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Market Close: Sep 06 Diesel Down $.0269, Gas Up $.0204

Fueling Strategy: Please “KEEP YOUR TANKS TOPPED” tonight, Thursday prices will JUMP UP 11.5 cents ~Be Safe

 

NMEX Crude      $ 87.54 UP $.8500

NYMEX ULSD     $3.1927 DN $.0269

NYMEX Gas       $2.6014 UP $.0204

NEWS

Oil prices rose a dollar a barrel on Tuesday to their highest since November, after Saudi Arabia and Russia extended their voluntary supply cuts to the end of the year, worrying investors about potential shortages during peak winter demand.

Brent crude futures rose by $1.04, or 1.2%, to settle at $90.04 a barrel, closing above the $90 mark for the first time since November 16, 2022. U.S. West Texas Intermediate crude (WTI) futures gained $.85, or 1.0%, to settle at $87.54 a barrel, also a 10-month high.

Investors had expected Saudi Arabia and Russia to extend voluntary cuts into October, but the three-month extension was unexpected. “This is a clear indication that oil prices trump volume (for Saudi Arabia),” said Jorge Leon, senior vice president at Rystad Energy. “These bullish moves significantly tighten the global oil market and can only result in one thing: higher oil prices worldwide,” Leon added. Both Saudi Arabia and Russia said they would review the supply cuts monthly, and could modify them depending on market conditions. “With the production cut extended, we anticipate a market deficit of more than 1.5 million barrels per day in 4Q23,” UBS analyst Giovanni Staunovo wrote in a note to clients. UBS now expects Brent crude to rise to $95 a barrel by year-end.

Reflecting concerns about the short-term market supply, front month Brent and WTI contracts were also trading at their steepest premium since November to later-dated prices. This structure, called backwardation, indicates tightening supply for prompt deliveries. Also supporting oil prices on Tuesday, Goldman Sachs said it now sees the probability of a U.S. recession starting in the next 12 months at 15%, down from an earlier forecast of 20%. Along with the Saudi supply cuts, which began in July, prospects of the U.S. economy avoiding a hard recession have helped lift oil demand and prices in recent months.

Both Brent and WTI futures have gained more than 20% since the end of June.

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Loren R Bailey, President

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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.