Market Close: July 15 MIXED, Diesel UP $.0040, Gas DN $.0237
Jul 16th, 2024 by loren
Fueling Strategy: Please “FUEL AS NEEDED TODAY/TONIGHT” Prices will go up less than 1/2 cents Wednesday~ Be Safe
NYEX Crude $ 81.91 DN $.3000
NYMEX ULSD $2.5136 UP $.0040
NYMEX Gas $2.4916 DN $.0237
NEWS
LONDON, July 16 (Reuters) – Oil prices declined more than 1% on Tuesday on worries of a slowing Chinese economy crimping demand and despite a growing consensus the U.S. Federal Reserve could begin cutting its key interest rate as soon as September. Brent futures were down $1.31, or 1.54%, to $83.54 a barrel at 1317 GMT, while U.S. West Texas Intermediate (WTI) crude was down $1.41, or 1.72%, to $80.50.
The weaker Chinese economic data “cast some doubts on whether market participants are being overly optimistic” regarding China’s oil demand outlook, IG market strategist Yeap Jun Rong wrote in an email.
The world’s second-largest economy grew 4.7% in April-June, official data showed, its slowest rate since the first quarter of 2023 and missing a 5.1% forecast in a Reuters poll. It slowed from the previous quarter’s 5.3% expansion, hamstrung by a protracted property downturn and job insecurity.
“Its 2Q GDP and retail sales figures had surprised on the downside by a significant margin, while anticipation for stronger stimulus measures at the Third Plenum may face the risk of disappointment,” Yeap added, referring to a key economic leadership meeting in Beijing this week.
n the U.S., Fed Chair Jerome Powell said on Monday the three U.S. inflation readings over the second quarter of this year “add somewhat to confidence” that the pace of price increases is returning to the central bank’s target in a sustainable fashion, remarks which market participants interpreted as indicating that a turn to interest rate cuts may not be far off.
Lower interest rates decrease the cost of borrowing, which can boost economic activity and oil demand.
Some analysts cautioned about being overly bullish as expected weakness in some macroeconomic data from the U.S. could still indirectly hurt oil demand in the near term.
“Macro factors are not in favour of higher oil prices in the near term (capped below $85/barrel for WTI crude) due to the prospect of weaker U.S. retail sales for June that are due later today,” OANDA senior market analyst Kelvin Wong wrote in an email.
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