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The diesel and gasoline crack spreads, which had been on a wild tear, with diesel its highest level since late 2023, reversed after fresh headlines about a possible breakthrough peace plan to perhaps end the war between Russia and Ukraine. The thoughts are that the looming sanctions on Russia set for Friday could get shelved—or at least softened—keeping India’s oil-buying spree with Moscow alive and well. The market’s betting that maybe, just maybe, the party isn’t over yet for buyer of heavy barrels of Russian oil easing concerns about global diesel shortages going into winter.  

The FT report says that the US and Russia have come up with a new framework for a peace plan, which wouldforce Ukraine to make major concessions—including surrendering territory it still holds and slashing the size of its military. However, the idea that such sweeping compromises could actually be agreed upon and implemented before the sanctions deadline tomorrow seems highly unlikely.

The BBC pointed out that U.S. Secretary of State Marco Rubio stated on X that establishing a lasting peace will necessitate both parties making challenging yet essential concessions.That is why we are and will continue to develop a list of potential ideas for ending this war based on input from both sides of this conflict”.Also, the EU foreign policy chief Kaja Kallas warned on Thursday that for any plan to work, it would need to have Ukrainians and Europeans on board, and French Foreign Minister Jean-Noël Barrot said “the Ukrainians do not want any form of capitulation”.

Any movement towards a peace negotiation and could cause President Trump to delay the sanctions which from a supply and demand viewpoint, might be in our ally’s best interest as supplies of diesel and gas oil in Europe is extremely tight. This could have a major impact on the market as we have an unprecedented amount of Russian crude seemingly vanishing into the Twilight Zone, lost at sea, with nearly half the Russian tanker fleet sailing under a cloak of secrecy—no declared ports in sight. On top of that, Indian buyers have slammed the brakes, slashing Russian oil imports by a staggering 65%, while China’s state-owned refiners are also tapping the brakes, holding off on purchases for now. If this changes, so does the market dynamics.

And we have to watch those dynamics as a chill is blasting Western Europe this week, flipping the script after a gentle autumn and hammering places like the UK, Spain, and Central Europe with sub-zero temps, snow, and ice. Blame it on an early polar vortex stumble, which might stretch the cold well into December. All eyes are on Poland, where thousands of families, who ditched coal for heat pumps and solar—thanks to green mandates and juicy subsidies—are about to see how their new tech holds up in the deep freeze. Bloomberg says this is Poland’s big test.

Remember Poland was once king of coal (70% of electricity, most home heating), but since 2021, heat pump production has exploded by 120%, and the government’s aiming to swap half of those old coal and wood furnaces for cleaner tech by 2030. Over a million homes joined in, with heat pumps now grabbing 15% of the market—up from basically zero a decade ago. The “Clean Air” program is throwing out 90% subsidies to anyone willing to make the switch. Yet heat pumps get the job done down to -15°C, but this week’s -10°C chill means backup systems are firing up, and folks are bracing for higher electricity bills—20-30% bumps in the cold. Solar panels soften the blow in daylight, but with most homes still badly insulated, the cold bites hard. Politics and coal lobby pushbacks are slowing geothermal options, which could really move the needle.

Zooming out, Europe’s heating season is locked and loaded: natural gas covers 40%, heating oil 10-15% in northern spots. Supply is solid for winter 2025, even with Russian pipeline flows now just a trickle. EU storage hit 83% full in October, the best in five years, and LNG imports smashed records thanks to the US, Norway, and Qatar. Prices are steady; no major shortages expected even if the cold drags on.Yet if If December stays frosty, demand could jump 5-10%, but analysts say the continent’s tanks look set to keep the heat on. Major risks? Only if geopolitics or a wild deep freeze spike demand by 20% or more, but new LNG routes help keep things balanced.

Global oil demand didn’t just step on the gas in September—it floored it. We saw a 1.4 million barrels per day (bpd) jump versus August, and 1.8 million bpd more than last year, all thanks to the United States and Indonesia guzzling more crude than ever before. The Joint Organizations Data Initiative (JODI) dropped these numbers Wednesday, and it’s got the bulls licking their chops.

But wait, there’s more: worldwide crude exports rose by 1.3 million bpd since August and hit 1.5 million bpd higher than last September. The latest batch of self-reported data from 44 countries—tidily packaged by the folks at the Riyadh-based International Energy Forum (IEF)—shows the barrels are moving fast and furious across borders.

OPEC+ decided to put the brakes on their earlier production cuts back in April, unwinding a hefty chunk and letting the oil flow. Non-OPEC+ supply is also flexing its muscles, with output and exports from the U.S., Brazil, Guyana, and Canada cranking up the volume. It’s a North and South American barrel bonanza.

And all those extra barrels have to go somewhere. JODI’s numbers confirm that global crude and product inventories climbed in September compared to August. That means the tanks are filling up—a fact that lines up with what other estimates have been whispering to traders all month. Supply is on the rise, but with demand lighting up, it’s anyone’s guess how long those tanks stay comfy. In this market, it’s all about keeping your eye on the red-hot consumption and the ever-shifting supply chessboard. Call Phil Flynn at 888-264-5665 if you want to get involved. Stay tuned, because the heat on this global oil story isn’t cooling off anytime soon.

This came as EIA as refiners ramped up and decided to crank the pedals. U.S. crude oil refinery inputs jumped 258,000 barrels per day to average a solid 16.2 million bpd, pushing refinery utilization up to a respectable 90.0% of operable capacity reflecting high margins.

U.S. natural gas rebounded as Fox Weather reports an upcoming US polar vortex. Fox Weather also notes Hawaii’s first snowfall while several other cities across the US experience a snow drought. Fox Weather says that two storms loom over next week’s Thanksgiving holiday with the potential to cause delays during the busiest travel period of the year, when close to 82 million Americans are expected to take to the road, rail or sky. The first storm system is expected to develop next Monday, Nov. 24, and bring rain to the southern Plains as it tracks into the Southeast and potentially the mid-Atlantic or Northeast through Tuesday.

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