March Trends & Global Shocks

As the March screen takes over, we are now at levels not  seen since early NOV23.  Hitting fresh highs the last few weeks has reversed the downward pattern we have been in for most of Q4 2023.  We now sit about $.35 higher on the ULSD futures screen than mid DEC23.  Inventory and demand figures for both gas and distillates are a hodgepodge of data.  Most willing to look at over a broader range than just the weekly swings, agreeing that overall diesel demand is off about 2% and gas is down about 4% when comparing to the same period last year.  One would think that this should put downward pressure on the products.  However, the news Monday of the death of 3 US Service Members in Jordan solidified the changed of tone for much of the market sentiment.  Look for sharp sanctions towards Iranian Oil production, which has increased to about 3 million barrels per day, up over 1mbpd in the last 2 years.  As we mentioned previously, the global risk premium has now outweighed the weak US fundamentals at least in the short term.  With the New England winter being somewhat calmer and milder than expected thus far, I would hope that regional price drops in physical product offset higher futures markets.  Although, it seems like we always get that late February freeze to keep us in check.  DKB continues to be staffed with the dispatch, drivers, trucks and products to make sure your operation runs smoothly in this often times volatile business.   Some Q3 values are still available on a fixed price front even at current levels.