Seasonal Divergence In Demand For Refined Products

Gasoline prices are moving modestly lower for a 2nd straight day, while diesel contracts are holding near multi-year highs as the seasonal divergence in demand for the refined products seems to be influencing prices again.

RINs have been the big mover this week with D6 ethanol values dropping to a 6 month low after reports that the blending quotas may have been leaked. Insert your own Trading Places joke here. 

Nicholas has stalled out over Louisiana, dumping heavy rains on areas of the Gulf Coast still trying to recover from Ida, 3 new potential storms are lurking in the Atlantic. The first is given 70% odds of developing over the next 5 days, and may brush the coast of North Carolina as it moves North East, and should avoid a direct landfall. The 2nd is also given high odds of developing and could be a threat to the East Coast next week. The third has low odds of formation as we move through the halfway point of another busy hurricane season. 

Today’s interesting reads: Why Chevron’s CEO sees tight supplies and higher prices for petroleum products persisting, and why a spike in natural gas prices is having widespread effects on various supply chains, particularly across Europe. The EIA this morning reported that the US barely held on to its status as a net exporter of petroleum products in the first half of 2021. With Europe scrambling to find new power supply options, and natural gas suddenly a hot commodity again, US producers are faced with an increasingly unpopular but increasingly profitable decision to boost production levels. 

Speaking of unpopular: The President suggested that “Bad Actors” are behind the rise in gasoline prices this year, a claim the AP (along with just about everyone in the industry) finds to be baseless. 

Click here to download a PDF of today's TACenergy Market Talk.