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The DOE/EIA retail diesel benchmark moved only slightly in late October 2022, while ULSD November futures swung sharply during expiry. The moves were attributed to a short squeeze as traders with short positions were forced to cover.
The benchmark stayed about 50 cents below its June all-time high.
Expiry-driven squeezes amplify futures volatility but do not change underlying supply, so retail diesel and freight surcharges move far less. Buyers should look at fundamentals rather than expiry spikes.
freightwaves.comJohn KingstonOct 31, 2022Not enough comparable past events yet for a historical read.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
The expiry-driven short squeeze inflated November ULSD futures, and the unwind of that squeeze set up the sharp reversal.
