Diesel prices take a jump yet again

[jeff9366]

5/31/2021​

Oil scores fifth straight weekly gain as market set to stay undersupplied​

Energy (NYSEARCA:XLE) led the week's S&P sector standings, +8.2%, as U.S. crude oil climbed to its highest level in more than 11 weeks with continued signs of tight fuel inventories as summer driving season begins this Memorial Day weekend.

"You have to assume that things will get worse," S&P Global's Daniel Yergin said this week, as the synchronized run-up in oil, natural gas and coal prices makes the current energy crisis the world's worst since the 1970s oil shocks.

July WTI crude (CL1:COM) posted its fifth straight weekly gain, +4.3% to $115.07/bbl, the best close for a front-month contract since March 11, and the outlook remaining bullish for the near-term.

U.S. natural gas (NG1:COM) jumped 6.5% for the week, its 12th increase in the past 15 weeks, due largely to Europe's stated desire to replace Russian gas flows with LNG from the U.S. or other friendly places.

"The U.S. driving season and strong travel demand should help [oil prices]," UBS analyst Giovanni Staunovo says. "With supply growth lagging demand growth, the oil market is likely to stay undersupplied."

With the average price of regular unleaded gasoline in the U.S. at a record $4.60/gal, the Biden administration is said to be reaching out to oil companies to inquire about restarting shuttered refineries.

More than 1M bbl/day of U.S. oil refining capacity (~5% overall) have shut since the start of the pandemic, and global capacity has shrunk by an additional 2.1M bbl/day, energy consultancy Turner, Mason & Co. estimates.

"The OPEC+ meeting is the key event to watch next week," Oanda's Craig Erlam says, "but even if we get a commitment to increase targets - which is unlikely - that will only likely increase the amount to which they'll fall short of them."

 

[2manyrocks]

I bought on-road diesel for $4.29 and then within a week it jumped to $5.29. Within another two or three days, it was $5.59 in less than two weeks time in Middle Tennessee. Ethanol gas has been more consistent in pricing around $4.28. Nonethanol gas is within a few cents of diesel.

I cut some fields with my Yanmar instead of my bigger tractor. Figure it took half the diesel, but cost extra time.

 

[Hay Dude]

Canada pipeline has zero input to US fuel. It was designed to transport oil to gulf coast for export. And that oil is still going there by rail. It was to reduce transport costs for Canadian oil companies and had very little benefit to the US.

CNN/White House talking points.

Rail pollutes more than pipelines. Railroads require diesel fuel to run. Pipelines do not
When you say it has “zero input to US fuel”, what if with the 900,000 barrels it produces, a refinery was built to refine the oil it makes right along the pipeline?
Ever consider that would happen?

 

[jyoutz]

CNN/White House talking points.

Rail pollutes more than pipelines. Railroads require diesel fuel to run. Pipelines do not
When you say it has “zero input to US fuel”, what if with the 900,000 barrels it produces, a refinery was built to refine the oil it makes right along the pipeline?
Ever consider that would happen?

It is destined for export. No US refinery is capable of processing that oil and even though that oil has been exported for years from the US gulf coast, no US company has built a refinery capable of processing that low grade oil, nor has any company indicated that this is planned. It’s not really a factor in US fuel. US refineries have access to much higher grade US produced crude oil. A fabricated issue.

 

[rScotty]

Filled up most of our machines with fuel this weekend. Prices are higher, but not as bad as expected. If I can believe the internet, the USA still stacks up pretty well when compared against other places in the world to live and work.
rScotty

 

[oldballs]

Where'ss that info been ever since that pipeline was cancelled? Seems like some important facts that people and politians could make judgements on. Seems like one of the political parties could have mentioned it....versus learning about it on TBN????

 

[LouNY]

It has been discussed a bit in some smaller articles. There was also talk of possibly running a parallel line so the Dakota oils could be brought down less expensively. And the original could have been easily modified to accept other inputs then the Canadian oil. It's quite common to use pigs to separate products in pipelines.
It's the heavy crude out of the oil sands in Canada, and destined for over seas refineries as ours can't economically refine it for use in this country.
All of our refineries prefer sweet crude as it's easier to refine with less emission controls on the refinery. Even the sour crude out of the Permian basin (Texas, New Mexico) is more costly to refine for use in this country, because of the fuel formulation rules.

 

[DMW]

Canada pipeline has zero input to US fuel. It was designed to transport oil to gulf coast for export. And that oil is still going there by rail. It was to reduce transport costs for Canadian oil companies and had very little benefit to the US.

Lower cost oil to the gulf would mean more supply/competition. Good for consumers, not as good for profits of big oil.

 

[jyoutz]

Lower cost oil to the gulf would mean more supply/competition. Good for consumers, not as good for profits of big oil.

Yes, but the Canadian tar sand oil isn’t something that the fuel refineries want to use. Maybe it’s only suitable for low grade products? All I know is the refineries say it’s unusable for their operations. The Canadians don’t want that oil either; that’s why they aren’t refining it.

 

[jyoutz]

Where'ss that info been ever since that pipeline was cancelled? Seems like some important facts that people and politians could make judgements on. Seems like one of the political parties could have mentioned it....versus learning about it on TBN????

They know exactly what the facts are; but of course never miss an opportunity for political theater. Paul Ryan said recently in an interview that members of congress have become entertainers, not policy makers. I think he’s correct.