Sept. 28, 2027
Crude oil will get the headlines this week. Diesel is the number that matters to transportation and agriculture. Potash will be the fertilizer story.
Diesel prices are at record highs. U.S. refiners are operating at their highest utilization rate in eight years, but distillate inventories remain 15% below the five-year seasonal average. Retail diesel has moved above $6.00 per gallon. The problem is not simply whether enough crude oil exists. It still has to be refined, transported and delivered into a market that has little inventory to spare.
The oil market begins the week trying to determine whether Middle East flows are actually improving. Saudi Arabia has been working around damaged infrastructure, while reports on traffic through the Strait of Hormuz remain mixed. Additional crude reaching the market could pull benchmark prices lower. That does not automatically rebuild diesel inventories or reduce retail fuel prices. Crude oil and diesel are connected. They are not the same market.
President Trump’s announcement that the United States is working on a deal to purchase potash from Belarus will also receive attention. Cheaper potash sounds good. It is not a complete fertilizer solution.
Potash is one nutrient. Nitrogen and phosphate markets remain more directly exposed to natural gas, ammonia production, sulfur, ocean freight and continued disruption in the Middle East. Analysts also question how much Belarusian product can be moved economically into the United States and whether it would materially change a market already supplied primarily by Canada. The volume, delivered price and timing of the proposed agreement remain unclear. Until those details are known, it is a headline—not a market price.
Wednesday’s Energy Information Administration petroleum report will provide the next good look at crude and refined-product inventories. Distillate stocks and refinery utilization will be the numbers to watch. If crude inventories increase while distillates decline, the market has more raw material but no immediate relief where supplies are tight.
Thursday brings the natural-gas storage report. Natural gas is a major cost in nitrogen fertilizer production. Comfortable storage would give manufacturers some breathing room. A smaller-than-expected build could support natural-gas prices and, in turn, ammonia and urea. The petroleum report is released Wednesday and the natural-gas storage report Thursday.
USDA also has several reports on the demand side of the feed market. Milk Production comes Tuesday, followed by Hogs and Pigs and Livestock Slaughter Thursday, then Cold Storage Friday. The milk report will help show whether dairy-sector feed demand is expanding. The remaining reports will provide a broader look at livestock inventories, meat production and movement through the protein complex.
Friday’s rig count will provide another measure of the domestic energy supply response. More rigs may mean more production later. Later is the important word. Changes in drilling activity take time to work through production, inventories and retail prices.
There will be plenty of numbers this week, but the larger issue is how they fit together. Oil supply may improve while diesel remains tight. A potash agreement may attract attention without changing the broader fertilizer market. Natural gas may move on a single storage report, while nitrogen prices respond more slowly.
Markets can change in an afternoon. Transportation plans, fertilizer purchases and production decisions last much longer. That is why the weekly numbers matter, but the duration of the decisions made around them matters more.
Jon Paul Driver