Arctic Blast Could Wreak Havoc on the Petroleum Industry

By: Mike Dombroski / December 1, 2017

While temperatures are going to remain above average for another week, we’re going to get hit with an “arctic blast” December 8th that could last until Christmas. From an operational perspective, truck fleets’ operability is at risk if their fuel is not additized before the cold weather approaches. From a market perspective, with distillate inventories already tight and relatively few heating oil shippers posting prices at petroleum terminals, demand could outweigh supply.

 

NOAA 8-14 day outlook

 

 The NOAA 8-14 weather outlook graphic above is one of the most reputable in the business. It shows that the Eastern United States has a very high probability of temperatures below normal over the next two weeks. This is a snapshot of what traders look at, but the devil is in the details here. Below is a breakdown of temperatures we follow in Washington, PA (just Southeast of Pittsburgh). Beginning Friday 12/8/2017, we will see a stretch of daily low temperatures trending in the teens for two weeks.

 

Washington 3 week forecast 12-1-17

 

Risks that can occur when the temperature drops; diesel fuel gelling can form if it is not additized. We strongly encourage diesel fuel engines and storage tanks add winter additive to improve functionality and operability. It will be extremely important to have additized fuel in fleet tanks BEFORE the cold weather hits next week to make sure their diesel trucks operate smoothly.

Heating oil will be in high demand from wholesalers, power/utility companies, auxiliary units that operate on heating oil when spot natural gas gets too expensive, etc. The demand could boost the basis cost of providing heating oil and even possibly run racks dry because shipments cannot get to petroleum terminals fast enough.

Contact Guttman Energy to learn more to assure safe operability of your fleet and how to protect yourself from a boost in basis prices.

 

dec 1

 


Mike Dombroski

Written by

Mike Dombroski


Guttman Energy Daily Market Update Disclaimer – The information contained in this market update is derived from sources believed to be reliable; however this update could include technical inaccuracies or typographical errors and Guttman Energy does not guarantee the accuracy, completeness or reliability of this update. FURTHERMORE, THIS UPDATE IS PROVIDED "AS IS," WHERE IS, WITH ALL FAULTS AND WITHOUT ANY WARRANTY OR CONDITION OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY. GUTTMAN ENERGY ALSO SPECIFICALLY DISCLAIMS ALL EXPRESS AND IMPLIED WARRANTIES. YOU USE THIS UPDATE AT YOUR SOLE RISK. This update and any view or comment expressed herein are provided for informational purposes only and should not be interpreted in any way as recommendation or inducement to buy or sell products, commodity futures or options contracts.


Comments

Subscribe to our blog

Price Feed

Stay up-to-date on current fuel prices and market trends with our NYMEX price feed (15 minute delay to the live market).

© 2018 Market data provided and hosted by Barchart Market Data Solutions. Fundamental company data provided by Morningstar and Zacks Investment Research. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see disclaimer.

Categories

Contact Us