Diesel Futures Up Following Winter Storms

It’s a mixed bag this morning as headlines attribute any movement higher or lower to the uncertainty surrounding the President’s tariff plan. As of now diesel futures are up about 3.5 cents per gallon followed by WTI crude oil at 34 cents per barrel (.0081 $/gal equivalent) while gasoline drifts lower, trading down 45 points to start the day.
Wildfires are raging again in the Los Angeles area, burning another 23,000 acres. As of now the blazes are not threatening energy infrastructure, which is little comfort to the local population scrambling to protect themselves against increased air pollution. The EIA’s map tracking the disaster is below; refineries are marked with squares, fuel terminals with triangles.
Marine ports in Texas and New Orleans have reopened following winter storm Enzo’s frigid conditions. As of now there doesn’t seem to be any long-term/substantial disruptions to refineries along the Gulf Coast, with only a couple plants experiencing hiccups.
Notes on yesterday’s DOE report:
Crude posted a 1mm barrel draw, despite signs pointing towards a build, the big drop in its adjustment notwithstanding. Oil imports outweighed exports while demand and refinery runs both showed large drops.
Winter maintenance may finally be showing up in refinery runs since Enzo didn’t hit until after this report. Can’t decide whether that’s good or bad timing? Almost a 7% drop week to week with PADD 3 slowing down by nearly 1mm barrels per day and PADD 5 showing a sizeable drop too. The corresponding change in utilization rates, which have held above 90% since the beginning of November, drops the total to just below 86%.
Diesel stocks dropped across the country. Production slowed alongside increased demand and export activity. Inventories are mixed relative to their 5-year averages across PADDs and are running just under 2024 in total so far this year.
Gas stocks are on week 10 of consecutive builds. Mostly due to dwindling demand, partly due to a drop in imports. Large increases in PADDs 2 & 3 offset the drop in PADD 1. PADD 1 started the year stronger than the previous two, hitting the average line two weeks ago, but fell between them last week to the lower end of the range. PADD 2 looks to be in their beginning of year ramp up phase at above average levels, but well short of 2024 which set the top end of the range for January. Similar story with PADD 3 except it moved above the same week last year and is sitting comfortably between average and a 5-year high.
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Energy Markets Hovering At Break Even Levels After 2 Days Of Strong Gains

Week 26 - US DOE Inventory Recap
