Diesel Suppliers Stand to Lose If Biden Wish to Stock Up Is Granted
- Diesel spread signals sell now to avoid losses from storage
- East Coast stockpiles lowest seasonally for this time of year
This article is for subscribers only.
Fuel markets are signaling to suppliers that they should avoid holding on to products at all costs, despite the Biden administration’s willingness to consider banning exports as an extreme measure to help build stockpiles.
Diesel futures trading in New York have shifted into the widest backwardation in five months -- meaning next-month deliveries are priced at a discount to prompt. In such a market structure, suppliers risk losing 27 cents for each gallon of diesel they hold by the end of the month, compared with less than 1 cent at the same time last year.