Diesel Trades at Record Premium to Crude Oil, With Upcoming Maintenance Offering Continued Support
Minneapolis, MN | September 19, 2023 | By: Steve Sinos, Blue Lacy Advisors, LLC
Diesel Prices Rally into Maintenance
Since bottoming at $2.23/gal in May, Prompt NYMEX ULSD (HO) has rallied ~$1.07 to end the week at $3.30, following crude in making 2023 highs. That puts it at about 65% of the post-invasion high of $5.135.
Reclaiming that high seems unlikely, especially considering the steep backwardation between the October/November and the December/January contracts. December and January are trading ~20 cents behind October and November. The most active options contract for the balance of the year this week was the December $3.40 call, attracting 500 contracts of length on Friday, offsetting a market that otherwise saw the liquidation of long delta positions.
*This summary is based off September 10, 2023
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Meet the Author!
Steve has spent his career in strategy, risk, trading, and investment. He works with investors to source investments in opportunistic or high growth sectors, with particular interest in early-stage companies solving clearly defined problems.
He is currently a Managing Partner with Blue Lacy Advisors LLC, giving management teams and investors confidence in their decision making by supporting strategic planning and execution, risk management, commodity trading, and market analysis.
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