Yesterday illustrates perfectly how reactive fuel markets are to world stress. You can look at ULSD futures as the blood pressure reading the financial world. Right now its reading 180 over 120….
As news of a potential cease fire broke and vessels traffic resumes, May diesel futures were down over $.80, settling down $.6690. Gasoline closed down almost $.30. Great to see, but as the day wound down, more news of continued clashes and strait closures surfaced which is preventing another day of larges drops today. Nobody wins with high priced markets and never before seen volatility. Staying informed and having close contact with your fuel supplier is critical now more than ever. I originally thought this would be a 20-30 day event, but as Chris Stapleton says, “I was wrong”. All signs now point that this may drag out longer as demands on both sides seem very far apart. The US approach of bombings will continue until desired results are achieved, historically doesn’t work. It will take regional players and others to step and unfortunately strait traffic will likely be a major bargaining chip. Please do not hesitate to reach out with any questions.