Crude Inventory Build Overshadows Finished Product Decline

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.

As we all look towards not seeing anymore snow, Taylor Swift at football games, and cold temps, its important to know we are not done yet.  The next two weeks are often times when we get that arctic blast over a weekend making for a difficult Monday if you moved to a standard diesel too early.  Stay the course with your winterizing, DKB continues to stock and deliver winterized diesels.   Look for pricing to find its way back down over the next few weeks in much the same pattern we saw from September to January and hopefully we fall back another $.25 from here.

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