At first glance of yesterday's inventory report you would assume that a solid up day was in the making. As has been the case, the devil is in the details. While all products showed modest drops, they were largely offset with massive exports, known refinery maintenance and switching to winter grade gas. The largest market mover was the FED maintaining rates but signaling they expect possibly 2 more rate hikes in the coming months. A large sell-off took hold pushing diesel futures down almost $.10 before settling down just under $.05. The profit taking ideology is that if rates get higher, it dampens economic growth thus curbing overall fuel demand, add in that it makes it more expensive for foreign currency buyers of products.
Additionally, truck tonnage was down 2.3% in August, marking the sixth straight month of year over year declines. Many point to last year being a shipping anomaly coming out of COVID, but it is still hard not to take into account the declines. Even though we are seeing a rebound today, expect a choppy downward progression as we close in on the winter months. Speaking of winter….. It’s not too early to start thinking about winter product and the associated costs. Availability of Kero as a blending component appears to be a concern for many. Feel free to reach out to discuss how we can assist and also talk about pricing next year's needs. Schedule a Meeting