Ag Plus Energy Market Update

May 2024 Edition

Stay informed with Ag Plus Energy Market Updates, offering concise summaries of the latest developments impacting global energy markets. From shifts in oil prices to updates on supply chains, our updates provide valuable insights to help you navigate the ever-changing energy landscape.

Here's a concise summary of the latest developments impacting the energy landscape:

Ag Plus Memorial Day Weekend:

U.S. gasoline demand has been lackluster so far this year, but AAA expects a record number of Americans to take to the road over the extended Memorial Day weekend. The auto club predicts 38.4 million people will travel by car over the five-day holiday period starting on May 23. This is a 4% increase from the 36.9 million who traveled by auto last year and 1.9% above the 2019 record. AAA, which began tracking holiday travel in 2000, expects a total of 43.8 million people will travel across all forms of transportation during the holiday period, a 4% increase from 2023 levels and the highest number of travelers since 2005. Air travel is expected to rise by nearly 5% from last year, with 3.51 million people flying over the holiday, marking the highest level since 2005. The number of people using other forms of transportation, including train, bus, and cruise ship, is expected to rise by 5.6% from last year to 1.9 million, slightly higher than pre-pandemic levels seen in 2019.

March Vehicle Miles:

U.S. vehicle miles traveled increased in March compared to a year ago, according to the latest data from the Department of Transportation's Federal Highway Administration. The DOT's Traffic Volume Trends report, published Tuesday, estimated U.S. drivers traveled 275.5 billion miles in March, up 0.7% compared with March 2023. This marks the second consecutive monthly increase on a year-to-year basis and is the highest number for vehicle miles traveled during March since the DOT began tracking the data in 1999. However, according to OPIS DemandPro data, which canvasses more than 30,000 gas stations across the U.S., March station gasoline volumes were down 5% year-to-year. Improved fuel mileage and more electric vehicles on the road may explain how miles traveled increased even as fuel demand fell.

Canadian Wildfires:

Canadian wildfires in oil-producing regions are putting upward pressure on oil prices, even without reports of supply disruptions. The wildfires and lack of water in the region threaten current oil production and future production growth as the Trans Mountain Expansion (TMX) project comes online. The season’s first major wildfires have spread to roughly 10,000 hectares (24,710 acres) across Western Canada, prompting an evacuation order for a community in British Columbia and warnings of poor air quality across provinces.

Inflation:

U.S. producer prices increased more than expected in April due to strong gains in the costs of services and goods, indicating that inflation remained elevated early in the second quarter. Borrowing costs in the U.S. have remained high since last July as the government aims to quash persistent inflation. Federal Reserve Chair Jerome Powell expects U.S. inflation to continue declining through 2024 but expressed decreased confidence in those decreases after prices rose more quickly than expected in the first quarter. U.S. consumer price data, expected on Wednesday, will significantly impact the timing of the much-anticipated rate cut, which could spur economic growth and increase oil demand.

Middle East:

Ongoing conflict in the Middle East continues to pose a threat to crude supply and is likely providing support to prices amid economic concerns that apply downward pressure. Israeli tanks pushed deeper into eastern Rafah on Tuesday, reaching residential districts of the southern border city where more than a million people had been sheltering. The uncertainty surrounding Rafah and potential repercussions keep the market on edge.

Thank you for staying informed about the energy market. If you have any questions or need further information, please don't hesitate to reach out.


Tom Skorczewski

About Tom

Tom Skorczewski has been building his expertise in the energy sector in his role as CES Sales Energy/Refined Fuels for CHS and Ag Plus. 

Since joining the company in 2022, Tom has been a driving force behind the success of Ag Plus in the ever-evolving energy market landscape. With a keen understanding of market dynamics and a passion for delivering top-notch service to clients, Tom is dedicated to helping businesses navigate the complexities of the energy industry. 

His commitment to excellence and strategic insights make him an invaluable asset to the Ag Plus team and the clients we serve.

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