Market Close: April 29 Down, Diesel DN $.0100, Gas DN $.0114
Apr 29th, 2024 by loren
Fueling Strategy: Please “FUEL AS NEEDED” today/tonight ~ Be Safe
NMEX Crude $ 82.63 DN $1.2200
NYMEX ULSD $2.5368 DN $0.0114
NYMEX Gas $2.7308 DN $0.0131
NEWS
June WTI crude oil on Monday closed down -1.22, and June RBOB gasoline closed down -1.31. Crude and gasoline prices posted moderate losses on Monday. Crude prices Monday were under pressure on an easing of Middle East tensions. The prospects for a cease-fire in the Hamas-Israel war have improved, undercutting the geopolitical risk premium in crude prices. Losses in crude were limited due to a weaker dollar and a rally in stocks, which bolsters optimism in the economic outlook that is supportive of energy demand. The prospects for a cease-fire in the Hamas-Israel war have improved, easing geopolitical risks and weighing on crude prices.
The New York Times reported Monday that Israel reduced the number of hostages that it wants Hamas to free during the first phase of a new truce in Gaza to 33 from 40, according to three Israeli officials. The shift has raised expectations that Hamas and Israel might be edging closer to a cease-fire.
Strength in the crude crack spread is bullish for crude prices. The crack spread on Monday rose to a 1-1/2 week high, encouraging refiners to boost their crude purchases and refine the crude into gasoline and distillates.
A decrease in crude in floating storage is bullish for prices. Monday’s weekly data from Vortexa showed that the amount of crude oil held worldwide on tankers that have been stationary for at least a week fell -17% w/w to 62.83 million bbl as of April 26. Reduced crude demand in India, the world’s third-largest crude consumer, is negative for oil prices after India’s March oil demand fell -0.6% y/y to 21.09 MMT.
Crude prices have underlying support from the Israel-Hamas war and concern that the war might spread to Hezbollah in Lebanon or even to a direct conflict with Iran. Also, attacks on commercial shipping in the Red Sea by Iran-backed Houthi rebels have forced shippers to divert shipments around the southern tip of Africa instead of going through the Red Sea, disrupting global crude oil supplies.
Crude has support from the recent Ukrainian drone attacks on Russian refineries that damaged several Russian oil processing facilities, limiting Russia’s fuel exporting capacity. Russia’s fuel exports in the week to April 21 fell by -500,000 bpd from the prior week to 3.45 million bpd. JPMorgan Chase said it sees 900,000 bpd of Russian refinery capacity that could be offline “for several weeks if not months” from the attacks, adding $4 a barrel of risk premium to oil prices.
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Loren R Bailey, President
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