Diesel Futures at a Crossroads: Key Factors to Watch

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 below this level to see further downside.  Plush gas inventories and lackluster demand kept the whole complex in the red yesterday.  Diesel saw declines in inventories last week and even posted stronger demand numbers to last year.  Most are rationalizing stock losses to heavy export numbers which can skew weekly data.  A wet last few weeks is not helping to kick start an early construction season in the Northeast, as some up north had to still plow snow last week!  So much for that early reminder to make sure all fills and access points are cleaned and painted!  Thus far, the range of $2.60 to $2.80 is still intact.  A lower close today could signal a buying opportunity for Q2 & Q3.  All eyes are on now what most are saying is a sure thing, that the FED will start to cut rates as early as June.  Rate cuts support higher commodity prices as lower rates stimulate stronger demand for products, so our time below $2.60 may be limited.  Keep those communication lines open with your Rep as this market can change on a dime, being up to date on the latest news and goings on is critical.