Fueling Strategy: Please fuel as needed tonight, Thursday prices will go up 2 cents. Friday prices will remain unchanged ~ Be Safe
NMEX Crude $ 87.27 DN $2.0800
NYMEX ULSD $3.9328 UP $0.0020
NYMEX Gas $2.6303 UP $0.0030
NEWS
Oil flopped for a third day after a key US inflation metric beat estimates, piling onto worries that the US Federal Bank will continue interest rate hikes.
West Texas Intermediate futures settled at $87.27 a barrel on Wednesday as inflation reports compounded forecasts of lower crude demand. Prices paid to US producers rose more than expected last month, a worrisome sign for investors indicating that more rate hikes are likely ahead to slow down global growth.
Federal Reserve officials said Wednesday that they would raise rates to a restrictive level and hold them there. Traders are still expecting a 75 basis point hike next month. “Inflation is still on most traders’ agenda, and with the economy still showing inflationary tendencies, ideas of higher interest rates are causing a move back to the sidelines which is pressuring the front month futures,” said Dennis Kissler, senior vice president at Bok Financial Securities.
Earlier in the session, the Organization of Petroleum Exporting Countries reduced forecasts for the amount of its crude that will be needed in the current quarter, making the case for the contentious supply cut announced by the group and its allies last week.
Meanwhile, the US, which will need to help fill the gaps created by OPEC+’s reduction, pared back its 2023 supply and demand estimates, according to a US Energy Information Administration report Wednesday. The International Energy Agency will release its monthly outlook this week, shedding further light on demand trends into 2023 and the likely impact of sanctions on Russian crude flows.
US Deputy Treasury Secretary Wally Adeyemo said countries already are trying to secure contracts to buy Russian oil before European Union sanctions take effect on Dec. 5, Reuters reported. “One big aspect of the bull case for oil prices is a meaningful loss of Russian supplies, especially as we stare down that Dec. 5th deadline,” said John Kilduff, founding partner at Again Capital. “That’s what’s getting everybody kind of spooked. But to the extent we’re going to see those supplies maintained and stay on the market — and it looks like we are — that’s a big bearish element for the market.”
Crude rallied last week after the OPEC+ grouping agreed to cut oil supply. Still, the market’s focus remains on the health of the global economy as aggressive rounds of interest rate increases dampen the outlook for growth.
As banks adjusted to the shifting outlook, RBC Capital Markets warned that global benchmark Brent could sink into the low $60s in 2023 in the event of a deep recession. It also outlined two more-benign scenarios, while cautioning that given the cross-currents, “nailing an oil price is an exercise in futility.”
Have a Great Day,
Loren R Bailey, President
Office: 479-846-2761
Cell: 479-790-5581
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.owneroperatoradvisoryservice.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