Fueling Strategy: Please “FUEL AS NEEDED” today/tonight, Prices will go down less than a penny Thursday~Be Safe

NMEX Crude      $ 75.09 UP $.7200

NYMEX ULSD     $2.6818 DN $.0095

NYMEX Gas       $2.2095 DN $.0006

NEWS

March WTI crude oil on Wednesday closed up +0.72 (+0.97%), and Mar RBOB gasoline closed up +0.56 (+0.25%). Crude oil and gasoline prices on Wednesday posted moderate gains, with crude climbing to a 4-week high.  Wednesday’s decline in the dollar index to a 1-week low supported energy prices.  Also, Wednesday’s rally in the S&P 500 to a new record high shows optimism in the economic outlook that is bullish for energy demand and crude prices.  Crude raced to its high Wednesday after EIA weekly crude inventories fell more than expected.

Wednesday’s action by the PBOC to cut its reserve requirement ratio for banks by 50 bp to 10.00% supports crude prices as it will boost liquidity and may revive economic growth in China, the world’s second-largest crude consumer.

Wednesday’s economic news showed signs of strength in global manufacturing activity that is bullish for energy demand and crude prices.  The U.S. Jan S&P manufacturing PMI unexpectedly rose +2.4 to 50.3, stronger than expectations of a decline to 47.6 and the fastest pace of expansion in 15 months.  Also, the Eurozone Jan S&P manufacturing PMI rose +2.2 to a 10-month high of 46.6, stronger than expectations of 44.7. Concerns about escalating geopolitical tensions in the Middle East support crude prices.  The U.S. and the UK continue to launch airstrikes against Houthi rebels in Yemen in retaliation for Houthi attacks on commercial shipping in the Red Sea.  Earlier this month, the U.S. Navy advised vessels to avoid the southern Red Sea.  Houthis started attacking ships in the Red Sea in mid-November in support of Hamas in the Israeli-Hamas war and said they won’t stop the attacks until Israel ends its assault on Gaza.  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.

A decline in Russian crude oil exports is supportive of crude oil prices.  Tanker-tracking data from Vortexa monitored by Bloomberg shows the four-week average of refined fuel shipments from Russia fell to 2.62 million bpd in the four weeks to Jan 21, down -70,000 bpd from the prior week.

Crude prices have support after Ukraine on Sunday launched a drone attack that caused a fire and shut down Russia’s Novatek PJSC’s gas-condensate terminal in the port of Ust-Luga, close to some of Russia’s most important oil export facilities.  An attack by Ukrainian drones on Russian crude export terminals could disrupt Russian crude exports and is bullish for oil prices.

A bearish factor for crude oil was the announcement from Libya’s National Oil Corp that crude flows from the Sharara oil field, which has been closed for the past three weeks, would resume.  The Sharara oil field is Libya’s largest and pumps about 300,000 bpd.

Have a Great Day!

Loren R Bailey, President

Office: 479-846-2761

Cell: 479-790-5581

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JUN 06 VACATION LEAVE AFTER LUNCH

JUN 10 RETURN/ARRIVE 1300

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