Sep 04 – Fueling Strategy: Please, if possible, “PARTIAL (35 max gallons) FILL ONLY TODAY/TONIGHT” Prices will DROP 7 cents after midnight tonight (Thursday)!! ~ Be Safe Today!
NYEX Crude $ 70.34 DN $3.2100
NYMEX ULSD $2.2060 DN $0.0723
NYMEX Gas $1.9777 DN $0.1155
NEWS
Oct WTI crude oil Tuesday closed down -3.21 (-4.36%), and Oct RBOB gasoline closed down -11.55 (-5.52%).
Crude oil and gasoline prices plunged Tuesday, with crude falling to an 8-month low and gasoline falling to a 2-3/4 year nearest-futures low. Tuesday’s rally in the dollar index to a 2-week high is bearish for energy prices. Also, global energy demand concerns weighed on crude prices after Chinese and US manufacturing activity contracted more than expected. Losses in crude oil accelerated Tuesday after a Libyan central banker said that a deal appears imminent to resume the country’s crude oil production.
Tuesday’s global economic news was bearish for energy demand and crude prices. The US Aug ISM manufacturing index rose +0.4 to 47.2, weaker than expectations of 47.5. The Aug ISM price paid sub-index unexpectedly rose +1.1 to 54.0 versus expectations of a decline to 52.0. Also, US July construction spending unexpectedly fell -0.3% m/m, weaker than expectations of a +0.1% m/m increase and the biggest decline in 1-3/4 years. In addition, the China Aug manufacturing PMI unexpectedly fell -0.3 to a 6-month low of 49.1, weaker than expectations of an increase to 49.5.
Crude oil prices were undercut Tuesday after Libyan central bank governor Sadiq Al-Kibir said there are “strong” indications that political factions are nearing an agreement to overcome political differences and resume the country’s crude oil production. Last week, Libya’s eastern government declared force majeure on all oil fields, terminals, and crude export facilities as it called for a halt to all crude production and exports due to political conflict over who controls the country’s central bank and oil revenues. The halt to Libya’s crude exports threatened to remove more than 1 million bpd of crude from the global market.
Oil prices have some support from concern that an escalation of conflict in the Middle East could disrupt oil supplies. Israel’s military continues to conduct operations in Gaza, and there is the continued risk that the war might spread to Hezbollah in Lebanon or even to a direct conflict with Iran. Meanwhile, ongoing attacks on commercial shipping in the Red Sea by Iran-backed Houthi rebels have forced shippers to divert shipments around the southern tip of Africa instead of going through the Red Sea, disrupting global crude oil supplies.
In a bearish factor, increased Russian crude exports have boosted global supplies. Weekly vessel-tracking data from Bloomberg showed Russian crude exports rose by +390,000 bpd to 3.35 million bpd in the week to August 25, the highest in nearly two months. Meanwhile, increased Russian crude production is also negative for oil prices after Russia’s Energy Ministry reported last Friday that Russia’s July crude production was 9.045 million bpd, about 67,000 bpd above the output target it agreed to with OPEC+.
Have a Great Day!
Loren R Bailey, President
Office: 479-846-2761
Cell: 479-790-5581
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