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Market Close: June 28 Down

Fuel Strategy: Please fuel as needed today/tonight, Prices are down 1.5 cents – Be Safe
NYMEX Crude    $ 72.91 DN $1.1400
NYMEX ULSD     $2.1182 DN $0.0311
NYMEX Gas       $2.2166 DN $0.0473
NEWS

Oil fell the most in a week with the market expecting OPEC+ producers to increase supply at an upcoming meeting at a time when the delta variant is threatening to slow a recovery in demand.

Futures in New York closed 1.5% lower. The Organization of Petroleum Exporting Countries and its allies will meet Thursday, when they may decide to boost output by 500,000 to 1 million barrels a day in August, according to a RBC Capital Markets report. Meanwhile, the spread of the more infectious delta variant of the coronavirus is resulting in renewed lockdowns across parts of Asia and Australia.

The coalition “will answer the call to put more barrels on the market,” said Helima Croft, head of global commodity strategy at RBC Capital Markets, in the report. “This modest turn of the taps should be palatable to all the parties involved,” and will be “well-received” by the Biden White House, she added.

U.S. crude futures are up more than 10% so far this month with progress in Covid-19 vaccination campaigns and reopenings underpinning an ongoing global demand rebound. Whether it’s in the North Sea, the Cushing storage hub in Oklahoma, or the Middle East, futures and swaps in the world’s leading pricing locations are trading deep in a pattern called backwardation, showing how traders are willing to pay big premiums to secure physical barrels. Key benchmark crude timespreads eased somewhat Monday with exports at a major Norwegian oil field set to rise to a record.

Saudi Arabia has maintained discipline toward relinquishing supply back into the market. The 23-nation alliance has restored roughly 40% of the almost 10 million barrels of daily production it shuttered when demand collapsed last year at a tightly controlled pace to avoid outpacing demand growth.

Still, the path to recovery continues to be a jagged one and remains susceptible to viral outbreaks dampening demand. With the spread of the variant, “we believe OPEC+ should take an even more cautious approach, only raising production by 100,000 to 200,000 barrels per day, month-on-month in August,” said Louise Dickson, oil markets analyst at Rystad Energy, in a note.

Cases of the delta variant have surged across Europe and Asia in recent weeks, leading to new travel and movement restrictions. The U.K. on Monday reported the most new Covid-19 cases since January, and Hong Kong, Spain and Portugal all imposed new restrictions to visitors from the U.K. At the same time, authorities are racing to contain outbreaks in Australia.
Meanwhile, the possibility of Iranian barrels returning to international markets was potentially complicated after U.S. forces conducted air strikes Sunday against Iran-backed militias in Iraq. The militias are responsible for attacks against American facilities in Iraq, the Defense Department said.
Have a Great Day,
Loren R Bailey, President
Fuel Manager Services Inc.
“Serving the trucking industry since 1992”
Office: 479-846-2761
Cell: 479-790-5581
www.FuelManagerServices.com
www.owneroperatoradvisoryservice.com
“To give real service you must add something which cannot be bought or measured with money, and that is sincerity and integrity.”
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.