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There is a fair amount of news on the lack of diesel available in the northeast, and it is actually true. Last week’s DOE report showed that PADD 1 (East Coast) had 95mbls of diesel, that is down from 123mbls last year and 142mbls from 2 years ago.
The question is why?
The other day I mentioned how the futures markets rose, yet the cash markets fell. Yesterday was the reverse for some. While ULSD futures closed down $.1557 to $4.0413, ARGUS cash trading edged up .0193. We are obviously in the most volatile period I have seen in all my years.
On Tuesday morning we were feeling pretty good, relatively speaking, as the ULSD pit was almost .40 less than a week ago. Demand concerns over China’s lockdown and slowing production rates put pressure on an already inflated market.
The last three sessions have seen .4373 get peeled off the ULSD front month contract, with massive intraday swings. Yesterday at the open, APR22 ULSD fell almost .25 before rallying back to finish down only .0673.
March came in like a lion, lets hope it goes out like a lamb…..
What you are seeing on your nightly pricing is real, unfortunately. ULSD futures have risen over .80 in just 5 sessions. Since late November 2021, when the concern of the latest Covid Variant were announced, the pit has risen over $1.65.
Oil prices surged another 7% today. At peak intraday highs, WTI hit $105.14/bbl before settling at $103.41.
Oil prices closed up over 3% today, shooting up again on both continuing supply issues, and escalating tension at the Russia/Ukraine border.
Today saw WTI Crude prices break the $90/barrel threshold for the first time since 2014.
Continuing fallout over the downed Malaysian jetliner led to increased international tensions today (deja vu?). Russia called US accusations that it supplied the anti aircraft missles responsible "groundless". President Obama insisted that Russian involvement warranted further sanctions by Western nations. And thats what we saw happen this afternoon - Canada issued new sanctions targeting financial and energy related companies (much like the US sanctions from last week) and instituted travel bans on certain individuals.