Japan’s Nikkei Exchange Bounced Sharply Higher Tuesday

The energy complex is drifting lower this morning, with prompt month gasoline, diesel, and crude oil futures all trading ~.5% lower to start the day. Petroleum futures started the week trading in sympathy with the global rout in equities markets but has since bounced of multi-month lows.

A reminder that we are still awaiting Iran’s promised retaliation to Israel’s assassination of a Hamas leader in Iran likely helped stem yesterday’s losses. Unfortunately, that reminder came in the form of a rocket attack on a military base in Iraq, in which 5 Americans were injured. As of now it’s unclear if the attack was directly related to the anticipated Israel-Iran, but it is indicative of the sustained tensions in the area.

Maybe it isn’t as bad as we thought? After having the worst day of trading since 1987’s Black Monday, Japan’s Nikkei exchange bounced sharply higher Tuesday, setting a new record for single-day index points gained. US equity futures are pointing slightly higher in pre-market trading.

Tropical Storm Debby continues to churn along the Southern East Coast dumping nearly 8” of rain in the Savannah area and 6” around Charleston. While millions of residents in North and South Carolina are now under tornado watch through late afternoon, the latest storm in this year’s busier-than-average season has, so far, had little effect on energy markets.

Th EIA published a note this morning highlighting the increase in Renewable Diesel imports across the first five months of 2024, with the vast majority of the product landing along the West Coast, where the economic incentives are greatest nationwide. This of course is not news to, nor any solace for, the several refiners that have reported a drop in RD margins and those that have since paused their plant conversions, hoping to increase RD and SAF production.