Supply Chain Optimization

Diesel prices fall...what's up? - T | WO

Written by Tom Moore | Dec 11, 2018 12:00:00 AM
Why is the price of diesel still falling when crude oil is actually going up?  Here is my list of answers:
  • When prices are declining, there is a long lag between crude costs falling and diesel matching.  When prices are rising, there is no lag.  (Up like a rocket – down like a feather)
  • The U.S. became a net exporter of oil and oil products for the first time since at least 1973 (Source:  Energy Information Administration)
  • OPEC and Russia cut production by 1.2 MM barrels per day
  • [Program (computerized) trading] is modifying volume and liquidity,” said the Chief Investment Officer of Arctic Blue Capital Ltd. “What would have happened in one week is happening in one day.”
  • Prices are down while volatility is up – see the accompanying graphs from the Wall Street Journal
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