Energy Futures Are Taking a Breather Friday Morning After Another Rally Thursday Pushed Gasoline Prices To A Fresh 6 Month High

Energy futures are taking a breather Friday morning after another rally Thursday pushed gasoline prices to a fresh 6 month high, while crude oil prices reached their highest since early November. Diesel prices are trying to drag the complex lower this morning, and continue to look the weakest on the charts, but the momentum overall seems to be favoring higher prices as we move into spring.

It’s been a good week for many US refiners, with PBF, Marathon, P66 and Valero stock prices all reaching record highs, even though the current margin environment is a far cry from the levels they enjoyed for most of 2022 and 2023. It seems that a few macro factors are feeding the equity strength: The 3 Russian refineries hit by drones this week, and various shipping disruptions around the Red Sea, and now perhaps the Indian Ocean, are a reminder of the world’s limitations, even when crude oil is ample. There’s also the sense that reality is sinking in that the energy transition is going to take much longer than many hoped just a few short years ago.

Ethanol and RIN prices continue their recovery rallies this week, with D4 and D6 RINs reaching their highest in 2 months at 57 cents/RIN, but are still down about 20 cents so far in 2024, and roughly $1/RIN from this time last year. A government investigation into improper accounting at ADM is now reportedly focused on the company’s ethanol trading, although it seems like whatever happened was in prior years and probably not contributing to the price swings this week.