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Market Close: Aug 04 Down

Fueling Strategy: Prices are down 6 cents but will fall one penny Thursday then they’ll fall another 5.25 Friday ~ Be Safe!
NYMEX Crude    $ 68.15 DN $2.4100
NYMEX ULSD     $2.0741 DN $0.0523
NYMEX Gas       $2.2500 DN $0.0208
NEWS
Oil slumped in New York after a surprise increase in U.S. crude inventories added to renewed concerns about demand recovery as China battles the coronavirus resurgence.

West Texas Intermediate futures tumbled 3.4% to close at the lowest in more than two weeks. The delta variant of Covid-19 has been detected in almost half of China’s 32 provinces in two weeks, and at least 46 cities have advised residents against non-essential travel. Meanwhile, American crude supplies increased by 3.63 million barrels, the biggest gain since March, government data showed. Key timespreads for futures contracts tumbled in response to weakening supply-demand fundamentals.

“The resurgence in Covid infections in China is dampening perceptions of demand recovery,”said Peter McNally, global head of industrials, materials and energy at Third Bridge.

After eking out a small advance in July, August is proving to be tough for crude. Tightened controls in some Asian nations to curb the spread of the virus risk eroding oil demand at a time when the Organization of Petroleum Exporting Countries and its allies are gradually increasing supply.

The gloomy demand outlook continued to weaken timespreads in the U.S. oil market on Wednesday though the benchmark is still holding a bullish backwardation structure in which near-dated prices are trading at a premium to those further out. October futures traded at 44 cents a barrel above the November contract Wednesday, compared with more than $1 a month ago.

U.S. gasoline inventories fell 5.29 million barrels to the lowest volume since November, while a gauge of fuel demand, total products supplied, was steady, the Energy Information Administration said.

“We’re seeing a continued increase in fuel consumption, which is a good sign of economic recovery. While there is clearly concern about the delta virus, overall we’re seeing continued recovery on the demand side,” said Quinn Kiley, portfolio manager at Tortoise.

China’s latest outbreak has spread to Beijing despite the capital’s stringent measures, with authorities taking steps Tuesday to ban rail passengers from 23 regions. The financial hub of Shanghai also reported a virus case this week. As risks escalate, analysts are reviewing their economic growth projections.

There have also been rising tensions near the Persian Gulf — a region vital for the world’s oil markets — in the past week. The British Navy said a ship was safe following a possible hijacking near Iran, days after a deadly drone attack on a tanker that the U.S., U.K. and Israel all blamed on the Islamic Republic.

Have a Great Day,
Loren R Bailey, President
Fuel Manager Services Inc.
“Serving the trucking industry since 1992”
Office: 479-846-2761
Cell: 479-790-5581
www.FuelManagerServices.com
www.owneroperatoradvisoryservice.com
“To give real service you must add something which cannot be bought or measured with money, and that is sincerity and integrity.”
Categories: Fuel News
loren: Fuel Manager Services Inc. "Serving the trucking industry since 1992" I've been in and around the trucking industry for 45-years beginning in owner operator operations at Willis Shaw Express. I bought a small trucking company that I ran for 6-years then sold and went to work for J.B. Hunt Transport in 1982. After 10-years with Hunt, I started Fuel Manager Services, Inc., we are in our 29th year of serving the American trucking companies. Our simple goal was and is to bridge the gap between the trucking companies and the fuel suppliers.