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We have been saying for several weeks that the distillate inventory picture is not the brightest, even more so in New England. The news cycle has taken hold of this, and judging by the number of calls and conversations I’ve had in the last week, it is starting to sink in.
Many refer to Diesel as being the backbone of the American Economy. Trucks, trains, equipment, and ships all rely upon diesel for power. So when a blowout happens, it can affect mostly all aspects of our daily lives - from the food we buy, to the clothes we wear, and even the way we operate our businesses, even if those blowouts are short lived.
Since last Thursday we have seen the spread between future prices and cash prices grow to $.80 on Monday only to subsequently fall to $.55 yesterday. (see chart below). Tuesday and Wednesday saw diesel values weaken as deals appeared to be getting done for physical product delivered into New York Harbor.
Oil prices surged another 7% today. At peak intraday highs, WTI hit $105.14/bbl before settling at $103.41.