Midwest Kerosene Shortage impacts Diesel Users
Oil prices are ebbing lower this morning after strong price activity yesterday. Markets appear to be taking profits off the table once again, as those who bought the dip earlier this week exit the market. Crude oil is currently trading at $56.28, down 94 cents (-1.6%) from yesterday’s close.
Fuel prices are losing steam, with diesel prices dipping below $2/gal. Diesel is trading at $1.9953, down 3.2 cents (-1.6%). Gasoline prices are $1.7290, down 2.3 cents (-1.3%).
Oil producers around the world are signaling their compliance with agreed upon cuts. Nigeria stated that production is “basically” in line with committed levels, which suggests cuts of 100 kbpd from January levels. Canada has actually raised its Alberta production limit again by 25 kbpd, allowing more Canadian crude to reach the US.
The US and China appear to be on the cusp of signing a trade deal, which would provide significant relief after months of concerns about growth in the two largest economies in the world. Larry Kudlow, Trump’s Economic Council, said we are “headed towards a remarkable historic deal”, though the details have not yet been announced. Markets have yet to see whether the deal will impact past tariffs put in place by both nations, or will merely stave off future escalations.
In more bearish news, the US government yesterday announced plans to release 6 million barrels of oil from the Strategic Petroleum Reserve to offset lost oil from Venezuela. Markets seemed to shrug off the news though, in light of the 8 million barrel draw seen on inventories this past week.
Midwest Kerosene Shortage
Diesel users in the Midwest, from Nebraska up to Minnesota, are facing a shortage of kerosene at several terminals caused by high demand. Last night temperatures fell as low as 3 degrees in some northern states, and temperature will drop to the negatives over the weekend and early next week. If you have questions about the impact of this outage, please contact your Mansfield representative for information about protecting your fleet from cold winter weather.
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