Fueling Strategy: Please “PARTIAL FILL ONLY” tonight, Thursday prices will drop another 5 cents ~ Please Be Safe
NMEX Crude $ 86.25 UP $1.0200
NYMEX ULSD $2.7156 UP $0.0386
NYMEX Gas $2.7832 UP $0.0276
NEWS
May WTI crude oil on Wednesday closed up +1.02, and May RBOB gasoline closed up +2.76. Crude and gasoline prices Wednesday recovered from early losses and posted moderate gains after US intelligence said it believes a major missile or drone strike is imminent by Iran or its proxies against military and government targets in Israel. Iran has said it will launch some type of attack on Israeli assets as revenge for the recent Israel airstrike on Iran’s consulate in Syria that killed some top Iranian military commanders. An escalation of hostilities in the Middle East could lead to the disruption of crude supplies from the region.
Crude prices Wednesday initially moved lower, with crude falling to a 1-week low after the dollar index soared to a 4-3/4 month high. Also, today’s slump in the S&P 500 to a 3-week low undercuts confidence in the economic outlook, which is bearish for energy demand and crude prices. In addition, Wednesday’s weekly EIA crude inventories rose more than expected to a 9-month high. 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 $ 86.51 DN $.4100
NYMEX ULSD $2.7261 DN $.0473
NYMEX Gas $2.7499 DN $.0387
NEWS
May WTI crude oil on Monday closed down -0.48, and May RBOB gasoline closed down -3.87. Crude and gasoline prices Monday posted moderate losses as geopolitical risks in the Middle East eased slightly after Israel said it would remove some of its troops from Gaza. Losses in crude were limited Monday by a weak dollar and reports that there has been no progress in ceasefire negotiations between Hamas and Israel. Also, tensions remain high between Israel and Iran after Iran vowed revenge on Israel for an airstrike on Iran’s consulate in Syria that killed some top Iranian military commanders. 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.
Last Friday’s action by Saudi Arabia to raise oil prices more than expected is a supportive factor for crude. State-owned Saudi Aramco raised the price of its Arab Light crude to Asian customers for May delivery by +30 cents/bbl, above expectations of +10 cents/bbl. Crude prices have carryover support from last Wednesday 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. 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. Bloomberg calculations show Russian refiners processed 5.03 million bpd of crude during March 14-20, down -400,000 bpd from the average for the first 13 days of March and the lowest in 10 months. 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.
However, the disruption to Russian refiners has yet to affect Russian fuel exports because of the large number of Russian ships at sea transporting crude. Russia’s fuel exports in the week to March 31 rose +270,000 bpd from the prior week to 3.74 million bpd, the year’s highest level. A decline 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 65.30 million bbl as of April 5. The recent strength of Chinese crude oil demand is bullish for prices. Recent government data showed that China processed a record 118.76 MMT of crude in January and February, up +3% from the same time last year. Also, Chinese fuel demand jumped, with expressway passenger volumes 54% higher than 2019 levels, while airlines saw 19% more people than the pre-pandemic peak.
Crude prices have underlying support from the Israel-Hamas war and concern that all-out war might spread to Lebanon. Hezbollah and Israel have traded fire almost daily since the Israel-Hamas war erupted on October 7. Also, the US and UK have engaged in airstrikes against Houthi rebels in Yemen in retaliation for Houthi attacks on commercial shipping in the Red Sea. 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.
Last Wednesday’s EIA report showed that (1) US crude oil inventories as of March 29 were -2.9% below the seasonal 5-year average, (2) gasoline inventories were -2.9% below the seasonal 5-year average, and (3) distillate inventories were -6.7% below the 5-year seasonal average. US crude oil production in the week ending March 29 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 April 5 rose by +2 rigs to 508 rigs, moderately 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 3-3/4 year high of 627 rigs posted in December 2022.
Fueling Strategy: Please “KEEP YOUR TANKS TOPPED TODAY/TONIGHT, Saturday prices will go up another 1 Cent then Sunday prices will continue upward 3+ Cents ~ Be Safe
NMEX Crude $ 86.70 UP $.3200
NYMEX ULSD $2.7730 UP $.0317
NYMEX Gas $2.7886 DN $.0056
NEWS
May WTI crude oil on Friday closed up +0.32 (+0.37%), and May RBOB gasoline closed down -0.56 (-0.20%). Crude and gasoline prices on Friday settled mixed, with crude posting a 5-1/4 month high as escalating tensions in the Middle East could lead to oil supply disruptions. Iran has vowed revenge on Israel for an airstrike on its embassy in Syria that killed top Iranian military commanders, raising fears that the Israel-Hamas war could more directly involve Iran. Strength in the dollar Friday limited gains in crude and knocked gasoline prices into negative territory.
Friday’s better-than-expected US payroll report signals strength in the economy that supports energy demand and crude prices. US Mar nonfarm payrolls rose +303,000, stronger than expectations of +214,000 and the biggest increase in 10 months. Friday’s action by Saudi Arabia to raise oil prices more than expected is a supportive factor for crude. State-owned Saudi Aramco raised the price of its Arab Light crude to Asian customers for May delivery by +30 cents/bbl, above expectations of +10 cents/bbl.
Crude prices have carryover support from Wednesday 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.
Fueling Strategy: Please “KEEP YOUR TANKS TOPPED TODAY/TONIGHT, Friday prices will jump UP another 2 Cents ~ Be Safe
NMEX Crude $ 86.59 UP $1.1600
NYMEX ULSD $2.7413 UP $0.0089
NYMEX Gas $2.7942 UP $0.0333
NEWS
The oil market has quietly assembled an impressive $15.00 per barrel rally. The lack of fanfare can likely be attributed to the lack of volatility. There were days in 2022 when oil jumped or collapsed from $10.00 to $15.00 in a single trading session, yet the run from $70.00 to $85.00 took about three months. These slow grinding rallies are generally not to be sold into (been there and done that, don’t do it).
The slow and steady price increase has occurred without much help from speculators. According to the COT Report (Commitments of Traders) issued by the CFTC (Commodity Futures Trading Commission), large speculators (known as the smart money) are holding a net long position of about 250,000; this pales in comparison to the all-time-high position of over 700,000. Our takeaway from this data is that plenty of sidelined speculator money might start getting FOMO (fear of missing out) should the breakout above $84.00 hold on a weekly basis (Friday’s close).
The US is producing and exporting more crude oil now than ever before; as a result, they have picked up more market share and put some pressure on OPEC to tap the brakes on their production cuts. However, as of the last meeting, OPEC has made it clear they have worked too hard to manipulate prices higher to give up now. The cartel affirmed their pledged production cuts and scolded members for cheating (the reductions have been larger on paper than in reality due to some members producing beyond their quotas). Thus, OPEC supply cuts and Russian supply disruptions due to the war offset some of the domestic production over achievements.
We can’t talk about oil prices, and OPEC’s manipulation of those prices, without mentioning the US policy of draining the SPR (Strategic Petroleum Reserve). The US successfully pressured oil prices by releasing stockpiles from the reserve. Just as the OPEC production cuts are effective but obviously temporary, so was the SPR release program. However, the US will not have the same tool at its disposal in the future. In early 2022, the SPR held about six hundred million barrels, it is currently at about 363 million. This isn’t as significant as it appears. The daily global demand for crude oil is about 100 million barrels, so a drawdown from the SPR of 240 million barrels is about two and a half days of usage. The SPR sales weren’t necessarily a game changer for the supply/demand fundamentals, but they successfully thwarted exuberant speculation on higher oil prices and calmed the climate; timing is everything.
Fueling Strategy: Please “KEEP YOUR TANKS TOPPED TODAY/TONIGHT, Thursday prices will jump UP over 9 Cents ~ Be Safe
NMEX Crude $ 85.43 UP $.2800
NYMEX ULSD $2.7324 UP $.0205
NYMEX Gas $2.7609 UP $.0020
NEWS
May WTI crude oil on Wednesday closed up +0.28 (+0.33%), and May RBOB gasoline closed up +0.20 (+0.07%). Crude and gasoline prices Wednesday settled moderately higher, with crude posting a 5-1/4 month high and gasoline posting a 7-month high. A weaker dollar on Wednesday was supportive of energy prices. Crude also rose on Wednesday’s decision by OPEC+ to stick with its crude production cuts until the end of June, which will keep global oil supplies tight. Crude prices fell back from their best levels Wednesday after weekly EIA crude inventories unexpectedly rose to an 8-month high.
Crude prices found support Wednesday after 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. Oil prices have support on concern that the Israel-Hamas war could more directly involve Iran after Iran vowed to retaliate for an Israel airstrike last Friday in Syria that killed top Iranian military commanders.
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. Bloomberg calculations show Russian refiners processed 5.03 million bpd of crude during March 14-20, down -400,000 bpd from the average for the first 13 days of March and the lowest in 10 months. 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. However, the disruption to Russian refiners has yet to affect Russian fuel exports because of the large number of Russian ships at sea transporting crude. Russia’s fuel exports in the week to March 31 rose +270,000 bpd from the prior week to 3.74 million bpd, the year’s highest level.
Fueling Strategy: Please “FUEL AS NEEDED” today/tonight, Wednesday KEEP YOUR TANKS TOPPED, Thursday prices will jump UP over 8.5 cents ~ Be Safe
NMEX Crude $ 85.15 UP $1.4400
NYMEX ULSD $2.7119 UP $0.0848
NYMEX Gas $2.7589 UP $0.0489
NEWS
Oil prices on Tuesday rose to their highest level since October as investors closely monitored fresh supply threats amid an escalating conflict in the Middle East and a Ukrainian drone strike on a major Russian oil refinery. The U.S. WTI contract for May delivery gained $1.44, or 1.72%, to settle at $85.15 a barrel. The Brent contract for June delivery added $1.53, or 1.75%, to $88.94 a barrel. Brent futures have largely been trading in a narrow interval between $75 and $85 per barrel since the start of the year, but heightened geopolitical risk and robust economic data appear to have prompted a move higher. “The new week, the new month and the new quarter was greeted with escalating tension in the Middle East with indirect Iranian involvement,” Tamas Varga, an analyst at oil broker PVM, said in a research note published Tuesday.
OPEC member Iran has clamed Israel for a deadly air strike Monday on its consulate in the Syrian capital of Damascus that reportedly killed seven of its officers. Tehran on Tuesday pledged to take revenge for the attack, which was seen as a major escalation in the Israel-Hamas war. Israel has not declared responsibility and a government spokesperson said they would not comment on foreign media reports, according to Sky News. PVM’s Varga warned that the potential for direct Iranian involvement in the Israel-Hamas war could spark a “region-wide conflict with plausible impact on oil supply.”
Ukraine on Tuesday struck one of Russia’s largest oil refineries with a drone attack on the highly industrialized Tatarstan region southeast of Moscow, around 1,300 kilometers, or 800 miles, from the front lines of the conflict. Tatarstan’s head Rustam Minnikhanov said in a Google translated post on Telegram that industrial locations had been targeted by drones in the towns of Nizhnekamsk and Yelabuga.“There is no serious damage, the technological process of the enterprises is not disrupted,” Minnikhanov said.
Russia, an influential member of the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, has been hit by a flurry of Ukrainian drone sticks in recent months and has sought to escalate its own attacks on Ukraine’s energy infrastructure.
Fueling Strategy: Please “PARTIAL FILL ONLY” today/tonight, Thursday prices will drop 6 cents THEN Friday look for another 2.5 cent drop ~ Please Be Safe
NMEX Crude $ 81.35 DN $.2700
NYMEX ULSD $2.5986 DN $.0232
NYMEX Gas $2.6847 DN $.0159
NEWS
May WTI crude oil on Wednesday closed down -0.27, and May RBOB gasoline closed down -1.59. Crude and gasoline prices on Wednesday posted mild losses, with gasoline falling to a 1-1/2 week low. A stronger dollar on Wednesday was bearish for energy prices. Also, Wednesday’s weekly EIA report was mainly bearish after crude and gasoline inventories unexpectedly rose.
Weakness in the crude crack spread was bearish for crude as the crack spread Wednesday dropped to a 2-1/2 week low. The weaker crack spread discourages refiners from purchasing crude and refining it into gasoline and distillates.
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. Bloomberg calculations show Russian refiners processed 5.03 million bpd of crude during March 14-20, down -400,000 bpd from the average for the first 13 days of March and the lowest in 10 months. 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 “KEEP YOUR TANKS TOPPED” today/tonight, Wednesday prices will go UP 2.5 cents ~ Be Safe
NMEX Crude $ 81.62 DN $.3300
NYMEX ULSD $2.6218 DN $.0568
NYMEX Gas $2.7006 DN $.0478
NEWS
May WTI crude oil on Tuesday closed down -0.33, and May RBOB gasoline closed down -4.78. Crude and gasoline prices on Tuesday closed moderately lower, with gasoline falling to a 1-week low. A stronger dollar. Tuesday weighed on energy prices. Also, an increase in Russian fuel exports is bearish for oil prices. In addition, weakness in the crude crack spread is bearish for crude as the crack spread Tuesday fell to a 2-week low.
Tuesday’s US economic news was mixed for energy demand and crude prices. On the negative side, the Conference Board’s Mar US consumer confidence index unexpectedly fell -0.1 to a 4-month low of 104.7, weaker than expectations of an increase to 107.0. Also, the Mar Richmond Fed manufacturing survey unexpectedly fell -6 to -11, weaker than expectations of no change at -5. On the positive side, Feb capital goods new orders non defense ex-aircraft and parts, a proxy for capital spending, rose +0.7% m/m, stronger than expectations of +0.1% m/m.
Crude has support from the recent Ukrainian drone attacks on Russian refineries that have damaged several Russian oil processing facilities, limiting Russia’s fuel exporting capacity. Bloomberg calculations show Russian refiners processed 5.03 million bpd of crude during March 14-20, down -400,000 bpd from the average for the first 13 days of March and the lowest in 10 months. 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. However, the disruption to Russian refiners has yet to affect Russian fuel exports because of the large number of Russian ships at sea transporting crude. Russia’s fuel exports in the week to March 24 rose +360,000 bpd from the prior week to 3.32 million bpd. Crude oil prices are seeing support from expectations that global crude supplies will remain tight as OPEC+ delegates are expected to keep crude production quotas unchanged when they meet next week. Several OPEC delegates said they see no need to recommend changes to the group’s crude production levels. OPEC+ will meet on April 3 to assess implementation of its crude output cuts, which are scheduled to remain in place through the end of June. OPEC+ announced on March 3 that it would extend its current crude production cuts of about 2 million bpd until the end of June. The group said its crude production cuts will be “returned gradually subject to market conditions” after the second quarter. However, OPEC Feb crude production rose +110,000 bpd to 26.680 million bpd, a bearish factor for oil prices as Iraq and UAE continue to pump above their production quotas.
The recent strength of Chinese crude oil demand is bullish for prices. Last Monday’s government data showed that China processed a record 118.76 MMT of crude in January and February, up +3% from the same time last year. Also, Chinese fuel demand jumped, with expressway passenger volumes 54% higher than 2019 levels, while airlines saw 19% more people than the pre-pandemic peak.
Also, Vortexa said on March 4 that OPEC+ compliance with crude production cuts is still “questionable.” Vortexa said that Russian oil exports were about 500,000 bpd above the OPEC+ commitments, and there are “little indications that Russia is actively cutting either crude production or exports.” Bloomberg reported last Tuesday that Russia’s seaborne crude oil exports in the week ended March 10 rose +590,000 bpd and that Russia’s flows were 420,000 bpd above Russia’s pledge.
Crude prices have underlying support from the Israel-Hamas war and concern that all-out war might spread to Lebanon. Hezbollah and Israel have traded fire almost daily since the Israel-Hamas war erupted on October 7. Also, the US and UK have engaged in airstrikes against Houthi rebels in Yemen in retaliation for Houthi attacks on commercial shipping in the Red Sea. 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.
An increase in crude in floating storage is bearish 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 rose +0.1% w/w to 74.72 million bbl as of March 22. The consensus is that Wednesday’s weekly EIA crude inventories will fall by -1.0 million bbl, and EIA gasoline supplies will fall by -1.7 million bbl. Last Wednesday’s EIA report showed that (1) US crude oil inventories as of March 15 were -2.8% below the seasonal 5-year average, (2) gasoline inventories were -2.4% below the seasonal 5-year average, and (3) distillate inventories were -5.0% below the 5-year seasonal average. US crude oil production in the week ending March 15 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 March 22 fell by -1 rig to 509 rigs, moderately 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 3-3/4 year high of 627 rigs posted in December 2022.
