Gasoline And Diesel Rally Despite Lower Crude Prices

Refined product prices are rallying Monday, adding to the gains they started during Friday’s abbreviated session, with RBOB gasoline futures up more than 6 cents and ULSD futures up 9.5 cents even though oil prices are ticking modestly lower on the day.

7 remaining members of the OPEC & Friends cartel agreed to continue increasing their oil production targets in August, adding 188mb/day of output to the quotas, although actual production is expected to remain well below those target levels for several months as they recover from the war. The UAE is no longer party to these agreements, and reports suggest they are continuing to increase output beyond what their OPEC quota would have been.

Ukraine is doing its part to try and limit Russia’s oil exports, targeting multiple oil terminals and a refinery near the Baltic sea over the weekend as Russia has been forced to export more oil recently due to the destruction at its refinery network.

RIN values jumped to fresh all-time highs on Thursday, with D6 values trading north of $2.46/RIN, and D4 values going for $2.53. Those lofty values create a cost of nearly 39 cents/gallon ($16/barrel) for refiners and importers subject to the RVO. While most U.S. refiners are having a phenomenal year with crack spreads holding at high levels even net of the increased RVO, the high RIN prices driven by the reality that U.S. renewable production simply can’t reach the 2026 target level set by the EPA, is leading for more calls on the administration to take a mulligan on its targets.

Baker Hughes reported an increase of 5 oil rigs drilling in the U.S. last week, bringing the total count to 445 active rigs, the highest since May of last year. The Primary Vision count of active frack crews in the U.S. also increased by 5 last week to 205, the highest count since April 2025. Baker Hughes’ natural gas rig count increased by 1 last week, but is still 8 rigs shy of the high set in February as it’s widely believed that the increase in oil drilling activity will bring an increase in ancillary natural gas production as well.

The CFTC’s weekly Commitments of Traders report was delayed by the Friday holiday and will be released this afternoon. Since the Brits still don’t celebrate July 4th ICE Europe did release its COT data, showing another decrease in managed money length in Brent crude last week caused by a combination of long liquidations of nearly 12,000 contracts and nearly 23,000 new short positions added. The European ULSD contract saw a very small increase in net length held by the large speculative trade category totaling 1,733 contracts for the week.

While the Atlantic basin remains quiet for named storms, heavy rains are pounding the major metro areas across the North Eastern U.S. to start the week which may add to the holiday hangover effect on fuel demand, but is also likely to disrupt vessel traffic around NY Harbor. Meanwhile, there’s a major hurricane threat named Bavi in the Pacific, which is battering remote islands with 175 mph winds as it takes a path towards Taiwan and mainland China. The good news is that although Guam is seeing major damage from the storm, it did not tip over.

Two of the TCEQ’s frequent fliers reported upsets over the weekend. The 149mb/day P66 Borger TX refinery in the panhandle reported upsets in multiple units Saturday due to inclement weather. It’s not yet clear if any of those units were forced offline during the disruption. Marathon reported a compressor trip at its 630mb/day Galveston Bay (Texas City) refinery Sunday, but that event only lasted an hour and does not appear to have taken any units offline.

Marathon’s 146mb/day Detroit refinery reported flaring due to a power outage Sunday. It’s not yet clear what unit(s) were affected by that upset, but local officials shut down a nearby road as a precaution during that flaring.