For the first time since the beginning of February, the price of oil ended the week down. The situation is different for the price of diesel, which was up 6% in Friday's session.
- The crude decline reflects an increase of 7.7 million barrels of crude oil inventories in North America. Total inventories now total 425.6 million barrels, the highest level since 1982, when the EIA began compiling data. Nevertheless, the weekly increase was below market expectations, which likely reduced the impact of the news. It is certain that we will closely monitor the evolution of inventories in the coming weeks.
- The very cold temperatures recorded in recent weeks had a significant impact on diesel inventories and heating oil. Weather and refinery issues explain the surge in prices over the past few days. Note that this effect was only felt on the current month contract while fixed prices on the NY ULSD for a term of 12 months remained relatively stable during the last week.
- Despite the rebound in February, the fixed price for a term of 12 months on the diesel market traded on the NYMEX remains at its lowest level since the fall of 2010. We believe that it remains attractive for companies wishing to have protection in place.
Good week.
Emmanuel Tessier-Fleury