US and China Relations: More details on the who and where are attending a summit between the U.S. and China on trade relations this weekend in Switzerland. U.S. Treasury Secretary Scott Bessent will meet with China's top economic official in Geneva.   

US Crude Sanctions: The United States recently sanctioned two small Chinese refiners after the entities bought Iranian crude oil. The sanctions have created some difficulties bringing this product to market - pointing to what some have assessed success for Washington in their endeavor to keep Iranian crude oil from making it to the wider market easily. 

Iranian Nuclear Deal: Coupled with an  increase in production from OPEC+ announced earlier in the week, additional negotiations between the United States and Iran on their nuclear program might have a ripple effect into energy futures. Likely levers of negotiation would be easing oil sanctions on Iran, and should a deal be reached, analysts believe that crude could be priced under $55/bbl with the increase in supply available in the market. 

Market Overview: Markets are bouncing higher after a down day yesterday. Traders appear to be optimistic regarding the U.S. and China talks scheduled for this weekend. Positive results in the meeting might be the beginning of a pull back on tariffs and positive for the global economy. Futures are being held back by additional supply coming to market with OPEC+ producers and demand uncertainty from waning economic sentiment. 

PADD2 Distillate Inventory

PADD2 diesel inventories have dropped under the 5-year range low for the week ending last week. Inventories in the PADD have been under pressure with the combination of refinery maintenance work, creating periods of reduced production, and traditional spring agriculture demand that is significant in the mid-continent. Basis prices on the diesel products in the PADD have seen significant strengthening since earlier in the year after inventories were at range highs on a lack of buying at the end of 2024 and beginning of 2025.