Venezuela Tariffs, Chevron Operation Delays, and Market Jitters
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 for 60 days, but a 25% secondary tariff was placed on any foreign buyers of Venezuelan product that supplied the US. Also a 25% tariff on any cars or parts coming into the US is set to take affect April 3rd. Short term, this has brought unstableness to an already jittery market. It’s like giving a Red Bull to a 5 year old on Christmas Eve. When you add in recent Inventory data that shows Diesel demand off 10% and gasoline down 1%, you would expect a large scale sell off due to concerns of the overall economy. However, keeping that in check are our trading volumes. For diesel specifically, exports are down 5.6% and imports down 27% over last year, does this mean more finished product is staying here? One would hope. Longer term, I would still lean towards pricing to remain in this $.15 range for the next few weeks as we see what policy sticks and what the real affect will be. The pending summer gasoline grade switch looks to add several cents per gallon at the pump, but it will need stronger demand figures to support any more increases.
