Market Close: July 12 UP, Diesel UP $.0159, Gas UP $.0443
Jul 12th, 2023 by loren
Fueling Strategy: Please keep your tanks topped today/tonight, before 23:00 CST fuel again, Thursday prices will go Up 3 cents~Be Safe
NMEX Crude $ 75.75 UP $.9200
NYMEX ULSD $2.5996 UP $.0159
NYMEX Gas $2.6670 UP $.0443
NEWS
August WTI crude oil on Wednesday closed up +0.92 (+1.23%), and Aug RBOB gasoline closed up +4.43 (+1.69%).
Crude oil and gasoline prices Wednesday settled moderately higher, with crude climbing to a 3-1/4 month nearest-futures high and gasoline rising to a 3-week high. The selloff in the dollar index (DXY00) Wednesday was bullish for energy prices. Also, a rally in the S&P 500 to a 14-1/2 month high Wednesday signals optimism in the economy and energy demand. Crude prices fell back from their best levels after weekly EIA crude inventories unexpectedly increased.
In a supportive factor for oil prices, Saudi Arabia last week said it would extend its unilateral 1 million bpd production cut through August, keeping Saudi Arabia’s crude output at about 9 million bpd, the lowest level in several years. Also, Russia pledged last Monday to cut 500,000 bpd of crude output in August voluntarily. However, Russia has yet to implement its pledged crude production cuts fully. Russian crude production cuts totaled 350,000 bpd in June, below the 500,000 bpd of cuts it said it would implement in March. Meanwhile, OPEC crude production in June rose +80,000 bpd to 28.57 million bpd.
Oil prices continue to be undercut by concern about weaker Chinese energy demand. China’s National Petroleum Corp (CNPC), China’s largest oil and gas producer, cut its 2023 China crude oil demand forecast on June 20 to +3.5% to 740 MMT from a March forecast of +5.1% to 756 MMT. In another sign of weak Chinese oil demand, analytics firm Kpler recently reported that China’s crude oil stockpiles rose to a 2-year high in May of 966 million bbl, well above the five-year average of 858 million bbl.
An increase in crude in floating storage is bearish for prices. Monday’s weekly data from Vortexa shows the amount of crude oil held worldwide on tankers that have been stationary for at least a week rose +5.5% w/w to 112.07 million bbl as of July 7.
Wednesday’s weekly EIA inventory report was mostly bearish for crude and its products. EIA crude inventories unexpectedly rose +5.95 million bbl versus expectations of a -50,000 bbl draw. Also, EIA gasoline supplies fell -4,000 bbl, less than expectations of -1.35 million bbl. In addition, EIA distillate stockpiles unexpectedly rose +4.82 million bbl versus expectations of an -800,000 bbl draw. On the positive side, crude supplies at Cushing, the delivery point of WTI futures, fell -1.61 million bbl.
Wednesday’s EIA report showed that (1) U.S. crude oil inventories as of July 7 were +0.7% above the seasonal 5-year average, (2) gasoline inventories were -7.0% below the seasonal 5-year average, and (3) distillate inventories were -13.4% below the 5-year seasonal average. U.S. crude oil production in the week ended July 7 fell -0.8% w/w to 12.3 million bpd, falling back from the prior week’s 3-year high of 12.4 million bpd. U.S. crude oil production is well below the Feb-2020 record-high of 13.1 million bpd.
Baker Hughes reported last Friday that active U.S. oil rigs in the week ended June 30 fell by -5 rigs to a 15-month low of 540 rigs. That is well below the 3-1/4 year high of 627 rigs posted on December 2, 2022. U.S. active oil rigs have more than tripled from the 18-year low of 172 rigs seen in Aug 2020, signaling an increase in U.S. crude oil production capacity.
Have a Great Day,
Loren R Bailey, President
Office: 479-846-2761
Cell: 479-790-5581
SCHEDULED OUT OF OFFICE
JULY 11 AT 3:00 PM
JULY 18 AT NOON
JULY 21 AT 3:00 PM
Tell Us How We’re Doing On Google Business
https://g.page/r/CUyL9wDolv04EAI/review
As always, thank you so much for being a part of the Fuel Manager Services, Inc. family, and we look forward to making this the best year yet!
“Celebrating 30-years of Service Excellence”
“To give real service you must add something which cannot be bought or measured with money, and that is sincerity and integrity.” ~ Douglas Adams