We begin with a note from Flashpoint’s Darius Lechtenberger, discussing some bearish aspects relative to geopolitical sentiment: “The bearish sentiment is coming from the fact that China and Iran continue to buy oil from Russia at discounted prices, a new U.S./Iran nuclear deal appears close to being finalized and China has reported a surge in COVID-19 cases and has implemented lockdowns and restrictions. Also, don’t forget the Fed’s plan to continue to raise interest rates…also bearish. All this bearishness is barely holding energy prices in check.”
WTI prices closed at $112.12 yesterday, but are trading south of $111 right now.
This item from Bloomberg sheds light on a problem ahead. The title of the item is ‘The Oil Price Rally is Bad. The Diesel Crisis is Far Worse”. This, from the linked item: “Oil benchmarks Brent and West Texas Intermediate tend to grab the attention of financial markets. However, regular consumers — households and businesses — don’t buy crude; they purchase refined petroleum products such as diesel and gasoline. Now, there isn’t much diesel to buy. That’s a big problem. Diesel is the workhorse of the global economy. It keeps trucks and vans, excavators and heavy machinery, freight trains and ships all buzzing. Wholesale and retail diesel prices surged last week to an all-time high, surpassing the peak set in 2008…The surge matters because of the ubiquity of diesel in modern life. As the fuel of transportation, the price rally will hit everyone, adding to inflationary pressures that are already running at a multi-decade high. More than the cost of oil, skyrocketing diesel prices should be the main worry of central banks.”
The entire item is worthy of your time…diesel costs are going to push up what you pay for propane and what you charge for propane. Current Fuel Service Charges from trucking companies relative to propane are at all time highs.
