Fueling Strategy: Please “FUEL AS NEEDED” today/tonight, Wednesday prices will fall $.01 cent, Thursday prices will continue dropping almost 3 cents~Be Safe

NMEX Crude      $ 77.82 UP $1.0400

NYMEX ULSD     $2.8068 DN $0.0271

NYMEX Gas       $2.2607 UP $0.0322

NEWS

March WTI crude oil on Tuesday closed up +1.04 (+1.35%), and Mar RBOB gasoline closed up +3.22 (+1.42%). Crude oil and gasoline prices on Tuesday recovered from early losses and settled moderately higher.  A weaker dollar Tuesday was supportive of energy prices.  Also, signs of strength in the global economy are bullish for energy demand after the IMF raised its 2024 global GDP forecast.  Crude still has support from heightened geopolitical risks in the Middle East that threaten to disrupt crude supplies from the region.  

On Tuesday, the International Monetary Fund (IMF) raised its 2024 global GDP forecast to 3.1% from a 2.9% projection in October, a supportive factor for energy demand and crude prices.

Better-than-expected global economic news Tuesday shows strength in the global economy that is bullish for crude prices.  The Conference Board U.S. Jan consumer confidence index rose +6.8 points to a 2-year high of 114.8, right on expectations.  Also, the Dec JOLTS job openings unexpectedly rose +101,000 to 9.026 million, showing a stronger labor market than expectations of a decline to 8.750 million.  In addition, Eurozone Q4 GDP was revised upward to unchanged q/q and +0.1% y/y from the previously reported -0.1% q/q and +0.1% y/y.  Finally, the Japan Dec jobless rate unexpectedly fell -0.1 to an 11-month low of 2.4%, showing a stronger labor market than expectations of no change at 2.5%.

Weakness in the crude crack spread is bearish for crude prices as the crack spread Tuesday fell to a 1-1/2 week low.  The lower crack spread discourages refiners from purchasing crude oil and refining it into gasoline and distillates.

The escalation of geopolitical tensions in the Middle East supports crude prices.  On Sunday, three U.S. servicemen were killed after Iranian-backed militants launched a drone attack on a U.S. base in Jordan near the Syrian border.  Last Friday, Houthi rebels ramped up attacks on commercial shipping in the Red Sea and struck an oil tanker with a missile that was carrying fuel in the Gulf of Aden.  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.

Have a Great Day!

Loren R Bailey, President

Office: 479-846-2761

Cell: 479-790-5581

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