🛢️ Today’s Market News – Fuel & Oil Update for the Upper Midwest
🇷🇺 Russia’s Oil Revenues Take a Hit
Russia’s income from oil and gas dropped 35% in May compared to last year and over 50% from April. That’s a big blow to its economy, which relies heavily on energy sales to fund its government and military efforts in Ukraine.
Why the drop?
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Lower global oil prices
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Ongoing sanctions limiting who can buy Russian oil
Russia is now tightening its budget and pushing for higher oil prices by opposing recent OPEC+ production increases. They’re hoping to sell less oil at higher prices to balance their books.
🛠️ Oil Companies Slow Down Operations
The Federal Reserve’s latest report shows oil producers are slowing down and cutting spending for the rest of the year.
Why?
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Costs are rising, partly due to tariffs
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Prices are falling, making it harder to turn a profit
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Companies are sticking to lower-cost drilling areas like the Permian Basin
Even though U.S. oil demand is steady, overall activity is cooling off—especially as the economy shows signs of slowing in other areas like manufacturing.
📦 Inventory Snapshot: Crude Down, Gas & Diesel Up
Here’s a quick look at last week’s U.S. fuel supply changes:
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Crude oil stockpiles dropped by 4.3 million barrels as refineries kicked into high gear—93.4% utilization—preparing for the summer driving season.
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But surprisingly, gasoline and diesel inventories rose sharply:
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Gasoline: +5.2 million barrels
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Diesel: +4.2 million barrels
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What’s going on?
Post-Memorial Day demand was weaker than expected, so the fuel wasn’t used up as fast as anticipated. This caused prices to dip, with WTI crude settling around $63.40.
📉 Market Overview: Oil Prices Steady but Under Pressure
After dropping about 1% Wednesday, oil prices leveled off on Thursday. Here’s what’s keeping things in check:
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Saudi Arabia is cutting prices for July deliveries to Asia
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U.S. fuel demand looks soft
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OPEC+ may add more supply soon
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Wildfires in Canada and global tensions (like Russia/Iran) are offering support
Traders are watching economic signals and trade updates for where prices may head next.
🌿 Renewable Diesel & Biodiesel Output Falls
Production of renewable diesel and biodiesel took a hit in the first part of 2025. Here’s why:
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Uncertainty over new federal tax credit rules
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Poor profit margins despite recent capacity growth
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Some facilities are idling operations while waiting for clear guidance
Key players like Phillips 66 and Diamond Green Diesel reported losses, and the biodiesel output in January was the lowest since 2015.
While things may pick back up later in the year to meet federal blending targets, 2025 is expected to end with 15% less biodiesel output than 2024.
📞 Questions about how this affects your diesel pricing or harvest season planning? Contact your account manager today—we’re here to help.
