Fuel Futures Rally Amid Rate Cuts & Global Events
Fuel Futures continue to rally from last week as many saw a buying opportunity too good to pass up. Diesel pricing is about $.10 higher than a week ago and Gasoline is...
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Fuel Futures continue to rally from last week as many saw a buying opportunity too good to pass up. Diesel pricing is about $.10 higher than a week ago and Gasoline is...
Front month Distillate prices are now at the year low, retracing all the way back to where we sat last JUNE. Grabbing a slice of Q4 and Q1 gallons at these levels seem...
Diesel pricing sits about $.10 higher than a week ago, suggesting that the 2.30 mark is a key support level. Future pricing will likely remain in a tight range for the...
Last weeks sell off, fueled primarily from a weaker than expected jobs report, once again solidified the bottom of futures pricing. The Unemployment rate rose to 4.3%,...
Several weeks ago I said how I loved the beginning of summer…. We have officially hit the dog days. Grass is burnt, garden needs to be weeded, Yankees are a half game...
Since early June we have seen diesel prices add over $.30 in value, peaking last week ahead of the holiday. We have peeled off almost half of that increase in last 4...
I talk a lot about the short term happenings, inventories, missile strikes, etc. The real key is to look at the long term, minimally the mid-range. While diesel demand kicked up a whopping 10% last week, the four week average is still down by 3.8%. Similar with gasoline demand that showed strength last week, but is still down about 1% on a four week average. As core inflation finally ticked down 2 basis points this week, what are the long term effects, should that trend continue? The FED should start to cut interest rates, slowly over time. Lower borrowing costs typically stimulate an economy, thus pushing up demand for fuels, and higher prices. We are about $.15 higher on diesel pricing than we were last year at this time, and spent much of the early summer in a tight range, we may have some downside left as war premiums are shed.
In what should have been the start of a nice 3 day pullback yesterday, turned into a resetting of ideas. While not long term positive news, morning reports of Inflation...
A massive increase in demand for gas and diesel stalled the downward correction we have been seeing as of late. Adding to that, both finished products inventories fell last week, diesel futures took the lead and jumped up more than $.05 yesterday. While we seem to be set for an early spring and hopefully a more robust construction season, the 15% increase in distillate demand has many scratching their heads. Even with the latest increase, the 4 week average for demand on distillates is still relatively flat. Gasoline average demand is still down about 3%, even after last weeks 6.4% increase. Buoying pricing was also the first reported fatalities onboard a Commercial Vessel from Houti attacks in the Red Sea area. A major global shipping lane, this latest attack will likely all but halt most vessels from entering the area. The FED is in a holding pattern on rates, but have hinted that they will make “appropriate” adjustments in the coming months as inflation appears to be stalling, how that influences fuel pricing remains to be seen. I would expect pricing to continue this sideways action and be somewhat range bound for the next week or so.
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.