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Music Hello, welcome to the Global View on this Friday. I'm Andrew Gagan. Thanks for joining us again here at Ausbiz as we get across what happened overnight. Global markets sailing off in Europe. The bank index plunging more than 2% to a three-month low. Wall Street seeing a sharp pullback in AI and semiconductor stocks. So the tech-heavy Nasdaq dropping around 1.25%. The S&P 500 also declining. The Dow managing a slight gain. Those losses led by the likes of Broadcom and AMD, NVIDIA and Dell also tumbling. Chipotle shares, they jumped significantly following reports that Starbucks, I should say, previously explored a takeover of the fast food chain. Well, fixed income markets remain highly volatile. The 10-year U.S. Treasury yield spiking early to 5.35%, matching 24-year highs reached earlier in the week before moderating back to 5,26 later in the day. Australian 3-year government bond yield futures round tripping from 4.9 to 4.97 and back again. The 10 years settling at 5.37%. U.s. dollar index little change. The Aussie currently buying 69.6 U.C. Bitcoin has fallen further at just over 81,500 U.U. dollars. Brent crude surging more than 4% to $104 a barrel following reports the U.S. could launch fresh attacks on Iran before the next month's midterm elections. Gold slightly higher at around $4,130 an ounce. Copper futures down more than 1%. Iron ore at around 93 dollars a ton. I mentioned those oil prices on the move yet again with potentially the prospect of further military action in the Middle East. Well, diesel prices, meanwhile, they've surged due to production and shipping disruptions caused by not just the Iran war, but also the Ukraine-Russia conflict. Let's get across the detail. Rob Thummel is joining us from energy-focused investment management firm Tortoise Capital. Rob, welcome to you. Great to have you on the show. Now, much like us here in Australia, where we run on diesel, certainly the road transport, agriculture, diesel is integral to our economy similarly there it's also integral to the u.s economy what are you seeing in the effect of those high prices well so far not not much as far as demand destruction is concerned but that's something we watch very closely because as you highlight diesel as a global commodity is is really important it's kind of is the fuel supply source for that last mile for for so many consumer products both in the US, Australia, really globally. And so these higher diesel prices because of an undersupplied market could wreak havoc in the U.S. basically, maybe in Australia as well. We hope not, but we're watching it pretty closely because diesel is such an important fuel. So, Rob, there's focus on those crack spreads. Just explain what that is and the pricing we're seeing for diesel at the moment? Yeah, so the crack spread is really kind of like a refining margin. It's the margin that the refiners earn. It is basically the difference between what the refiners charge for diesel or gasoline relative to the cost of the input, which is often crude oil. And so because the market is undersupplied for diesel, what we have seen is the prices for diesel rise domestically in the U.S. by a significant amount, while the cost of that crude oil has not risen by the same amount. So because of the undersupplied market, rising demand, what do you have? Well, you have rising gross margins. And so a lot of the refiners globally, but specifically in the US, have done pretty well from a profitability perspective because of that significant increasing crack spread that you were referring to. Can you give us an idea of just how far those diesel prices have moved in the States there? I think they're up like something like almost 80 percent basically in a year. You know, gasoline prices are up 60. Diesel are up about 80 here in the U.S. And so, yeah, they're upp a lot. And, you know, what's going to turn that around is probably something that happens maybe in a really with the iran war or really the ukrainian war um with russia because russia's the largest exporter the second largest exporters diesel i should say behind the u.s however right now russia russia has a ban on diesel exports because a lot of the drones from ukraine are bombing a lot the russian refineries and so russia is trying to keep some of that diesel at home to to fuel its economy yeah because certainly those russian refineries have been targeted by ukraine to the point that president trump said stop doing that but interestingly also in terms of policy there were reports that president Trump himself was looking for a diesel export ban is that likely to proceed or not yeah we don't think so uh you know a diesel export ban uh likely increases diesel prices in in the u.s and and potentially globally as well obviously the u s is the lar is one of the largest exporters of diesel in the world and if you take more supply off the market of diesel that's likely just going to continue to increase the price which is probably not going to be a a good solution so um rob can you give us a sense of what you're you're doing there at Tortoise Capital, and how are you playing the energy market at the moment? Yeah, so Tortoise, you know, we invest across the entire energy sector. We focus on a lot of the sectors, evaluate all the sectors on a periodic basis. Right now, we've always liked the energy infrastructure, the pipeline market, because of the high dividend income that you can get from that, those set of stocks, and then in addition to the growth that you get. More specific in the energy markets, the refining sector has been a sector that we've looked at quite closely and have been adding to over the last few months because of that higher crack spread that you were talking about. So those are two areas where we've really been interested. Also the LNG market, the liquefied natural gas market. You know, European natural gas prices, Asian natural gas prices continue to be high relative to the U.S. And so that's presented some opportunities for some of the liquefied natural gas or LNG shippers here in the US. Do you get the sense, as I mentioned there, that the midterms, less than a month away now, that President Trump is going to make some policy move in regards to relieving price pressures at the pump? Probably not at this point. I think probably the policy measures that have been taken There's going to be some releasing and encouraged releasing of global stocks of diesel and gasoline inventories into the market to try to help reduce that supply-demand imbalance that's currently driving these prices higher. So I think we are where we are right now. We'll see where we go from here. We do know that eventually some of these international conflicts will resolve and we will see lower diesel prices, lower gasoline prices and likely lower oil prices. It's just hard to know and time exactly when that's going to happen. Exactly. A question of when. But as you said at the top there, you've seen no demand destruction as such with diesel. If the conflicts, both those conflicts, continue to drag on, further threatening diesel supply, what is the likely flow-on effect? Are you going to start to see that demand destruction given the prices are so high? Well, I hope not. But if we continue to see the conflict, it extends even further. We continue to have an undersupplied market. You probably continue to see prices go higher. And so that would, you know, cause us to really watch for diesel consumption globally and see if there is some type of demand destruction. So far, we haven't seen it. You know, economies around the world rely on diesel so much that, you know, for your economy to keep going, you're going to continue to need to consume diesel. So I hope prices don't get that high. It's something we always watch here at Tortoise and make sure that we don't have demand destruction because that's not what we want at all as an energy investor. But is there a possibility? Sure, there always is, especially if prices continue to rise even more from here. Rob, we're glad to get across what you're seeing in energy markets with the focus on diesel. Thanks so much for joining us in Tortoise Capital. Thank you, Andrew. Let's come back home ahead of the open. Now, taking a look at where we're likely to open, actually positive, defying what we saw on global markets overnight. So that's why futures up almost one fifth of a cent. And the clear focus today will be on Firmus Technology, officially confirming it has scrapped its blockbuster public float and completely withdrawn its application to list on the ASX. In fact, in a statement released recently this morning, it has said, having considered recent market volatility and prevailing market conditions, the board determined that the terms on which the offer could proceed would not appropriately reflect the strength of the company's business and long-term growth outlook. Going on to say that the board therefore concluded that the proceeding with the offer was not in the best interest of the company and its shareholders. So planned as the second largest listing in Australian history behind Telstra, the blockbuster debut violently unravelled over a 36-hour window due to severe investor scepticism. And the books officially closed yesterday morning without any clarification of final pricing or deal structure. And in a desperate bid to save the float, bankers rapidly slashed the indicated share price from $11 down to $8.25 and then $8, And the reduction threatened to wipe out more than $8 billion in the company's projected $43.7 billion market valuation. And we'll get across that and much more when we get into the open in just a couple of minutes time. Join us for that. Thank you.