The end of crude shortages in Libya and Canada, a forecast for the International Maritime Organization (IMO) 2020 Sulfur Compliance, and mid-year diesel fuel tax updates – find this and more in our latest Advisor Brief and on our blog.

1. North American Fuel Markets
August 2018

2. 284.66¢/gallon
Wholesale Average
0.10¢ below the prior month’s average.
July Price History
323.33¢/gallon
DOE Index
2.46¢ below the prior month’s average.
38.67¢/gallon
DOE Wholesale Spread
2.36¢ below the prior month’s average.

3. Crude Oil Outages in Libya
and Canada Ended Sooner
Than Expected
As a result, prices tumbled nearly 11.0¢
per gallon on July 12. Conflict at Libya’s
oil fields and ports continues to add
geographical risk to the oil industry.

4. US Production Surpassed
11.0 Million Barrels Per Day
(mmbd) in July
The US is the second largest oil producer
behind Russia, who produced 11.2
mmbd in July. The DOE predicts US crude
production will average 11.8 mmbd and
reach 12.0 mmbd in 2019.

5. IMO 2020 Sulfur Regulations –
Forecast & Outlook Update
We continue to expect market fundamentals
will maintain near-term prices that are elevated
from the beginning of 2018 with risk events
bringing volatility into the market.
Our current expectations for the International
Maritime Organization’s low-sulfur fuel mandate
lead us to believe there will be upward pressure
on diesel prices during the final quarter of 2019
and into 2020, as demand for low-sulfur fuel will
grow substantially.

6. Variance by Geography
National average wholesale prices remained stable through July, aside from the Pacific Northwest and portions of the
Mountain region, as 39 of 48 states fell within 4.0¢/gallon of the national average movement of -0.10¢. Oklahoma was
the only state outside of these geographies that experienced price movements beyond the 4.0¢ threshold as their 6.0¢/
gallon increase was attributed to an adjustment in the state’s tax program that was implemented on July 1.

7. Mid-Year Diesel Fuel Tax Updates
Though not all states implement regular
changes, each year July emerged as a prevalent
time for state fuel tax updates. Transportation
infrastructure projects are often the driving force
behind increased fuel taxes, as local economies
depend on additional revenue to fund such
capital-intensive undertakings.
READ MORE

8. Implications of California’s LCFS Program
Emerge Behind the Scenes
The enforcement of last year’s tax levy proved a contentious
topic among California residents. With speculation that
the additional tax funds were being utilized for reasons
unrelated to the state’s infrastructure plans, a recent
initiative to revoke the tax changes gained enough
support to qualify for repeal on the state’s
upcoming November 6, 2018, ballot.
READ MORE

9. Key Drivers of Tight Capacity
& Utilizing Fuel Management
Much like any free market, freight rates and carrier capacity
are under the influence of fluctuating market dynamics. In
cyclical fashion, rates go up as capacity tightens, and as the
market adapts by flooding with truck and driver availability,
rates inevitably relax. What is important to remember
through this changing process is that underlying every
policy change, technological innovation, driver shortage,
and economic stressor are economic market fundamentals.
READ MORE

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industry insights, and related news releases
as it relates to your fuel management and
transportation strategies.