X

Market Close: Aug 16 Down

Fueling Strategy: Please fuel as needed tonight ~ Be Safe Today
NYMEX Crude    $ 67.29 DN $1.1500
NYMEX ULSD     $2.0483 DN $0.0296
NYMEX Gas       $2.2009 DN $0.0617
NEW

Oil fell for a third consecutive day as Chinese economic data disappointed and the spread of the delta coronavirus variant hurt prospects for global demand. Futures declined 1.7% on Monday, the biggest loss in a week as fresh outbreaks in Asia weigh on China’s economy, with retail sales and industrial output slowing. U.S. stock markets were also weaker, with energy and travel-related companies slumping on worries that further restrictions could threaten nascent rebounds. “As data begins to reflect the full impact of the shutdown in China, investors are worried this negative trend we’re seeing won’t just be a localized issue,” says Bart Melek, head of global commodity strategy at TD Securities. “We are moving from expectations of a robust deficit to a potential surplus as the variant continues to halt the growth rate of demand.”

After rallying in the first half of the year, crude prices have stuttered since mid-July. The spread of the delta variant, including in key consumer China, has undermined the outlook for consumption as restrictions on mobility are reintroduced. At the same time, OPEC+ has proceeded with plans to gradually increase production, rolling back the supply curbs it imposed in the early days of the pandemic. “China is the main driver of the market right now, but we’re also getting into a slack demand period as summer travel trails off,” says John Kilduff, partner at Again Capital LLC. “All of this points the market in one direction.”

China’s oil refining slumped to the lowest level in 14 months as private processors scaled back operations amid a crackdown by authorities. Daily crude processing fell below 14 million barrels a day last month for the first time since May 2020, according to Bloomberg calculations based on government figures released on Monday. The nation has been dealing with its most widespread Covid outbreak since the initial cases in 2020, with fresh lock downs imposed. Data on Monday showed China’s economic activity slowed more than expected last month, with retail sales and industrial output missing forecasts, while unemployment rose.

As the market has wobbled in recent weeks, money managers have turned less positive toward U.S. crude futures. Speculators now hold their smallest outright long position in WTI since April 2020.

There are signs U.S. shale producers are ramping up activities. Crude output at major shale basins is set to rise to 8.09 million barrels a day, the highest since April 2020, according to the Energy Information Administration. Production in the Permian Basin is set to reach its highest since March of last year, the agency said.

Have a Great Day,
Loren R Bailey, President
Fuel Manager Services Inc.
“Serving the trucking industry since 1992”
Office: 479-846-2761
Cell: 479-790-5581
www.FuelManagerServices.com
www.owneroperatoradvisoryservice.com
“To give real service you must add something which cannot be bought or measured with money, and that is sincerity and integrity.”
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.