Diesel Fuel Creeps Higher

On December 26th NYMEX low traded at $1.6205 per gallon. Since then, the price has moved higher to $0.27 per gallon moving ever closer to the $2.00 mark.

If you’re an end user or transportation company who cannot fuel surcharge and has a fuel budget you may want to cover some or all of your future requirements under that $2.00 number, not risking more price exposure as there are issues unfolding that could drive diesel prices higher.

Here’s a few worth watching:

  • VENEZUELA Oil Sanctions; Venezuela supplies crude oil to the U.S. Gulf Coast refineries where they are used to run distillate oils. U.S. refiners will not be able to complete transactions for shipments of crude from Venezuela’s PDVSA (Petróleos de Venezuela, S.A) for cargoes they had contracted before the U.S. Treasury slapped sanctions on the Venezuelan state oil firm, Bloomberg reports.
  • While OPEC could pick up the heavy oil shortfall Saudi oil minister Khalid al-Falih said this week that Saudi Arabia would lower its oil production to 10.1 million barrels per day (mb/d) in February and keep it at that level for the duration of the six-month OPEC+ deal.
  • U.S. CHINA Trade Talks; President Trump suggested there would be further efforts made to resolve the trade conflict with China, “leaving NOTHING unresolved on the table,” Trump said in a recent tweet.
  • The EIA reported a 2.3 million barrel distillate stock draw today. We see strong demand for heating oil and diesel fuel for power generation.

Don’t get caught short. Develop a strategy that helps manage future price risk.

Written by:

As Director of Marketing for Guttman Holdings, I lead our advertising, digital marketing, branding, and public relations strategies, and share my expertise to communicate key messaging to all our stakeholders. With my diversified leadership background, I also drive innovation and cutting-edge business practice and results, to generate interest in Guttman Energy, Guttman Renewables, and Source One service offerings.

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