Market Close: April 18, Diesel DN $.0390, Gas DN $.0150
Apr 18th, 2024 by loren
Fueling Strategy: Please “PARTIAL FILL ONLY” today/tonight, Friday prices will drop 7 cents then Saturday look for another 4 cent drop~ Please Be Safe
NMEX Crude $ 82.11 UP $.0400
NYMEX ULSD $2.5419 DN $.0390
NYMEX Gas $2.6842 DN $.0150
NEWS
May WTI crude oil on Thursday closed up +0.04, and May RBOB gasoline closed down -1.50. Crude and gasoline prices on Thursday settled mixed, with crude rebounding from a 3-week low and gasoline falling to a 2-week low. A stronger dollar Thursday weighed on energy prices. Crude also has a negative carryover from Wednesday, when the EIA reported that crude inventories rose more than expected to a 10-month high. Lingering geopolitical risks between Iran and Israel are limiting the downside in crude prices. Crude prices recovered from early losses and posted modest gains Thursday after Iran warned Israel against attacking its nuclear facilities, threatening to respond in kind if its atomic sites are targeted.
Crude oil prices are supported by Israel-Iran tensions. Top Israeli military officials said Monday that their country has no choice but to respond to Iran’s weekend attack. There are hopes that any Israeli retaliation will be limited and will perhaps conclude the latest round of tensions that began with Israel striking an Iranian consulate in Syria and killing some top Iranian military generals.
Thursday’s global economic news is mixed for energy demand and crude prices. On the negative side, US Mar leading indicators fell -0.3% m/m, weaker than expectations of -0.1% m/m. Also, Eurozone Mar new car registrations fell -5.2% y/y, the biggest decline in 20 months. On the positive side, the US Apr Philadelphia Fed business outlook survey unexpectedly rose +12.3 to a 2-year high of 15.5 versus expectations of a decline to 2.0. Also, the Japan Feb tertiary industry index rose +1.5% m/m, stronger than expectations of +0.5% m/m, and the largest increase in 2-1/2 years.
Weakness in the crude crack spread is bearish for crude prices. The crack spread Thursday fell to a 1-week low, discouraging refiners from purchasing crude oil and refining it into gasoline and distillates. 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 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 7 fell by -450,000 bpd from the prior week to 3.39 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.
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Loren R Bailey, President
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