March Breakthrough Advisor Preview | Disconnected Price Dynamics

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As we head into March, the Applied Knowledge team addresses diesel price volatility and market dynamics in a relatively sedate month of news headlines. While major disruptive events were absent, price volatility was high.

Disconnected Retail and Wholesale Pricing

Shippers reimbursing fuel costs using a DOE Index did not experience the growing separation, or spread, between wholesale and retail prices that shippers on Fuel Recovery care about. What is causing this volatility, and what do higher spreads mean for supply chain strategies?

OPEC vs. US Production

The Energy Information Administration (EIA) announced that US oil production DeDsurpassed 10mmbpd ahead of expectations. This is the first time US production exceeded 10 mmbpd since the 1970s.

Conversely, Saudi Arabia announced they will make further cuts in the coming months, upholding OPEC agreements to reduce crude oil production as an organization. The crude oil powerhouse will decrease production by an additional 100,000bpd in 2018. How does the relationship between OPEC and US production change the market and outlook for diesel?

Mild Weather Weakens Geographic Volatility

February brought unseasonably mild weather for much of the country, which alleviated price premiums in geographies that tend to see winter weather related price seasonality.  Which region experienced the most diesel price relief?  Check out the March Advisor to find out.

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