ULSD Futures Firm off 2024 Low despite Manufacturing Slump


   
   CRANBURY, N.J. (DTN) -- ULSD futures on the New York Mercantile Exchange 
traded at $2.5770 gallon near the noon hour in New York, pushing above Monday's 
$2.5039 19-week low after finding technical support in the upper $2.40 gallon 
range, while fundamentals remain bearish.

   The latest data point highlighting lackluster demand for diesel fuel was 
released Tuesday morning, with the S&P Global Flash US Composite PMI showing a 
1.2-point decline to 50.9 in April, a four-month low. All components fell, with 
manufacturing sliding 2 points into a slight contraction at 49.9 in April.

   There was a slight increase in post-production inventories according to 
respondents noted S&P, which "reflected a slowdown in demand which left firms 
holding unsold goods."

   Chris Williamson, chief business economist at S&P Global Market Intelligence 
said, "The US economic upturn lost momentum at the start of the second quarter, 
with the flash PMI survey respondents reporting below-trend business activity 
growth in April."

   He suggested the trend might continue as new business inflows in April 
declined for the first time in six months. However, inflation pressure in 
manufacturing is building, "with factory cost pressures intensifying in April 
amid higher raw material and fuel prices."

   The Richmond Federal Reserve Bank released their monthly survey of business 
activity Tuesday, finding manufacturing activity "remained slow in April." 
While improving from March, new orders remained negative.

   Distillate fuel supplied to the U.S. market averaged 3.543 million bpd 
during the four weeks ended April 12, down 327,000 bpd or 8.4% against the 
comparable year-ago period, according to data from the Energy Information 
Administration.

    

    

   Brian L. Milne, 1.732.768.0260, brian.milne@dtn.com, www.dtn.com.




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