Diesel Futures Are Trying To Lead The Energy Complex In Another Rally Friday

Diesel futures are trying to lead the energy complex in another rally Friday after failing to sustain early gains in Thursday’s session. Volumes remain muted in the “lost week” between Christmas and New Years, and the technical outlook remains murky, suggesting more back and forth action as we move into 2025.

The Ukraine war had become a bit of an afterthought in energy markets this year as global supply networks have adjusted to the changing flows of Russian exports, and stagnate demand has tempered concerns of shortages that dominated the news in 2022. That said, the tensions seem to be coming back to the forefront this week with numerous events that could have impacts on supply flows next year.

After Russia’s shadow fleet of oil tankers suffered multiple casualties to storms in the black sea last week, another one of Russia’s oil tankers was seized by Finnish officials who accused the vessel of carrying out sabotage on undersea internet and cable lines. The expiration of the agreement to send Russian natural gas to Europe via Ukraine is another hot button issue, and Ukraine is making sure its voice is heard at the negotiation table by knocking out power to a Russian oil pipeline pumping station overnight.

After reporting 3 unplanned upsets in as many days at their Carson (LA-area) refinery, Marathon notified regulators that it would begin a week’s worth of planned flaring, presumably to perform repairs on units knocked offline. Energy news is reporting that one of the refinery’s crude units was taken down earlier in the week. That news helped boost CARBOB differentials in LA and San Francisco Thursday, but the moves appeared to be muted by the onset of the slowest demand weeks of the year.

Did you have a hard time getting back to work Thursday? You weren’t alone. The DOE further delayed the release of its weekly status report from until 1pm eastern today, breaking the traditional holiday release schedule. No reason for the delay was cited, but you could speculate that eggnog was involved.

The Dallas Fed released its Texas Business Outlook survey for November this week, showing continued volatility in job growth as the housing and energy markets both have stagnated, but plenty of optimism for the future as interest rates come down.