The Importance of Kerosene in Winterization

In a follow up from last week, I was asked by a bunch of people on an item I forgot to mention in winterization.  Kerosene.  Kero is a key component in winterizing diesel fuel as its cloud point is about -6F, significantly lower than standard diesel.  We use kero and diesel blends as a form of winterization throughout the region.  In recent years, the cost of kero has risen dramatically for a variety of factors such as lack of supply, over bought by airlines and it being a seasonal niche product in a backwards futures market.  DKB has supply and the ability to continue to provide these blends, no need to worry. 

Futures took a dive on Monday, with ULSD falling almost $.10 as concerns over the long term demand figures keep resurfacing like that annoying toy your got your kid for Christmas.  However, the market has a short memory and the news that the FED maintained rates and hinted at cutting rates next meeting provided a boost with futures having almost erased Mondays losses.  I would expect to see pricing stay within this range over the last few weeks of the year as it tends to be a heavy vacation time and traders settle up year end positions.  Diesel and gasoline inventories saw slight increase last week and demand was flat to slightly higher for both, giving support to an already charged index.  As many of us have already seen the first snow fall, please keep those fills and stairs free of snow and ice as you are never the last stop!

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