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Market Close: Jan 03 Up

Fueling Strategy: Please fuel as needed today/tonight ~ Be Safe
NMEX Crude      $ 76.08 UP $.8700
NYMEX ULSD     $2.3574 UP $.0321
NYMEX Gas       $2.2565 UP $.0319
NEWS

Oil futures ended higher on Monday, beginning 2022 on a positive note as traders built on the strongest annual rise for crude in 12 years, a day ahead of an expected decision on crude production levels from major oil producers. The Organization of the Petroleum Exporting Countries and their allies, together known as OPEC+, will hold a meeting Tuesday via video conference to decide on output levels in February. At the meeting in December, the group left its current agreement in place to boost monthly overall production by 400,000 barrels per day for the month of January. It appears OPEC is unlikely to “change from the script,” and will raise output by its expected 400,000 barrels a day, said Phil Flynn, senior market analyst at The Price Futures Group, in Monday note.

Meanwhile, OPEC said Monday that Haithan Al-Ghasis of Kuwait will become its Secretary General on Aug. 1 to serve a three-year term, taking over for Nigeria’s Mohammad Barkindo, who has been OPEC’s secretary general since 2016. Reaction to the early talk on production out of OPEC is “rather muted and oil prices are rising after a big selloff going into the New Year’s Day holiday, where we saw prices fall on very light volume,” Flynn said. The market appeared to rise “on a risk-on mode and on reports of threats to global supply.” There are reports that Libya expects its oil production to fall by another 200,000 barrels a day as crews work on a damaged pipeline — two weeks after news reports said militias shut down the OPEC member’s biggest field, prompting output to drop by 350,000 barrels per day, said Flynn. “This becomes a bigger issue because OPEC is predicting [a supply] deficit in the next two quarters,” he said. “This should be very supportive for prices, especially if [Libyan output] can’t get this back online soon.”

West Texas Intermediate crude for February delivery rose 87 cents, or 1.2%, to settle at $76.08 a barrel on the New York Mercantile Exchange. March Brent crude, the global benchmark, added $1.20, or 1.5%, at $78.98 a barrel on ICE Futures Europe. WTI, the U.S. benchmark, rose 55% in 2021, the strongest percentage gain based on front-month contracts since 2009. Brent advanced 50.2% — its strongest percentage rise since 2016.

Over the past week, the average number of new U.S. COVID-19 cases has topped 400,000 for the first time, up more than 200% over the last 14 days, according to a New York Times tracker. Deaths have fallen by 3% over the same period. Dr. Anthony Fauci, the government’s top infectious disease doctor, said Sunday that the focus should be on the number of hospitalizations, which could overwhelm health systems, rather than new infections. Many infections are mild or asymptomatic and scientists believe the omicron variant, while more infectious, may be less virulent than other variants. But other variants are also circulating. Moreover, the risk of severe disease from any circulating variant, including omicron is much, much higher for the unvaccinated, Fauci warned last week. “Though omicron cases continue to climb in key geographies, the absence of widespread lock down restrictions will likely keep near term [oil] demand concerns in check,” analysts at RBC Capital Markets, led by Helima Croft, wrote in a Monday note.

“Two key geopolitical stories that we will continue to watch are the ongoing Russia-Ukraine standoff as well as the Iranian nuclear negotiations,” they said.

Have a Great Day,
Loren R Bailey, President
Office: 479-846-2761
Cell: 479-790-5581
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www.owneroperatoradvisoryservice.com
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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.