The diesel market showed significant strength as the March ULSD contract rose by 6.14 cents to trade at $2.6472 per gallon by midday. Prices peaked earlier in the session at $2.6756 per gallon, marking the highest level for a front-month contract since late January. This rally is primarily driven by a massive blizzard blanketing the Northeast, where high winds are currently disrupting shipping operations in and out of the New York Harbor and into New England.

Weather-Driven Supply Constraints

The volatility is underscored by an unusually wide spread between the March and April contracts. While the front-month March contract surged, the April contract sat at $2.5247 per gallon, creating a spread of approximately 12.5 cents. Market observers note that while front-month volumes appear thin due to upcoming expirations at the end of the week, the underlying physical constraints caused by the weather are providing substantial price support.

In contrast, the broader petroleum complex struggled to find a clear direction. March West Texas Intermediate (WTI) is set to expire today, trading down 2 cents at $66.45 per barrel after an early morning peak of $67.28. Brent futures also saw a minor decline, slipping 8 cents to $71.68 per barrel. Meanwhile, regional gasoline markets in the Midwest showed signs of life, with prices in Chicago and Group 3 rising by more than 2 cents as the trading day progressed.