• Supply
  • Social Media
VisitTAC - The Arnold Companies
Customer LOGIN

ULSD And RBOB Took Out Another Layer Of Technical Resistance In Tuesday’s Session

Wednesday, Jan 12 2022
Market Talk

So much for the sideways pattern. ULSD and RBOB took out another layer of technical resistance in Tuesday’s session, and made short work of following through to their next targets with 10 cent gains in the past 24 hours. Just a few days after making a run at $2.50, diesel prices are now less than a penny away from reaching a new 7 year high at $2.6080, with another big move higher looking possible if that resistance can also be taken out.  

Besides the technical strength, it appears that diesel prices are also getting a boost from winter storms hitting the East Coast, based on the strength in calendar spreads and natural gas prices in the past few days. That should provide some sense of relief to those hurt by high diesel prices that this won’t last for an extended period of time, but is also a sign that near prompt prices could see a severe spike if another polar vortex arrives, which could fulfill the technical targets closer to the $2.80 range. Short term indicators are also moving into overbought territory, so there should be a swift correction once this latest surge subsides.

So far the market continues to be able to shrug off some bearish fundamental indicators for both refined products as the API reported another huge build in gasoline inventories last week of nearly 11 million barrels, while distillates added another 3 million barrels. The DOE’s weekly report is due out at its normal time this morning, and based on the API and anecdotal evidence from fuel suppliers around the country, more large builds seem likely as last week marked the traditional trough of the winter demand doldrums. 

You can also see signs of that weak demand in Midwestern basis markets that have seen diffs plummet over the past two weeks as those regions slog through their annual January temperature and demand freeze.  In these cases, the strength we’re seeing in calendar spreads tends to push basis spreads even lower as cash markets will need to offset the relative increase in futures to attract incremental buyers. Rack markets around the country are also showing signs of capitulation with several major markets that were showing large premiums to their local spot market now offering discounts as suppliers appear to have forgotten (again) what happens in January every year. (see the charts below)

Reminder that Monday is MLK Jr. day, and while futures will trade throughout the day, there will not be a settlement posted for NYMEX contracts, and spot markets won’t be assessed, so most prices posted Friday night will carry through Tuesday.

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

News & ViewsMarket Talk

News & Views
Latest Posts

KTBS 3 Spotlight on TACenergy Leadership COO Fred Sloan - Sharing Thoughts on Changes in the Gas Market
Go Rentals Opens 10 New Locations with Partner, TAC Air
Tac Air's new facility features B17-G model airplane, Military Situation Room
TAC Air B-17G Model Brings Nostalgia and Tears

News & Views

Market Talk
Latest Posts

Market Talk

TACenergy logo
Sales:  800-375-FUELSupply & Logistics:  800-808-6500

Get in Touch

Sign up to receive market talk updates in your inbox each day.
Establish a credit account.
Apply For Credit
Need to make a fuel order today?

Follow us

  • Supply
  • News & Views
  • Market Talk Updates
  • Social Media
  • Contact a Representative
  • Customer Login
  • Apply For Credit
Find Your Next Great Role With TACenergy.
Explore Careers
  • Privacy Policy
  • Terms of Use
  • Employee Login
  • Sitemap
TACenergy, LLC © 2022. All Rights Reserved.