Fueling Strategy: Prices are down 5 cents today, Please “KEEP YOUR TANKS TOPPED TODAY/TONIGHT” ahead of Saturday’s price MOVE UP of 1 Cents ~ Be Safe Today
NYEX Crude $ 69.15 DN $.0500
NYMEX ULSD $2.1689 UP $.0114
NYMEX Gas $1.9258 DN $.0360
NEWS
Oct WTI crude oil Thursday closed down -0.05 (-0.07%), and Oct RBOB gasoline closed down -3.60 (-1.84%). Crude oil and gasoline prices settled lower on Thursday, with crude posting an 8-3/4 month nearest-futures low and gasoline falling to a 2-3/4 year nearest-futures low. Energy demand concerns undercut crude prices after Thursday’s US Aug ADP employment report showed employers added the fewest jobs in 3-1/2 years. Losses in crude were limited due to a weak dollar. Also, short-covering emerged in crude Thursday after OPEC+ agreed to pause its planned crude production increase for two months. In addition, crude found support Thursday after weekly EIA crude inventories fell more than expected to an 11-month low.
Thursday’s global economic news was mixed for energy demand and crude prices. On the negative side, the US Aug ADP employment change rose +99,000, weaker than expectations of +145,000 and the smallest increase in 3-1/2 years. Also, Eurozone Jul retail sales rose +0.1% m/m, weaker than expectations of +0.2% m/m. On the positive side, the US Aug ISM services index unexpectedly rose +0.1 to 51.5, stronger than expectations of no change at 51.4. Also, German Jul factory orders unexpectedly rose +2.9% m/m, stronger than expectations of a -1.7% m/m decline.
Crude prices found support Thursday after OPEC+ agreed to pause its scheduled crude production hike of 180,000 bpd in October and November after crude prices tumbled to an 8-3/4 month low Wednesday amid fragile global energy demand.
Crude oil prices also have negative carryover from Tuesday when 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.
A supportive factor for crude is a decrease in Russian crude exports. Weekly vessel-tracking data from Bloomberg showed Russian crude exports fell by +-25,000 bpd to 3.1 million bpd in the week to September 1. Meanwhile, increased Russian crude production is negative for oil prices after Russia’s Energy Ministry reported on August 23 that Russia’s July crude production was 9.045 million bpd, about 67,000 bpd above the output target it agreed to with OPEC+.
A decline in crude oil held worldwide on tankers is bullish for prices. Vortexa reported Monday that crude oil stored on tankers that have been stationary for at least seven days fell by -14% w/w to 52.99 million bbl in the week ended August 30, the lowest in 4-1/2 years.
Have a Great Day!
Loren R Bailey, President
Office: 479-846-2761
Cell: 479-790-5581
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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 31-years of Service Excellence”
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