Diesel Prices Lead Energy Futures Higher On Geopolitical Optimism

Diesel prices are leading energy futures higher this morning, exchanging hands over 1% higher than yesterday’s settlement in this morning’s pre-market trading session. The American crude oil benchmark is up nearly 30 cents per barrel this morning, but is slated for a loss on the week, should it settle near current values. Optimism surrounding a possible meeting between Trump and Putin in the UAE next week has the market hopeful for a de-escalation in geopolitical tensions.

Tropical depression Dexter finally dissipated over the middle of the Atlantic last night. The current forecast for the system brewing about halfway between the Lesser Antilles and Cabo Verde has its path hooking northward, steering clear of the United States’ eastern seaboard, and potential impacts to American energy infrastructure.

Ample gulf coast gasoline supplies and below-average gasoline stocks in the New York market (both of which are visible in yesterday’s suite of DOE charts) have shipping premiums on Colonial’s main gasoline line climbing into positive territory for the first time in 3 months. Distillate inventories remain near their seasonal 5-year lows in both PADDs 1 and 3, keeping linespace values at a discount to shipping costs on Colonial’s line 2.