Weekly Snapshot

By Published On: April 25, 2018Categories: Crude, Diesel, Gasoline

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EPA Announces $40 MM Funding for Diesel Fleet Modernization

Yesterday the Environmental Protection Agency announced the availability of $40 million in funding for reducing diesel engine emissions. Fleets in areas with poorer air quality will receive priority status. The funding is primarily available to state, local, and tribal agencies as well as port authorities.

Commodities Lead Asset Classes in 2018

Commodities, led by oil and the metals used for renewable energy, have enjoyed 22.7% gains this year, outperforming all other major asset classes. This is the first time commodities have led among asset classes since 2000 and 2002, at the beginning of the last commodity “super cycle” that saw oil prices soar from $30/bbl to $140/bbl, and back down. Are we at the beginning of an oil price “super cycle”? Click Here to read more from Visual Capitalist (article submitted by Will Shinn).

Global Assets Could Benefit from Rising Oil Prices

As oil prices rise, more U.S. dollars are making their way to producing nations such as the Middle East and Africa. Virtually all oil in the world is priced in U.S. dollars. As more dollars make their way into the world, oil sellers must find ways to invest those dollars. Generally, those dollars get invested back into U.S. dollar-denominated investments such as equities and bonds. As central banks are tightening their balance sheets, higher oil prices are creating liquidity for producing countries that could help keep the economy running smoothly.

US Shale Oil Is Too Light

According to investment bank Morgan Stanley, shale oil being produced in Texas and elsewhere is too light for refineries to process. In the past, light crudes (such as WTI) traded at a premium to heavier crudes, but that may change in the future. Light crudes have smaller carbon chains, and are ideal for producing gasoline and other lighter materials. Heaver crudes are optimal for diesel production. Since most oil forecasts predict rising diesel demand and relatively flat gasoline demand, the trend could cause some market imbalances requiring new trading patterns.

This article is part of Crude


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The information contained herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Furthermore, no responsibility is assumed for use of this material and no express or implied warranties or guarantees are made. This material and any view or comment expressed herein are provided for informational purposes only and should not be construed in any way as an inducement or recommendation to buy or sell products, commodity futures or options contracts.

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