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Market Close: Aug 28 Mixed

Fueling Strategy: Please fuel as needed today BUT plan on Saturday’s 3.50 cent drop in prices, Sunday look for little to no change in prices – Be Safe
NYMEX Crude    $ 42.97 DN $.0700
NYMEX ULSD     $1.2162 UP $.0055
NYMEX Gas       $1.3155 UP $.0310
NEWS

Oil futures ended modestly lower Friday, but tallied a weekly gain a day after Hurricane Laura made landfall on the Gulf Coast as a Category 4 storm but refineries were spared from extensive damage. “No reports of major damage to refineries or massive flooding should allow the industry to bounce back quickly,” said Phil Flynn, senior market analyst at The Price Futures Group, in a Friday note. “While refineries may stay shut for weeks, they will use this opportunity to do maintenance, and after some seasonal weakness in prices, petroleum should resume its longer-term upward trend.”

West Texas Intermediate crude for October delivery fell 7 cents, or 0.2%, to settle at $42.97 a barrel on the New York Mercantile Exchange. Based on the front-month contracts, prices saw a weekly climb of 1.5%, which represents their fourth weekly rise in a row according to Dow Jones Market Data. October Brent crude, the global benchmark, lost 4 cents, or 0.09%, at $45.05 a barrel on ICE Futures Europe, ahead of the contract’s expiration at Monday’s settlement. For the week, front-month contract prices climbed by 1.6%.

Hurricane Laura was responsible for at least six deaths and caused extensive damage as it came ashore and moved inland Thursday. However, production from oil rigs in the Gulf of Mexico and activity at refiners in the Gulf Coast, the heart of the U.S. oil-processing industry, was expected to rebound quickly.

The five Texas oil refineries that were shut ahead of Hurricane Laura are planning to restart soon, but two major refineries near Lake Charles, La. May take longer due to power outages and “potentially more serious storm damage,” according to an article Friday from S&P Global Platts.

The storm surge was less than anticipated, lowering the probability of prolonged downtime, said Jason Gammel, analyst at Jefferies, in a note. Still, largely all the refining capacity in Lake Charles, Louisiana, and nearby Port Arthur, Texas, was offline in anticipation of the storm, he noted, which along with some reductions and closures in the Houston area likely affected around 3.4 million barrels a day of distillation capacity. ”In normal times this might have led to a sustainable surge in refining margins, but we expect the gains this week will be fleeting given the ample unutilized capacity elsewhere and high product inventories,” Gammel said. Around half of U.S. petroleum refining capacity is located outside of the region.

Analysts said crack spreads—the difference in price between a barrel of crude and the products refined from it—remain at unattractive levels, which could weigh on demand for oil. The gasoline crack spread settled at $7.95 on Thursday, the weakest settlement since April 13, said Robert Yawger, director of energy at Mizuho Securities, while the heating oil crack ended at $8.657, the lowest since June 4. “Refiners generally do not make money when the cracks are trading at levels below $10…Refiners may be reluctant to quickly return to production when the product they make is a money losing proposition,” he said, in a note.

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.