Driving season
It was a choppy week for oil markets, but as it stands, prices are heading into May with positive momentum. Oil prices recovered back above their respective 20-day moving averages this week despite the ongoing Chinese lock-downs and a very strong US Dollar. On that note, the very restrictive measures in Chinese megacity Shanghai have been in place for more than a month now and have even spread to other key cities.
At the same time, the US Dollar index has soared to multi-decade highs. So considering the world’s largest oil importer is effectively shut-down coupled with the currency pressures, the recent strength in oil is notable. This speaks to the tightness of global oil supplies and the likelihood of further downside in Russian oil production, as the West pushes away Russian imports. It also signals that oil prices may be finding good support ahead of the fast approaching high-demand summer months.
As such, we are viewing the supply-side dynamics as more impactful and long-lasting while the Chinese lock-downs are temporary in nature. Further to that end, the inevitable easing of these strict measures in China could unleash significant pent up demand in the coming weeks and months.
We are also less than five weeks away from the US Memorial Day holiday, which is the unofficial start of the summer driving season in the US. Importantly, it has really been diesel markets that have taken leadership of the petroleum complex in recent weeks as the fundamental story becomes increasingly more bullish for finished fuels.
In fact, spot diesel prices have already soared to all-time highs in many key locations and that comes despite the drop in crude oil prices since the start of the war in Ukraine. On the contrary, diesel prices have charged higher to new highs as shortages develop, and this has led to sharply higher crack spreads and record backwardation in the forward curves.
In our view, the tightness in refined products is likely to persist for months if not years, and any unplanned outages this summer could send gasoline prices soaring with diesel.
Fridays close was 107 a barrel and thats for JULY. UGH!
Truckers need to go to D.C & jam up the city like they did in Canada !!! Park them there !!!
The RUIN AMERICA Market is SOARING !!!!!
Let it go HIGH & see how long it takes for Americans to REVOLT & RIOT !!!!!! All 50 states
Years ago diesel was cheaper than gasoline, as it should be since it is refined less
It is supposed to be Cheaper & so is Kerosine !!!! & ALL should be Cheaper > Get TRUMP Now
Put all progressive Democrats n jail….
to include any on the Eastern Shore
REVOLT is coming in AMERICA all across the Nation !!! People Cannot Afford this Democrat Mess !!!
81 million votes.
42 million REAL ones.
And NOTHING is his fault.
Thank you, DEMOCRATS.
Their incompetence is mind boggling.
Keep cheering.
Biden & Harris could NOT get even ONE Million Legal Votes !!!! Their Big Rallys Proved that !! ( 0 )
got to keep diesel up to keep shipping high to raise product prices
If someone were smart they’d be selling pre-paid debit cards with fixed daily market pricing like a Forever Stamp.