OPEC+ expected to approve another output increase as crude falls to pre-war lows
OPEC+ looks set to clear another output increase, according to Reuters sources, and global oil prices have dropped to lows not seen since before the war. For anyone buying fuel at the rack, that means the crude cost sitting under every gallon you buy keeps sliding, and the pump is already showing it.
The OPEC+ hike
The group is tipped to raise quotas again as the Middle East calms, per multiple sources cited by Reuters and others. Iraq raised its own production through June, adding barrels on top of the planned increase. Prices have eased to pre-war levels as the extra supply lands.
For anyone buying at the rack, cheaper crude should keep pulling wholesale down. That helps margins if street prices lag the drop, and it hurts anyone holding a tank of product bought higher last month. Watch your replacement cost against what you paid.
The risk to this picture is on the supply side. Ukrainian drones hit a St Petersburg oil terminal and a nearby port this week, part of a larger strike campaign on Russian export infrastructure. So far it hasn't moved the global number. If those hits start taking real barrels offline, the OPEC+ cushion is the thing keeping prices soft.
$2.50 on the Fourth
Retail is following crude down. Harman's Market and its United station in Macungie, Pennsylvania sold regular at $2.50 a gallon on Independence Day, with owner Harman Singh calling it a thank-you to the community after a tough stretch. That's a loss-leader open, not the market, but it tells you where a new operator thinks he can win regulars.
The broader read is mixed by region. Prices trended down for July 4 travelers in Tempe, while Southern California posted its second-highest gas prices for a July 4 on record. If you run stores in more than one state, the spread between those markets is wider than usual right now, and it changes where your fuel margin is actually coming from.
The through-line is that street prices are softening into a falling wholesale market. The operators making money are the ones letting the pump lag the rack instead of matching every penny down.
Renewable diesel for fleets
Marathon and Neste are both pushing renewable diesel harder into US trucking fleets, Marathon selling it B2B and Neste marketing its MY Renewable Diesel line to operators chasing lower emissions under LCFS-style programs.
For haulers, this is the fuel your carrier customers may start asking about, especially any running lanes into California. It drops into existing diesel engines and tanks, so the real question for a jobber is whether you can source it at a spread that pencils against regular ULSD. Right now that spread depends heavily on credit values, so treat any margin as a moving number.
What to watch
Whether OPEC+ actually confirms the increase and how many barrels it adds. Iraq's June overproduction hints the real supply number could run above the headline quota. Watch the Ukrainian strikes on Russian terminals for any hit large enough to tighten export flows and put a floor under crude. And watch whether the retail slide holds through July or whether California-style regional spikes start showing up in your other markets.