Sanctions, Supply, and Semis: What’s Moving the Markets

We appear to be on a four session rebound, after the past weeks meetings with both combatants and European leaders.   The narrative that is coming across is that the US will loosen Russian sanctions, Ukraine will likely loose some land, but will get a fair amount of rebuilding support from the US and Europe.  However the news outlets seemed to be more focused on what people were wearing to the meetings than actual outcomes.  While it is positive news on a peace front, it could likely lead to higher pricing down the road.  Domestically, inventories of gasoline and diesel remain solid, demand is a tough nut to crack.  Gasoline implied demand is down just under 1% over last year.  Those bike lanes appear to be working.  Diesel demand has remained consistent year over year with trucking tonnage finally showing some increases in July.  Trucking moves roughly 70-75% of all freight in the Country, and as mentioned, is looked at as key metric in determining the overall health of the economy.  It will be interesting to see how this all plays out, but the next four to five weeks will likely set the tone for the rest of the year.  However, as we are reminded presently, a hurricane across the Gulf could throw all that out the window.