14,000 bbls (588,000g) of crude into Northeast Kansas late last week, prompting Operator TC Energy to shut down the entire pipeline.  Main note on why this is significant, is that this leg of the pipeline runs to Cushing, Oklahoma which is the primary metric for weekly Inventories.  As of this morning, product has since started to flow but still not through the damaged section which may take weeks to repair. 

A few weeks ago we hoped to see ULSD trading $.50 lower, as the cash market was tumbling at warp speed.  And would you look at that, here we are! Much of those losses have come from the last 5 sessions alone. (see chart below). 

Hope’s not a four letter word, although, probably not the best strategy in the fuel business. 

I’ve been away…..any talk about diesel supply? 

News cycles have jumped all over the fear topic of only 25 days of supply of distillates in the Northeast.  It is true that PADD1 distillate Inventories are well below the five year average and PADD1A (New England) is even more tight, however, it is important to understand the term “days of supply”.  That is defined as if everything stopped today.  No production, no pipeline shipments, no vessels, no trucking and we kept using as much distillates as we are at this very moment.  Slightly different than how it can be perceived by watching a news clip. 

Distillate inventories were actually slightly up this week as exports fell by some 300k barrels per day, although our inventories are still some 20mbl below last year.  Key to yesterdays inventory report was that refinery utilization (production) is running at 91% which is up over 4% versus last year and historically this is a high rate.

So what does all this mean?   

We have been saying for several weeks that the distillate inventory picture is not the brightest, even more so in New England.  The news cycle has taken hold of this, and judging by the number of calls and conversations I’ve had in the last week, it is starting to sink in. 

Many refer to Diesel as being the backbone of the American Economy.  Trucks, trains, equipment, and ships all rely upon diesel for power.  So when a blowout happens, it can affect mostly all aspects of our daily lives - from the food we buy, to the clothes we wear, and even the way we operate our businesses, even if those blowouts are short lived. 

Since last Thursday we have seen the spread between future prices and cash prices grow to $.80 on Monday only to subsequently fall to $.55 yesterday.  (see chart below).  Tuesday and Wednesday saw diesel values weaken as deals appeared to be getting done for physical product delivered into New York Harbor. 

If there is one thing that I am sure of in all my years in this Industry it is that Customers do not like surprises. 

The last two weeks (or two years for that matter!) have certainly offered up many surprises.  News over the last three days has highlighted “Crude prices falling”, however, the disconnect from Crude pricing to the finished diesel product pricing has never been more sharply contrasted. Front month Diesel futures have once again skyrocketed $.80 to touch the $4.00 level in the last two weeks for the fifth time.  The rapid rise and rapid drop cycle doesn’t seem to be ending anytime soon. 

Volatility continues to have a hold on the diesel market.  In the past week alone, we have dropped over $.30 and subsequently rose $.30 in just four sessions. 

If you were to read the news, it is almost impossible to tell which way the Oil markets are going as the volatility has all pits in wild daily swings.  Fortunately for most of us, diesel prices have corrected over $.30 in the last three days and all but erased the early August climb. 

In the last 6 sessions we have seen ULSD futures slide just over $.50 in value.  While this is good news, the previous 6 sessions added just about the same amount. So basically we are back to the same levels we were mid-August where we all felt pretty positive pricing was moving in the right direction. Much of the rise can be attributed to money being put into the market as an inflation hedge as rates continue to rise, though it is tough to keep that money in long term with the ever present backwardation. 

The past two weeks has seen ULSD rise, and subsequently fall almost $.20 on the front month.  Much of the dip in the last few days came as market players were able to digest some of the details in the 785 page Inflation Reduction Act which appears to moving its way through.  One piece which many believe will have the most impact on futures is that the bill revives lease sales canceled or delayed by President Biden including: one in Alaska’s Cook Inlet  and three in the Gulf of Mexico.  This section also appears to require the Biden Administration to adopt Trump era directives for 2022 oil and gas leasing established.

With Friday and Mondays' sessions cutting into the recent losses on ULSD by about $.35, it’s important to keep in mind the trend is still your friend. With early morning action seeing ULSD down $.08, we are still down over $.80 in the last few weeks. 

In just over two weeks time, front month ULSD is down $1.00, with over $.50 coming in the last two sessions alone. 

Over the last 2 weeks front month ULSD has risen almost $.80  in futures trading,  but it looks like the driver of the run up maybe that crazy cousin RBOB.  Gasoline typically rises this time of year but many thought this year would be different.  Sky high retail prices and massive inflation concerns were thought to put a dent on demand.  However, this weeks inventory report showed a surprise draw in gasoline stocks and strong demand numbers.  It may be a holiday weekend anomaly, but Americans appear to be taking it all in stride, thus giving buyers no reason not to keep buying. 

Diesel prices remain the talk of the table as they have shed over $1.00 in the last 15 days.  Spot cash prices which at one point in early May were $1.25 over futures have since retraced to be roughly $.20 over.   Still, by way of comparison, high to the first quarter of the year where they were pegged mostly flat  to the screen.   (see below). 

There is a fair amount of news on the lack of diesel available in the northeast, and it is actually true. Last week’s DOE report showed that PADD 1 (East Coast) had 95mbls of diesel, that is down from 123mbls last year and 142mbls from 2 years ago. 

The question is why? 

The volatility within the ULSD pit continues to keep everyone scrambling.  $.20 swings from high to low have become the norm.  That coupled the lack of product in the Northeast is putting real stress on not only suppliers but customers alike.  As we mentioned a few days ago, refiners are stocking up on crude and producing as much distillates as they can.  Evident in yesterdays Inventory report that showed Crude surge 8.5mbls and distillate output up over 160,000 bpd.  While diesel inventories still remain low, down almost 1mbls, the demand numbers, down almost 200bpd are pointing to sure fire demand destruction. 

The other day I mentioned how the futures markets rose, yet the cash markets fell.  Yesterday was the reverse for some.  While ULSD futures closed down $.1557 to $4.0413, ARGUS cash trading edged up .0193.  We are obviously in the most volatile period I have seen in all my years.  

Unfortunately you are all reading your nightly pricing correctly.  As seen below, ULSD prices have risen almost a full $1 in the last four sessions. 

On Tuesday morning we were feeling pretty good, relatively speaking, as the ULSD pit was almost .40 less than a week ago.   Demand concerns over China’s lockdown and slowing production rates put pressure on an already inflated market. 

The last three sessions have seen .4373 get peeled off the ULSD front month contract, with massive intraday swings.  Yesterday at the open, APR22 ULSD fell almost .25 before rallying back to finish down only .0673. 

March came in like a lion, lets hope it goes out like a lamb…..  

What you are seeing on your nightly pricing is real, unfortunately.  ULSD futures have risen over .80 in just 5 sessions.  Since late November 2021, when the concern of the latest Covid Variant were announced, the pit has risen over $1.65. 

Oil prices surged another 7% today. At peak intraday highs, WTI hit $105.14/bbl before settling at $103.41.

Oil prices closed up over 3% today, shooting up again on both continuing supply issues, and escalating tension at the Russia/Ukraine border.

Today saw WTI Crude prices break the $90/barrel threshold for the first time since 2014.

Oil prices are continuing to slide back down some after multiyear highs last week. (At time of writing at 10 this morning, both refined products are trending down)

Lots of interconnected events in Energy News this past week or so – we’ll run through and touch on some of the major items and attempt to keep it (relatively) brief.

Oil prices reversed their 7 day losing streak this morning. Last week WTI shed 9% to hit multi-month lows, and this morning it rebounded up to 5% on intraday trading.

Refined products are up huge with both products flirting with double digit increases. At time of writing (1:30pm), refined products were up substantially, with ULSD up $.0997 Sept, $.1001 OCT and Gasoline up $.0937 SEPT, $.0926 OCT. Additionally, WTI is up over the $65/bbl benchmark at $65.68 (+3.54).

Ramped up COVID cases and a stronger dollar pushed oil prices down today - intraday prices had Crude down to 3 month lows (off 4%) . Refined products tanked as well, lunchtime saw ULSD off almost 7 cents (.0674) and RBOB off .0868 on front month trading. 

Weak economic data from the United States & China, combined with higher OPEC outputs and rising COVID cases have again raised concerns about oversupply and weakening demand and pushed markets into sell off territory.

EIA Inventory report showed much larger draws across the board on all products than anticipated. By the official count, Crude drew down 4.1mmb (2.9 expected), distillates 3.1mmb (435K expected) and gasoline 2.25mmb (916K expected). 

By noon trading today Crude was up almost 5%, and on the refined products side, ULSD was up 7 cents and Gas up almost 6 (+.0586) and the market looked like we could see the highest close since mid-March. 

Last month, the OPEC+ decision to stay the course on previously announced production cuts pushed the market up. Yesterday, the OPEC+ decision to reverse course and bring more supply online over the next 3 months (May, June, July) resulted in....surprise! The market going up! 

WTI jumped over 5% late this morning, as news broke that OPEC+ members would be agreeing not to raise production levels in April. According to reports, the current established levels for each of the member countries will be continuing as is through April and May, and the Saudi's are planning to forge ahead with continuing to keep the additional 1 million barrels per day offline as agreed to for February and March.

Despite today's across the board drops on refined prices, (-.0262 UL & -.0255 RBOB) this week saw oil prices overall continue to tick upward. 

Last week's market pushed up on hopes of progress against COVID with vaccine rollouts and encouraging signs of demand growth on fuels. This week however, those hopes were dashed as talk turned to a variant strain of COVID found in the UK that has caused surging infections, and prompted the "Christmas Lockdowns" in other European nations to become increasingly severe. This has all but wiped out any hope of demand stabilizing in the near term.

Markets backed off slightly today across the board. At the close, we saw front month ULSD settle up .0012 to 1.4369 (1.4416 +.0006 for Feb), RBOB dropped .0089 to 1.3077 (-.0087 to 1.3137 for Feb) and WTI closed out at 46.57

Final answers to lingering questions shot markets up today - Oil markets hit an 8 month high and the stock market soared,  with the Dow breaking 30,000 for the first time. Airlines, Cruise Lines, and Energy stocks all pushed up on continuing positive news regarding a COVID-19 vaccination. 

Today we opened up slightly on the NYMEX, and the big drops kicked in around 11am, (up to almost 3% on WTI temporarily) when Speaker Pelosi announced that they expected "pen on paper" for a second round of stimulus packages. The announcement came as somewhat of a surprise, as much of the activity on the second stimulus as of late has involved blocking, show bills, and discussions of everything being postponed until after the Election (and other typical political maneuvering).

Gasoline hit 5 month highs today, with distillates and Crude following upward as well, as twin storms Marco and Laura continue their trek towards the Gulf. 

Oil opened down 6% this morning, and has continued to slide. We are currently off ~7.9% at time of writing (10:30am)

Oil markets were tumbling well before the open today, and unfortunately we didn't see that turn around at all through the course of the official trading day.

Wild day on the markets today! Oil plummeted on news that the production cuts proposed at the OPEC+ meeting in Vienna were rejected by the "plus" contingent of the OPEC+ coalition - namely, Russia.

WTI Crude traded & settled below $50/bbl earlier this week, as prices continued to slide across commodities. Today, however, we saw the trend reversing, with the market up this morning by almost 3%. (Early on, we were up over the 3% mark but gains dropped off slightly after the EIA inventory reports were released this morning.) 

After what seems like 76 days, January is finally over. 

Prices have been somewhat up and down, but largely range bound over the past several days of trading.

What a wild start to 2020 for the oil markets! 

Today, the market surged up to 4% on intraday highs as the Pentagon confirmed that US Airstrikes in Bahgdad killed Iran's top commander, Qasem Soleimani. Soleimani was considered to be responsible for the attacks by Iran on the US Embassy earlier this week, and the strikes have been framed as a retaliation for those attacks, as well as a preemptive action to prevent alleged further attacks in the works on US targets in the region.

Markets shot up today after relative calm earlier in the week, on EIA inventory reporting this morning that showed a 4.9mmb drop in Crude, once again far surpassing analyst predictions.

The markets were initially up somewhat today on EIA inventory reporting and projected slowdowns in US Shale production through 2020.

The NYMEX was down across the board today, with Crude settling at $56.35 (from $57.23), ULSD dropping .0288 to settle at $1.9278, and Gas shedding .0484 to close out at $1.6262.

Saturday, ten unmanned drones struck a major Saudi Aramco facility in Saudi Arabia, and immediately took 5.7 million barrels out of the global supply. The Abqaiq plant that was impacted is one of the world's largest processors. 

After starting the morning up on the EIA inventory reports of large crude draws (-6.9 mmb), the NYMEX dropped later through today's trading, as more information about the firing of US National Security Advisor John Bolton came to light, and as global demand growth estimates were revised downward yet again. 

This past Friday, ahead of the scheduled OPEC meeting this week, Saudi Arabia abruptly announced a new Energy Minister, Prince Adbulaziz. The move sparked momentary concern that this was a signal the Saudi's would be reversing course on the OPEC+ production cut agreement, but it appears they are actually doubling down.

NYMEX shot up today on news that the Trump Administration would be delaying the onset of tariffs on some Chinese made goods (including most electronics) to December, rather than September when they were supposed to take effect.

Markets dropped again today on continued news of both upticks in supply, and drops in demand. 

The NYMEX tumbled back down today, erasing Friday's rally. At the close, ULSD shed .0546 to $1.8356, and RBOB dropped .0635 to $1.7180, with Crude closing at $54.69, which puts us back in the territory we saw on Thursday, essentially. (We were $1.8529, $1.7499 and $53.95 at the close Thursday after record slides).

Markets rebounded somewhat today from yesterdays massive slide.

Oil & Refined products all plunged today on a series of events. Both Brent & WTI were down over 3% this morning, and by 2pm refined products were down over 11 cents.

Crude slipped past the looming $60/bbl benchmark this afternoon, as pricing surged over $2/bbl (~4%). Prices have been largely supported the past several weeks by looming Iranian-US tensions and price level support from the continuing OPEC+ production cuts.

Prices surged this morning after a slow down on Friday, on news from the G20 Summit that Russia and Saudi Arabia have agreed to extend the OPEC+ production cuts by another 6-9 months. The agreement still needs to be ratified at the upcoming OPEC meeting, but that is essentially a formality at this point, given Russia & the Saudi's are in agreement. 

The NYMEX is up big this afternoon in the wake of surprise draws in inventories, ongoing international issues, and the potential closure of the largest gasoline refinery on the East Coast. 

Gasoline spiked this morning, after a refinery explosion shook Southern Philadelphia. At around 4am, a butane vat exploded at the East Coast's largest  refinery, causing large fires and prompting an shelter in place order for the surrounding areas. There are no injuries reported, and CNBC is reporting the flames were relatively controlled with the SIP order lifted around 7am. You can follow this story here: Massive explosion at biggest gas refinery in East Coast 

So much for no major events on the horizon.. After yesterday's drop, where Crude closed out at a 5 month low, this morning the NYMEX was up sharply across the board on developing news of tanker attacks in the Gulf of Oman. 

Prices continued to slide Wednesday as the EIA reported builds in Crude supplies of 2.21mmb for the week ending June 7th. (Yesterday, the API report indicated even more drastic build of 4.9mmb). This afternoon, WTI closed out at $51.14/bbl, the lowest close since January. WTI has dropped close to 20% since April peaks. 

The NYMEX was up today across the board, with Crude closing out at $63.08/bbl, comfortably above that $60 benchmark, and refined products both edged up almost 3 cents, with ULSD closing at 2.0424 (+.0290) and RBOB settling at 1.9687 (+.0288).

EIA Inventory reports for the week ending March 22 indicate that Crude inventories showed a build, while finished products (Diesel & RBOB) showed draws. 

Prices have been trending upward this week, largely based on OPEC following through on production cuts. Namely, we saw a drop in output of around 800K bpd in January by its member nations. This would seem to indicate that the so called "OPEC+ deal" to cut output and thus global oversupply is actually being followed, and it appears it is starting to have the desired effect - stabilizing prices higher than we have seen over the past year or so.

The US Energy Information Association - EIA - is out today with the Short Term Energy Outlook report with projections for 2019 & 2020.

As we head towards the end of 2018, it looks like oil prices will finish the year out down about 20%. We saw wildly fluctuating energy markets throughout the year, but the fundamental factors of supply and global economic growth concerns kept the downward pressure on pricing over the long term. 

Markets reversed in a big way today, with front month WTI Crude surging 3% after yesterdays 7.3% decline. At time of writing, both diesel and gas are up (ULSD +.0447, RBOB +.0307)

Futures are crashing on the NYMEX today, with WTI down around 5% thus far on the day, around the $48/bbl mark, on track to potentially close out at a 15 month low. Refined products are tanking as well, at time of writing, ULSD is off .0472 & RBOB is down .0341

OPEC, as well as the so called "OPEC+" partners have reached a tentative agreement on production cuts, causing the oil market to spike Friday. The cuts reportedly amount to 800,000 bpd on OPEC's part, and an additional 400,000 bpd (combined) from allied nations, including Russia. No specific cuts by country were committed to, or at least they were not confirmed in statements. 

Despite earlier in the week price increases on global supply concerns (Iran), and Hurricane Michael making landfall in the Florida Pan handle in the afternoon, Wednesday saw oil prices slump 2% on intraday trading.

The Carolina's are bracing for a potentially "once in a lifetime" strength Hurricane and evacuations are already underway. Hurricane Florence is expected to make landfall Friday at a category 4, with the preceding rain & storm surge expected to begin early Thursday. 

Oil was down today as the market weighed out OPEC speculation on one hand, and a drop in US Crude inventories on the other.

WTI was in the red today ahead of the EIA inventory report.

Today, the NYMEX continued it's winning streak - At the end of the day, we settled up across the board yet again, with Crude settling out at $48.75/bbl (+1.7%), ULSD climbed +.0268 to $1.5953 and RBOB edged up +.02111 to $1.6173. 

Today saw oil prices have the biggest one day rally of 2017 thus far, with WTI Crude surging up 3.3% ($1.55) to settle out at $47.89/bbl. Likewise, refined products surged, with ULSD jumping over 5 cents (+.0516) to 1.5685, and gasoline jumped +.0394 to settle at 1.5962.

The oil markets were down sharply this morning on increasing cynicism that, essentially, global supply will not be driven down sufficiently by either OPEC or "non-cartel" producer production caps, or the summer driving season in the U.S. being upon us (despite the weather here in Boston, technically yes, its summer driving season). 

Crude closed out today at over $50 ($50.44 to be exact) which is the highest close we've seen since June. ULSD closed up .0135 to $1.5958 and RBOB ended up .0050 at $1.4978.

On Wednesday, OPEC countries made a surprise agreement to cap production at 32.5-33 million BPD at their meeting in Algiers (if you’re keeping score at home, current production is about 33.24mmb.. insert yawn here, in other words). This marked the first deal since 2008, largely on account of Saudi-Iranian tensions – more on that later. Oil spiked on the news before backing off slightly over the remainder of the week.

Crude jumped on today’s inventory report after jumping up on the overnights last night as well. Post close yesterday, the API numbers were indicating significant draws and the EIA release backed that projection up.
The EIA report this morning indicated that Crude inventories dropped by 14.5 million barrels for last week, which is the biggest drop we’ve seen this millennium (since 1999).
Analysts are partly blaming the effects of Hermine on the Gulf Coast delaying production and explaining the draw down in stocks.  
Gasoline stocks also dropped, by 4.5 million barrels, and also unexpectedly.
Today closed out up across the board, with diesel up .0557 to $1.4822, Gas up .0701 to $1.4165 and Crude closing out at $47.62. (significantly up from yesterday’s Crude settle of $45.50)
An interesting aside on gasoline’s jump today was that the lowest Labor Day retail gasoline prices in 12 years were seen this past weekend, and if you jump online there are literally dozens of articles projecting that the post summer driving season price levels for gasoline will drop below $2 per gallon. It’s more likely than not that these articles are correct versus today’s inventory and price rebound. Nothing has changed fundamentally with either Crude or gasoline in terms of long term supply and demand outlooks (despite some new rumblings about Russia and Saudi Arabia, as usual).

August has been all over the place. Crude futures this month were up 23% in less than 3 weeks as of the 28^th. We've bounced from an August 10^th low of $41.71 to an August 19^th a high of $48.52 -  and today we’re in the middle at $46.35.

After a strong start to the month of July post Brexit, markets settled down again today after closing out August's futures yesterday. 

Yesterday traders across the globe were all but certain that Britain would never vote to leave the EU. As a result we saw confidence in the markets, including oil.

Crude closed out at $51.23 this afternoon, the highest it’s been since July 2015, up from yesterday and holding firm over the $50 benchmark.  

Before todays across the board tumble, the markets had been rather stable this week, comparatively speaking, even in the wake of several major relevant news events and economic reports. Let's start it from the top: 

In a suprise move today, the oil minister of Iran stated that Iran would support the effort by OPEC and non-OPEC countries to stabilize the oil market and oil prices. The now-confirmed rumor that the Saudis and Russians were amenable to agreeing on a production ceiling has been circulating for a while, and served to briefly prop prices Tuesday - but the lack of a solid agreement, and the assumption that Iran would not cooperate had backed prices off their intraday highs. 

Another wild week!

Today saw a swift and decisive reversal of last week's out-of-nowhere rally on Crude, Commodities, and Stocks. Not too surprising, given there were really no changes in fundamentals that justified a rally of the magnitude we saw, outside of the ever present fear of supply disruptions whenever the East Coast faces major snowfall, and the market being technically oversold. 

Overnight and early trading on Crude was up - bolstered by the performance of the Chinese Markets (they went up instead of crashing hard enough to trigger the circuit breaker this time). US Stocks, bonds and equities all climbed along, and it looked like today was poised for a rally, or at least the proverbial "dead cat bounce"

Yesterday we saw a somewhat unexpected rebound on oil prices and the stock market - but it all came crashing down today. Crude has officially closed out under $30 per barrel - settling at $29.42, the lowest it's been in 12 years. RBOB closed off almost 5 to settle at $1.0212 - dangerously close to the $1 threshold, and ULSD continued its slide down another .0465 to $0.9343.

Yesterday, Crude briefly dipped below $30 per barrel for the first time in 12 years, before closing slightly over at $30.34. Crude was up on the overnights, as a result of the API forecast projecting draws of close to 4mmb.

The last day of trading in 2014 saw Crude close out at $53.27/bbl, which was down 45% from the prior year. 2015 continued the trend with WTI dropping another 30% over the year - with December 31, 2015 settling out at $37.04.

This past week has been a wild one.

And down we go again - today WTI closed down almost 3%  (the final close was 40.74), which is around an 8% loss on the week. Brent came within 2 dollars of a low not seen in over 6 years, and also ended the week at around an 8% loss, according to Reuters.

Today's EIA Inventory Report indicated that Crude Inventories were up 2.8 million barrels for the week ending October 30th, and the market reacted accordingly. API had forecast a build as well, so prior to the EIA release we were trending down about 1%, which accelerated to over 3% once the official numbers came out. 

Yesterday we saw the beginning of a reversal of last week's rally on more bad economic news from China that came out over the weekend. Specifically, manufacturing dropped again, remaining under the level that is seen as official contraction. Once again, this impacts the oil markets because we're counting on their demand remaining high, or even increasing. That doesn't happen when your manufacturing slows down. Monday settled down marginally with the exception of gasoline. (Crude at 46.14, ULSD down -.0098 to 1.5069 and Gas up 37 points to 1.3753).

Today however, was an entirely different story. At the close, ULSD settled at 1.5660 (+.0591), Gas was up (+.0702) to 1.4455, and Crude was up almost 4% to 47.90, with Brent settling up 3.5% to $50.51.

Another day, another price drop.

Crude prices are on track to be down around 5% on the week. There were some initial jumps this morning on hope that the newly announced Chinese Stimulus Package could ramp up demand. Prices reversed sharply and quickly, however, as the dollar continues to crush other currencies, which almost universally sends commodities in general on a slide. 

Crude came back in a big way in trading today – with intraday highs briefly breaking $50 before settling out at $49.43/bbl. (Fun fact – we haven’t seen WTI break $50 since July)

Today once again started in positive territory, with Crude up almost 2% and refined products creeping higher, but we saw a quick reversal mid-morning when products dropped into the negative, where they would end up settling at the close. (Crude ended up settling down to $47.81, ULSD was down -.0319 to $1.5796 and Gas dropped -.0462 to $1.390)