Resetting to a New Low, Shifting Sentiment, & Pricing Perspective

A week ago we mentioned that we might reset to a new low if the three key drivers fell in line.  They did just that, for the most part.  OPEC+ rolled production status, cease fire talks continue in the middle east, and the FED is quite on rates…. “or are they?” (in my Keith Morrison Dateline voice).   While we have been enjoying the falling prices, primarily driven by sluggish demand (see chart below), it will likely come at a cost.  Yesterdays movement was somewhat of a headscratcher as Inventories were up, demand was down, so you would assume we would post another strong down day.  Instead we jumped higher, maybe just a dead cat bounce.  Although, it seems reasonable to believe that sentiment may have shifted and the economy is slower than what was or is being reported.  The flaw is that policy for tomorrow is based on data from yesterday, so there is a built in lag.  Rate cuts will likely lead to higher Crude and its offsprings pricing in the coming weeks.  This is a unique period where Q3 & Q4 of 2024 as well as all of next year, looks attractive to firm up gallons from a pricing perspective.  Also, will the lackluster demand force some to throttle back shipments and result in product tightness again?  Be sure your supplier has the ability to offer you a fixed price if it makes sense for your business and most importantly, they own physical gallons so you are not left dry in your busy season.  Always willing to discuss your specific needs.

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