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!
Strong economic data has pushed commodities as US GDP grew 2.4% last quarter, thus continued higher demand equals higher prices. On the other hand, the FED hiked rates another ¼ percent this week which should be bearish for the products. It appears to be overshadowed by the view of many that this is the end of the hikes as the Fed Chairman noting that “Fed staff no longer were forecasting a recession later this year, as it had in prior months.”
Throw in the inventory report that showed stocks fall across the board and demand surprisingly resilient, the $.20 jump the last few days is easily explainable. Gasoline is in the same boat, rising almost $.50 is the last month. It is important to acknowledge how long, or how well, will OPEC+ countries be able to maintain their self-imposed production cuts as many Nations economies are negatively affected by them. Saudi Arabia only is down over 8%, and the fact that all these countries are continually wrestling for market share, this could bring on a huge correction in prices.
High prices are fun for nobody, we at DKB understand that, and work hard to provide outstanding service at a fair price. I am always willing to discuss how we can assist your specific needs, please do not hesitate to reach out. If you would like to schedule a time to talk about your specific needs, you can pick a time that works for you best using this link: Market Talk - Set a Meeting