Energy Market Updates

It has been hard to find any good news in the fuel industry lately. Add to that a Texas refinery fire that put offline a 2m gallon per day diesel unit on Tuesday which halted the market sell off seen the day before. The Market is now tasked with trying to identify how much of the 15 point plan to peace is attainable, valid, or even received by Iran. It is largely held that there may be several factions seeking control in Iran, making it difficult to achieve any type of agreements. As some ships start to trickle through the Strait of Hormuz, it still may be a while until we see any type of normalized traffic, as I am guessing it will turn into a fee based passage system. They should put some of those gantry systems like on the Mass Pike!

As we wind down the third week of this armed conflict with Iran, fuel markets continue to soar higher, now roughly $2.00 per gallon higher on distillates. Recent increases come on the fear of the conflict spreading to other nations, and the stalled reopening of the Strait of Hormuz.

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...

Futures markets surged higher yesterday on both a breakdown of Ukrainian-Russian talks along with naval “exercises” by Russian and Iranian fleets next to the Straits of Hormuz. A long talked about chokepoint in shipping and oil movements, any stress in that region will trigger panic buying. Good news is that east coast cash prices for products did not move has high as futures, which is reflected in your pricing. Still Diesel futures sit roughly $.50 higher than early JAN, touching the very top end of the range. Warmer temps into the Northeast are also helping to ease physical pricing as product movement and usage gets back to a normal pace.

There is light on the horizon. It finally appears that the Northeast is making its way out of the longest severe cold stretch in over 10 years. Not to mention some heavy snow accumulations throughout the region. During this period we saw Natgas spike forcing most power plants into curtailment relying upon fuel oils to produce electricity, terminal ports needing ice breaking ships to allow offloading of product, four hour loading lines at terminals, and every fill cap north of Baltimore frozen. Lingering effects persist with Kero pricing remaining very high as seasonal stocks start to dwindle. With the predicted warm up, we hope to see some return to normalcy in the next few days.

Well, it’s official. The northeast has completed the coldest 20 day stretch since 2015. And like the Patriots returning to the Super Bowl, it’s not over yet! And I was mocked at a 12-5 prediction…

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.   

Lets get this straight, because the last three days of 100 degree temps across the region has got me a little foggy. In two weeks’ time, Israel and Iran were involved in...