Wednesday Saw The Largest Single Day Increase In The 40+ Year History Of The HO Futures Contract

Wednesday saw the largest single day increase in the 40+ year history of the HO futures contract.  The top 10 single day increases are listed below.

So, what does the contract do the day after rallying 35 cents?  In this case, it rallied another 35 cents overnight spiking to $3.84, which marked a $1/gallon increase from where prices were last Friday, only to pull back by 33 cents to trade up only 2 cents on the day as of 7:37 central.  By the time you read this it will probably have moved another dime in one way or another. 

RBOB futures weren’t quite as dramatic as ULSD, “only” rallying 22 cents on the day, but they did come within 11 cents of reaching their all-time high overnight, meaning record high retail prices are coming just in time for driving season and there will be no shortage of news stories asking experts what they think prices will do next while they fill up their tanks.

The DOE released its weekly status report Wednesday, and pretty much nobody cared.  Perhaps most noteworthy from the report is that the coastal markets were already tight, and the inland PADDs were long heading into this week, and the fallout from the war in Ukraine will only make that phenomenon more pronounced.  This has opened huge arbitrage windows to truck fuel from inland markets to the coast, with the problem being that still requires drivers to operate those trucks.  Charts are below. 

Click here to download a PDF of today's TACenergy Market Talk, including all charts from the Weekly DOE Report.