Energy Market Updates

 Last week we were optimistic that markets would turn south with news that Iran and the US would be meeting over the weekend to hammer out a resolution. That all turned Saturday morning with a tweet that the meeting was off. The past week has shown little in way of the conflict ending anytime soon. A senior meeting at the White House indicated that we could be in for “months” long standoff, and the President stating that he would like the Russian-Ukraine conflict to end at the same time.

 Who said you cant triple stamp a double stamp? In an effort to restart ship traffic through the Strait of Hormuz, the US has begun a blockade of any ships going to or out of Iranian ports. Also attempting to secure passage for all other vessels. Effectively showing Iran they won't be able to fire upon vessels moving through the tight passage. Depending upon which news outlet you listen to, it appears to be working. Those countries who depend on Iranian product like China and India, are now forced into the discussions on some type of resolution.

Yesterday illustrates perfectly how reactive fuel markets are to world stress. You can look at ULSD futures as the blood pressure reading the financial world. Right now its reading 180 over 120….

It is amazing that with over 25 years in this industry you can still see something new. Monday brought the most volatile day on record for diesel futures. The trading range from low to high was over $1.20…. in one day! Tuesday and Wednesday saw ranges of over $.50! As we stand right now, pricing is roughly $1.50 higher since the Iranian conflict started. Again, the US doesn’t have a supply problem, but because oil commodities are a world basket of pricing, the shipping bottleneck around the Straits of Hormuz is causing the increases. Releasing oil reserves, while largely symbolic, will take 3 to 4 weeks to hit markets. The only cure is to get vessels moving again. The Saudis are at max capacity of their Petroline, an east-west pipeline to the red sea, unfortunately it brings back into play the Houthis attacks around the Yemen coast.

Well, That escalated quickly. Since news broke early Saturday morning of the joint US-Israeli strike on Iran, ULSD futures are up over $1.00 and Gasoline is up roughly $.35. Everyone has asked why ULSD much more than Gasoline. The partial answer is three-fold.

 As much of the northeast is still digging out of the blizzard, Thank You for keeping those fills and access ways clean. With some local communities still enforcing...

Distillate pricing now sits almost $.60 more than the first of the month. A dramatic rise fueled by renewed pressure on Iran, Cold covering half the country, a massive east coast storm and a surprise pause in Interest rates.

My mother always said “some things are better left unsaid”.  Topics like Religion, your In-laws cooking, or desire to annex Greenland.  Typical stuff.  As the week started,...

It has been yet another bizarre week in the fuel world, although we are relatively numb to the bizarre.  Almost two weeks after the removal of the former Venezuelan dictator, markets jumped roughly $.20 as focus shifted to the next crisis, Iran.   One would have thought we would see some additional downside or at least a calm period as the US tries to figure out its restructure plan for Venezuela.   

The period between Christmas and New Years is historically a calm one in the fuel markets. Traders tend to balance out positions, end user demand dips with time of and...