Resetting Ranges & Shifting Dynamics

With June future screen taking over, we have clearly reset the range over the last week.  Recall, we noted that many were anticipating ULSD futures to reset back to the $2.40 level, closing yesterday right at $2.45 affirmed that notion.  But again, Diesel is currently riding on the heels of gas as it led the way yesterday falling almost $.12, and over $.17 in the last four days.  Earlier in the week, reports that Houthis Rebels in the Mideast have been “essentially neutralized” surfaced. On cue, it prompted an immediate anti-ship missile launch by the group in the Red Sea that was intercepted by coalition forces almost immediately.  This coupled with whispers that an Israeli-Hamas cease fire is in the works has taken much of the threat premium out of the market.  Yesterday had a double whammy of bearish news.  On the inventory front we saw an  increase in gasoline stocks, flat demand, and refineries not even up to peak operation.  More poignantly, was that the Fed will hold rates at current levels  “until we've gained greater confidence that inflation is moving down sustainably”.  Many expected that they would start cutting interest rates in June, but current data suggests it may be a bit farther off in the summer.  While the retreat has made pricing a bit more palatable, keep in mind that gasoline is still about $.10 higher than we were last year at this time.  We enter in the pivotal time for fuels, will demand kick up or continue to lag.  Will refiners pull back and we see self-induced shortages?  Whatever your needs are, it’s good to know that DKB can provide the right product, service or solution that will allow you to operate your business without worrying about fuel.  Lets talk.