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Market Close: Aug 26 Mixed

Fueling Strategy: Keep tanks topped today/tonight, prices will go UP another 1.5 cents at midnight tonight – Be Safe
NYMEX Crude    $ 43.39 UP $.0400
NYMEX ULSD     $1.2447 DN $.0154
NYMEX Gas       $1.3606 DN $.0353
NEWS

Oil futures settled on a mixed note Wednesday, with U.S. prices holding ground at their highest finish since early March but global benchmark prices slightly lower, as the U.S. Gulf Coast braced for Hurricane Laura and potential damage to the region’s energy infrastructure. Prices failed to find much support from a fifth straight week decline in U.S. crude inventories amid the uncertainty surrounding the actual impact of the storm on energy supply and demand. There is concern that the oil market “may reverse some of the gains we have seen in demand because of the storm track,” with the potential for power outages and a decline in the number of people driving, Phil Flynn, senior market analyst at The Price Futures Group, told Market Watch. “Overall the data suggests that demand will bounce back after the storm passes, but right now the trade is taking an abundance of caution,” he said.

The Bureau of Safety and Environmental Enforcement on Wednesday estimated that 84.3% of the current oil production in the Gulf of Mexico has been shut in, along with around 60.9% of natural-gas output, unchanged from Tuesday’s estimates.Over 45% of total U.S. petroleum refining capacity is located along the Gulf Coast, according to the Energy Information Administration. Reuters reported Tuesday that refiners that produce gasoline and diesel fuel planned to halt nine facilities that process almost 2.9 million barrels a day of oil, or 14.6% of U.S. total capacity.

Laura is now a catastrophic Category 4 hurricane, the National Hurricane Center said Wednesday afternoon. It is forecast to produce an “unsurvivable storm surge,” extreme winds and flash floods over Eastern Texas and Louisiana later on Wednesday. Against that backdrop, “we haven’t seen as big a surge in oil prices as we may have otherwise seen but this isn’t exactly an undersupplied market,” said Craig Erlam, senior market analyst at Oanda, in a note.

West Texas Intermediate crude for October delivery inched up by 4 cents, or 0.1%, to settle at $43.39 a barrel on the New York Mercantile Exchange. October Brent crude, the global benchmark, meanwhile, lost 22 cents, or 0.5%, to $45.64 a barrel on ICE Futures Europe. The big question is will Laura “do lasting damage to refineries or pipelines” and that’s too early to tell, “yet beyond the storm, the U.S. crude picture continues to tighten,” said Flynn.

The Energy Information Administration reported Wednesday that US crude inventories fell by 4.7 million barrels for the week ended Aug. 21, marking a fifth weekly decline in a row. Still, at 507.8 million barrels, crude supplies are still about 15% above the first year average for this time of year, the EIA said. The latest weekly change compared with an average forecast by analysts polled by S&P Global Platts for a decline of 4.3 million barrels. The API one Tuesday reported a decrease of 4.5 million barrels, according to sources. The EIA data also showed crude stocks at the Cushing, Okla., storage hub edged down by about 300,000 barrels for the week.

Gasoline supplies, meanwhile, fell by 4.6 million barrels, while distillate stockpiles rose by 1.4 million barrels. The S&P Global Platts survey had shown expectations for supply declines of 2.7 million barrels for gasoline and 700,000 barrels for distillates.  For the petroleum products, “the most interesting dynamic to watch in the next 48 hours involves power,” said Tom Kloza, global head of energy analysis for the Oil Price Information Service. “Refineries can’t run without electricity, but even more importantly, the Colonial Pipeline might lose pumping stations to power outages.”

Have a Great Day,
Loren R Bailey, President
Fuel Manager Services Inc.
Office: 479-846-2761
Cell: 479-790-5581
“Serving the trucking industry since 1992”
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.