- Oil drops ahead of trade talks as deadline looms
- The WTI prompt-month contract fell $0.21 to $66.99/Bbl Tuesday morning (7:45 AM CT)
- US and EU negotiators are seeking a deal before the August 1 deadline while President Trump has threatened a 30% tariff on most of the bloc’s exports
- Diesel beats out gasoline as the fuel of the summer (Bloomberg)
- As the crude market braces for a potential oversupply later this year, US diesel stockpiles sit at the lowest level since 1996 for the current time of year
- Money managers are now the most seasonally bullish on diesel since 2018 while bullish bets on gasoline are at an eight-year seasonal low
- Heavy sour crude production has been interrupted by Venezuelan sanctions and Canadian wildfires causing refiners to use higher proportions of lighter crude oil yielding less diesel
- Narrow refining margins in late 2024 led refiners to decrease runs, and diesel inventories were never restocked following a cold summer that raised heating demand further depleting fuel supplies heading into Q1
- Jet fuel also made up a record share of US refinery output in 2024 and refiners continue to ramp-up production in 2025, partly at the expense of diesel
- These factors have driven diesel futures up 7% since the start of 2025
- As the crude market braces for a potential oversupply later this year, US diesel stockpiles sit at the lowest level since 1996 for the current time of year
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