Fueling Strategy: Please “FUEL AS NEEDED” today/tonight ~ Be Safe
NMEX Crude $ 78.61 UP $.0037
NYMEX ULSD $2.4661 UP $.0227
NYMEX Gas $2.5802 UP $.0331
NEWS
June WTI crude oil on Monday closed up +0.37, and June RBOB gasoline closed up +3.31. Crude oil and gasoline prices on Monday settled moderately higher. Sunday’s action by Saudi Arabia to raise crude prices for delivery next month for Asian customers signals confidence in global energy demand and is bullish for crude prices. Also, Monday’s rally in the S&P 500 to a 3-week high shows confidence in the economic outlook that is positive for energy demand and crude prices. Crude oil prices initially fell back Monday after Hamas said it would agree to a cease-fire proposal by Qatar and Egypt, although oil prices then gained after the close when Israel rejected that cease-fire proposal.
In a bullish factor for crude oil prices, Saudi Arabia’s state-owned Aramco Sunday raised crude prices for June delivery to Asian customers by 90 cents a barrel, above the consensus of 60 cents. Concerns about the intensification of the Hamas-Israel conflict are supportive of crude prices. Israel’s military has begun telling civilians to move out of Rafah, a possible sign that Israel will soon launch military operations in the city.
Reduced crude oil in floating storage is bullish for prices. Monday’s weekly data from Vortexa showed that the amount of crude oil held worldwide on tankers that have been stationary for at least a week fell -14% w/w to 57.76 million bbl as of May 3.
Reduced crude demand in India, the world’s third-largest crude consumer, is negative for oil prices after India’s March oil demand fell -0.6% y/y to 21.09 MMT.
Crude prices have underlying support from the Israel-Hamas war and concern that the war might spread to Hezbollah in Lebanon or even to a direct conflict with Iran. Also, 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.
Crude has support from the recent Ukrainian drone attacks on Russian refineries that damaged several Russian oil processing facilities, limiting Russia’s fuel exporting capacity. Russia’s fuel exports in the week to April 28 fell by -120,000 bpd from the prior week to 3.43 million bpd. JPMorgan Chase said it sees 900,000 bpd of Russian refinery capacity that could be offline “for several weeks if not months” from the attacks, adding $4 a barrel of risk premium to oil prices.
Crude prices have support from April 3 when OPEC+, at its monthly meeting, did not recommend any changes to their existing crude output cuts, which kept about 2 million bpd of production cuts in place until the end of June. However, OPEC crude production in March rose +10,000 bpd to 26.860 million bpd, a bearish factor for oil prices as Iraq and UAE continue to pump above their production quotas.
Last Wednesday’s EIA report showed that (1) US crude oil inventories as of April 26 were -2.6% below the seasonal 5-year average, (2) gasoline inventories were -3.2% below the seasonal 5-year average, and (3) distillate inventories were -6.9% below the 5-year seasonal average. US crude oil production in the week ending April 26 was unchanged w/w at 13.1 million bpd, below the recent record high of 13.3 million bpd.
Baker Hughes reported last Friday that active US oil rigs in the week ended May 3 fell by -7 rigs to 499 rigs, modestly above the 2-year low of 494 rigs posted on November 10. The number of US oil rigs has fallen over the past year from the 4-year high of 627 rigs posted in December 2022.
Fueling Strategy: Please “FUEL AS NEEDED” today/tonight, Prices are down 7 cents, Saturday look for another penny drop ~ Please Be Safe
NMEX Crude $ 77.99 DN $.9600
NYMEX ULSD $2.4422 DN $.0009
NYMEX Gas $2.5500 DN $.0465
NEWS
June WTI crude oil on Friday closed down -0.96, and June RBOB gasoline closed down -4.65. Crude oil and gasoline prices Friday were under pressure the entire day and posted 1-1/2 month lows. Improved prospects for a cease-fire in the Israeli-Hamas war have curbed geopolitical risks in the Middle East and undercut crude prices. Also, US energy demand concerns are negative for crude due to Friday’s weaker-than-expected economic reports on Apr nonfarm payrolls and the Apr ISM services index. Limiting losses in crude was Friday’s fall in the dollar index, which fell to a 3-week low.
Easing geopolitical tensions reduces the risk premium for crude and is bearish for prices. Hamas said on Friday that it was studying the current cease-fire proposal and plans to send a delegation to Egypt to continue negotiations. The improved cease-fire prospects reduce the chances of an escalation of the Israel-Hamas conflict that could jeopardize crude shipments from the Middle East.
Friday’s weaker-than-expected US economic news is bearish for energy demand and crude prices. Apr nonfarm payrolls rose +175,000, below expectations of +240,000 and the smallest increase in 6 months. Also, the Apr ISM services index unexpectedly fell -2.0 to 49.4, weaker than expectations of a rise to 52.0 and the steepest pace of contraction in 16 months.
Fueling Strategy: Please “PARTIAL FILL ONLY” today/tonight, Friday prices will drop 7 cents ~ Please Be Safe
NMEX Crude $ 78.95 DN $.0500
NYMEX ULSD $2.4453 DN $.0066
NYMEX Gas $2.5924 UP $.0149
NEWS
June WTI crude oil on Thursday closed down -0.05 , and June RBOB gasoline closed +1.91.
Crude oil and gasoline prices settled mixed on Thursday, with crude posting a new 1-1/2 month low. Crude prices are under pressure due to the potential for a cease-fire between Israel and Hama, which eases concerns about the escalation of the conflict and possible disruptions to Middle East crude supplies. Crude also has a negative carryover from Wednesday, when weekly EIA crude inventories unexpectedly rose to a 10-month high. However, crude recovered from its worst levels Thursday, and gasoline pushed into positive territory after the dollar index (DXY00) dropped to a 2-1/2 week low. Easing geopolitical tensions reduces the risk premium for crude and is bearish for prices. The prospects for a cease-fire between Hama and Israel were bolstered today after Hamas said it was studying the current cease-fire proposal with a “positive spirit.”
Crude garnered some support Thursday after the Organization for Economic Cooperation and Development (OECD) raised its 2024 global growth forecast to +3.1% from +2.9% in February, a positive development for energy demand.
A decrease in crude in floating storage is bullish for prices. Monday’s weekly data from Vortexa showed that the amount of crude oil held worldwide on tankers that have been stationary for at least a week fell -17% w/w to 62.83 million bbl as of April 26.
Fueling Strategy: Please “PARTIAL FILL ONLY” today/tonight, Thursday prices will drop 1.5 cent ~ Please Be Safe
NMEX Crude $ 79.00 DN $2.9300
NYMEX ULSD $2.4595 DN $0.0681
NYMEX Gas $2.5774 DN $0.1138
NEWS
June WTI crude oil on Wednesday closed down -2.93, and June RBOB gasoline closed down -11.38. Crude and gasoline prices Wednesday tumbled to 1-1/2 month lows and closed sharply lower. Crude prices are under pressure due to the potential for a cease-fire between Israel and Hama, which eases concerns about the escalation of the conflict and possible disruptions to Middle East crude supplies. Losses in crude accelerated Wednesday after weekly EIA crude inventories unexpectedly rose to a 10-month high.
Wednesday’s US economic news was mixed for energy demand and crude prices. On the negative side, Mar JOLTS job openings fell -325,000 to a 3-year low of 8.488 million, showing a weaker labor market than expectations of 8.680 million. Also, the Apr ISM manufacturing index fell -1.1 to 49.2, weaker than expectations of 50.0. In addition, Mar construction spending unexpectedly fell -0.2% m/m, weaker than expectations of a +0.3 % m/m increase. On the positive side, the Apr ADP employment change rose +192,000, stronger than expectations of +183,000.
A decrease in crude in floating storage is bullish for prices. Monday’s weekly data from Vortexa showed that the amount of crude oil held worldwide on tankers that have been stationary for at least a week fell -17% w/w to 62.83 million bbl as of April 26.
Reduced crude demand in India, the world’s third-largest crude consumer, is negative for oil prices after India’s March oil demand fell -0.6% y/y to 21.09 MMT.
Fueling Strategy: Please “FUEL AS NEEDED” today/tonight ~ Be Safe
NMEX Crude $ 82.63 DN $1.2200
NYMEX ULSD $2.5368 DN $0.0114
NYMEX Gas $2.7308 DN $0.0131
NEWS
June WTI crude oil on Monday closed down -1.22, and June RBOB gasoline closed down -1.31. Crude and gasoline prices posted moderate losses on Monday. Crude prices Monday were under pressure on an easing of Middle East tensions. The prospects for a cease-fire in the Hamas-Israel war have improved, undercutting the geopolitical risk premium in crude prices. Losses in crude were limited due to a weaker dollar and a rally in stocks, which bolsters optimism in the economic outlook that is supportive of energy demand. The prospects for a cease-fire in the Hamas-Israel war have improved, easing geopolitical risks and weighing on crude prices.
The New York Times reported Monday that Israel reduced the number of hostages that it wants Hamas to free during the first phase of a new truce in Gaza to 33 from 40, according to three Israeli officials. The shift has raised expectations that Hamas and Israel might be edging closer to a cease-fire.
Strength in the crude crack spread is bullish for crude prices. The crack spread on Monday rose to a 1-1/2 week high, encouraging refiners to boost their crude purchases and refine the crude into gasoline and distillates.
A decrease in crude in floating storage is bullish for prices. Monday’s weekly data from Vortexa showed that the amount of crude oil held worldwide on tankers that have been stationary for at least a week fell -17% w/w to 62.83 million bbl as of April 26. Reduced crude demand in India, the world’s third-largest crude consumer, is negative for oil prices after India’s March oil demand fell -0.6% y/y to 21.09 MMT.
Crude prices have underlying support from the Israel-Hamas war and concern that the war might spread to Hezbollah in Lebanon or even to a direct conflict with Iran. Also, 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.
Crude has support from the recent Ukrainian drone attacks on Russian refineries that damaged several Russian oil processing facilities, limiting Russia’s fuel exporting capacity. Russia’s fuel exports in the week to April 21 fell by -500,000 bpd from the prior week to 3.45 million bpd. JPMorgan Chase said it sees 900,000 bpd of Russian refinery capacity that could be offline “for several weeks if not months” from the attacks, adding $4 a barrel of risk premium to oil prices.
Fueling Strategy: Please “FUEL AS NEEDED” today/tonight ~ Be Safe
NMEX Crude $ 83.85 UP $.2800
NYMEX ULSD $2.5586 DN $.0018
NYMEX Gas $2.7429 UP $.0096
NEWS
HOUSTON, April 26 (Reuters) – Oil prices settled higher on Friday, garnering support from tensions in the Middle East, but a strong dollar and U.S. inflation data quashed hopes that the Federal Reserve would cut interest rates soon, giving prices a ceiling. Brent crude futures settled up 49 cents, or 0.55%, to $89.50 a barrel. U.S. West Texas Intermediate crude futures settled up 28 cents, or 0.34%, to $83.85 a barrel. Supply concerns supported prices as tensions continue in the Middle East.
Benjamin Netanyahu, Israel’s prime minister, said any rulings by the International Criminal Court, which is investigating Hamas’ Oct. 7 attacks on Israel and Israel’s military assault on Gaza, would not affect Israel’s actions but would “set a dangerous precedent.” As tensions escalate, Israel’s military said on Friday that its air force struck in Lebanon’s West Beqaa District and killed a militant who advanced attacks against Israel. Israel stepped up air strikes on Rafah on Thursday after saying it would evacuate civilians from city in southern Gaza and launch an all-out assault despite allies’ warnings that doing so could cause mass casualties. “Israel is not afraid to come and support themselves on their own if they have to, people are watching to see what happens between Netanyahu and Biden,” said Tim Snyder, chief economist at Matador Economics. “The geopolitical element is not over, the proxy battles going on right now will continue,” and this is still providing support and helping to offset the negative pressure from the inflationary data, Snyder added.
Meanwhile, macroeconomic pressures capped gains after data released on Friday showed growing inflation. In the 12 months through March, U.S. inflation rose 2.7% after an advance of 2.5% in February. Last month’s increase was broadly in line with economists’ expectations. The Fed has a 2% inflation target. The U.S. central bank is expected to leave rates unchanged at its policy meeting next week. “The economic data this morning was enough for market participants to conclude that the Fed is not going to be forthcoming with interest rate cuts any time soon,” said John Kilduff, partner with Again Capital LLC. “Geopolitical jitters in the market are what is keeping us aloft. Those two competing forces should keep us in check,” Kilduff added.
U.S. Treasury Secretary Janet Yellen told Reuters on Thursday that U.S. GDP growth for the first quarter could be revised higher, and inflation will ease after a clutch of “peculiar” factors held the economy to its weakest showing in nearly two years. U.S. economic growth was likely stronger than suggested by the weaker quarterly data, Yellen said. Oil prices have flip-flopped since Yellen’s comments and the release of the inflation data on Friday.
Meanwhile, the dollar soared to a fresh 34-year high against the yen on Friday, bolstered in part by the U.S. inflation data. “Dollar strength is helping to exert negative pressure today,” Kilduff said.
Elsewhere, OPEC Secretary General Haitham Al Ghais said in an op-ed article that the end of oil is not in sight, as the pace of energy demand growth means that alternatives cannot replace it at the needed scale, and the focus should be on cutting emissions not oil use.
Fueling Strategy: Please “PARTIAL FILL ONLY” today/tonight, Thursday prices will drop 2 cents ~ Please Be Safe
NMEX Crude $ 83.78 UP $.9700
NYMEX ULSD $2.5662 UP $.0065
NYMEX Gas $2.7398 UP $.0311
NEWS – Key Points
Oil prices could average $102 per barrel if a major conflict in the Middle East breaks out involving one or more oil producers, according to the World Bank.
An oil price shock of this magnitude could stall the fight against global inflation almost entirely, according to the bank.
“A key force for disinflation — falling commodity prices — has essentially hit a wall,” the World Bank’s chief economist said.
The outbreak of a major conflict in the Middle East could trigger an energy shock that pushes oil prices above $100 a barrel, fuels inflation and results in higher interest rates for longer, the World Bank warned Thursday. Tensions in the Middle East reached a boiling point earlier this month as Israel and OPEC member Iran appeared on the brink of war, raising fears that crude oil supplies could be disrupted as a consequence.
The governments in Jerusalem and Tehran appear to have decided against escalation after exchanging direct strikes on each other’s territory for the first time. Oil prices have pulled back nearly 4% from recent highs as investors have discounted the probability of a wider war in the region. The World Bank, however, cautioned that the situation remains uncertain. “The world is at a vulnerable moment: A major energy shock could undermine much of the progress in reducing inflation over the past two years,” said World Bank Chief Economist Indermit Gill. Oil prices could average $102 per barrel if a conflict involving one or more oil producers in the Middle East results in a supply disruption of 3 million barrels per day, according to the World Bank’s latest commodity markets outlook report. An price shock of this magnitude could stall the fight against inflation almost entirely, according to the report.
Global inflation cooled by 2% between 2022 and 2023 largely due to commodity prices plunging nearly 40%, according to the World Bank. Commodity prices are now plateauing with the global financial institution forecasting modest declines of 3% this year and 4% in 2025. “Global inflation remains undefeated,” Gill said. “A key force for disinflation — falling commodity prices — has essentially hit a wall. That means interest rates could remain higher than currently expected this year and next.” While the conflict in the Middle East presents upside pricing risks, the world could see relief if OPEC+ decides to start unwinding its production cuts this year. Oil prices would fall to an average $81 a barrel if the cartel brings 1 million barrels per day back onto the market in the second half of the year, according to the World Bank.
