May Trading Ended With Some Fireworks As Refined Products Saw 20 Cent Price Swings In Tuesday’s Session

May trading ended with some fireworks as refined products saw 20 cent price swings in Tuesday’s session, and June is starting off with double digit gains pushing some gasoline prices to fresh all-time highs this morning.  

The partial embargo of Russian Oil announced by the EU, and subsequent retaliation from Russian energy companies, had prices soaring for most of Tuesday’s session, only to see a sharp pullback in the afternoon following reports that OPEC may exempt Russia from their output agreement, which would pave the way for the very limited amount of spare capacity globally to come back online without undermining the cartel.

Read here to see how Russia is evading sanctions by shipping more oil to Asia, how that’s disrupting the tanker market, and why the EU’s insurance sanctions may matter more than the oil embargo itself.

Last, if you’re still scratching your head as to why prices continue to push north of $4 even as clear signs of demand slowing are appearing, read this note on why refiners are simply unable to keep up.

The best cure for high prices is high prices: New York harbor diesel prices started May trading $1/gallon or more above most other US markets, but ended the month trading near the low end of the regional range as the insane backwardation that had kept some shippers on the sidelines melted away and encouraged more barrels to move up the Colonial pipeline. For markets across the south eastern US, the question now is whether or not regional diesel supplies will recover in similar fashion over the next week or two now that the regional spreads have come back inline.

Click here to download a PDF of today's TACenergy Market Talk.