Comment as of: 12-5-24

Diesel fuel contracts of 42,000 gallons delivered to New York Harbor destinations remain in a broken, slightly negative pattern since the September’24 highs around $2.41 per gallon. Threats to Middle East oil and fuel production have not proven out, allowing some of the risk premium to be drained. The Straits of Hormuz, a long familiar and essential global energy shipping “choke point” remain open and operating. Demand for gasoline and Diesel has softened with economic slowdown in China, while supply has expanded. (See graphic below) Crude oil is 50% of the diesel price, the balance is refining, transport, and taxes. As an economic canary similar to copper prices, the current implication of lower fuel prices is global economic slowing.