Hurricane Francine, Inflation, & Demand Dynamics

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 pricing as well.   The last two days movements have been a tug of war between the impact of Hurricane Francine against demand and Inflation data.   While Francine moved through the Gulf of Mexico, forcing many drill rigs to be evacuated and shut down, many speculated that this would be the stopgap futures needed to prevent further downside as roughly 50% of production in the area was shut in.  Hurricanes are not like your in-laws and stay forever, the move quickly and it’s how well you recover that affects pricing.  However, as demand figures were released, on a 4 week average, both gasoline and diesel is flat to last year.  With falling pricing, some might expect higher consumption figures.  With lackluster demand, the impact of the Hurricane has been largely muted.  Most expect a quarter point rate cut this month with the 5^th consecutive month of cooling inflation data.  Theoretically, this should push commodities higher.  In the meantime, take advantage of the dip by securing a slice of your outer months needs.  With a 24x7x365 crew, we are always here to discuss your specific needs.