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Market Close: Jan 17 Mixed

Fueling Strategy: Please fuel as needed today/tonight. Prices are down 3.5 cents but will continue to go down Saturday another 2 cents – Be Safe
NYMEX Crude    $ 58.54 UP $.0200
NYMEX ULSD     $1.8592 DN $.0008
NYMEX Gas       $1.6406 DN $.0142
NEWS
Oil prices steadied on Friday as sluggish economic growth in China, the world’s biggest crude importer, raised concerns over fuel demand and countered optimism from the signing of a China-U.S. trade deal. Brent Crude gained 23 cents to settle at $64.85 per barrel.WTI Crude gained 2 cents to settle at $58.54. For the week, Brent fell 0.2%, while WTI lost 0.8%.

China’s economy, the world’s second-largest, grew by 6.1% in 2019, its slowest expansion in 29 years, government data showed on Friday. “Mounting downward economic pressure will perhaps limit oil’s upside in the mid- to long-term,” said Margaret Yang, market analyst at CMC Markets. But surging Chinese demand, as seen in refinery throughput figures, helped offset the less positive economic growth data. In 2019 Chinese refineries processed 651.98 million tonnes of crude oil, equal to a record high 13.04 million barrels per day (bpd) and up 7.6% from 2018, government data showed. Throughput also set a monthly record for December. “The increase in China’s refinery capacity is reshaping the trade flows of refined products, while the increase in U.S. crude oil production is reshaping the trade flows of crude oil,” said Olivier Jakob of consultancy Petromatrix.

Prices rose on Thursday after China and the United States signed their Phase 1 trade accord. As part of the deal, China committed to an additional $54 billion in energy purchases. But still, some were skeptical about fallout from the deal. “China has agreed to purchase a massive amount of U.S. oil that may prove difficult to digest,” Jim Ritterbusch, president of trading advisory firm Ritterbusch and Associates, said in a note. “This has contributed to the oil market’s muted response to Phase 1 thus far.”

The market was also lifted by the U.S. Senate’s approval of changes to the U.S.-Mexico-Canada Free Trade Agreement. Looking ahead, the International Energy Agency (IEA) on Thursday offered a bearish view of the oil market outlook for 2020. Supply from the Organization of the Petroleum Exporting Countries will exceed demand for its crude, the IEA forecast, even if OPEC member states comply fully with output cuts agreed with Russia and other producers in a grouping known as OPEC+. The IEA view is somewhat reflected by OPEC’s own view, which found non-OPEC supply this year growing by more than overall demand. OPEC+ has been curbing oil output since 2017 to balance the market and support prices.

Have a Great Day,
Loren R Bailey, President
Fuel Manager Services Inc.
Office: 479-846-2761
Cell: 479-790-5581
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.