X

Market Close: May 15 Up, Diesel UP $.0725, Gas UP $.0418

Fueling Strategy: Please fuel as needed today/tonight ~Be Safe

NMEX Crude      $  71.11 UP $1.0700

NYMEX ULSD     $2.3780 UP $0.0725

NYMEX Gas       $2.4720 UP $0.0418

NEWS

June WTI crude oil on Monday closed up +1.07 (+1.53%), and June RBOB gasoline closed up +4.18 (+1.72%).  Crude oil and gasoline prices Monday shook off early losses and closed moderately higher.  A weaker dollar Monday gave energy prices a boost along with expectations for U.S. fuel demand to increase this Memorial Day holiday.  However, gains in crude were limited as the ongoing U.S. debt-ceiling negotiations inject a risk-off sentiment in asset markets.

The outlook for stronger U.S. fuel demand is bullish for crude prices.  AAA is forecasting that as many as 42.3 million Americans will travel 50 miles or more from home this Memorial Day weekend, up +7% y/y and the third-busiest Memorial Day on record.

Crude has support on reduced Canadian crude output after wildfires in Alberta halted about 145,000 bpd of crude production from several Canadian crude producers.  Extreme heat in western Canada sparked additional wildfires over the weekend, with 90 active wildfires in Alberta as of Monday morning, with 23 still considered out of control.

A bullish factor for crude was U.S. Energy Secretary Granholm’s comment last Thursday that the U.S. aims to start buying crude to refill the SPR after the conclusion of a 26 million bbl sale of SPR crude is scheduled to finish in late June.

In a bearish factor, Vortexa reported Monday that the amount of crude stored on tankers that have been stationary for at least a week rose +9% w/w to 86.69 million bbl in the week ended May 12.

Signs of stronger Chinese fuel demand are supportive for crude prices after China’s Ministry of Culture and Tourism reported on May 4 that the number of domestic trips made over the five-day Golden Week holidays reached 274 million, up +19% from the pre-pandemic level in 2019 and almost +71% higher than last year.

The ongoing halt of Iraqi crude exports from the Turkish port of Ceyhan is tightening global oil supplies and is bullish for crude prices.  The Turkish government said it wants to negotiate a $1.5 billion settlement that it has been ordered to pay before allowing Iraqi crude exports to resume through its pipeline.  Oil exports of 500,000 bpd from the Turkish port of Ceyhan have been halted since March 25 after Iraq won an arbitration case from the International Chamber of Commerce that said Turkey violated a 1973 pipeline transit agreement by allowing crude from the Kurdish region to be exported without Iraqi government consent.

Crude oil prices are being undercut by signs that Russia has not delivered on its threat to cut crude output.  Tanker-tracking data from Bloomberg shows Russia’s crude exports jumped above 4 million bpd in the week of April 28.  Russia has halted the publication of crude and condensate production data in an attempt to disguise if it has actually cut crude output.

Crude prices surged on April 3 after OPEC+ announced a surprise oil production cut of more than 1 million bpd starting May 1.  Saudi Arabia said the cuts were a “precautionary measure aimed at supporting the stability of the oil market.”  OPEC Mar crude production fell by -80,000 bpd to 29.16 million bpd.

Last Wednesday’s EIA report showed that (1) U.S. crude oil inventories as of May 5 were -1.2% below the seasonal 5-year average, (2) gasoline inventories were -6.8% below the seasonal 5-year average, and (3) distillate inventories were -16.1% below the 5-year seasonal average.  U.S. crude oil production in the week ended May 5 was unchanged w/w to 12.3 million bpd, only 0.8 million bpd (-6.1%) 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 May 12 fell by -2 to an 11-month low of 586 rigs, falling further below the 2-1/2 year high of 627 rigs posted on December 2.  U.S. active oil rigs have more than tripled from the 17-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

JUNE 15 TO JUNE 18, 2023

JULY  22 TO JULY 30, 2023

 

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”

www.FuelManagerServices.com

 

“To give real service you must add something which cannot be bought or measured with money, and that is sincerity and integrity.” ~ Douglas Adams

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.