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Market Close: Aug 31st Down, Wholesale Prices Fall 10 Cents Daily Wed, Thurs & Friday

Fueling Strategy: Please don’t buy fuel tonight, Thursday’s prices to fall 9 cents then Friday we’ll prices continue to fall another 10 cents~ Be Safe Today
NMEX Crude     $ 89.55 DN $2.0900
NYMEX ULSD    $3.7154 DN $0.1017
NYMEX Gas      $2.6059 DN $0.0885
NEWS

Oil tumbled after Iraq’s state marketing company said exports haven’t been affected by violent clashes in Baghdad while low liquidity exacerbated price moves.

West Texas Intermediate fell 5.5% to settle below $92 a barrel as risk-off sentiment weighed down most commodities. Clashes in Baghdad have yet to hit Iraq’s oil production, soothing initial trader concerns that a major source of supply could be disrupted. Crude’s tight market has outweighed worries in recent days that a global recession could slow demand. Meanwhile, liquidity keeps dropping to fresh six-year lows and below-average volumes have led to choppy summer trading, with prices moving in a $7 range on Tuesday.

Crude reversed Monday’s gains “on news that Iraq will keep their export ports open even though major political unrest remains,” said Dennis Kissler, senior vice president of trading at BOK Financial. But the supply-demand balance has “tightened some and this week’s crude storage is looking for another decline of 500,000-600,000 barrels, which if seen, would take storage back to the lowest in three months.”

While prices have softened in recent months, crude received a fresh boost after Saudi Arabia warned that it was possible the Organization of Petroleum Exporting Countries and its allies, which convene Sept. 5, would reduce production as futures didn’t reflect fundamentals. Other members of the alliance signaled their support. Separately, Goldman Sachs Group Inc struck a bullish note, urging investors in a note Monday to “buy commodities now, worry about the recession later.”

Iraq has the capacity to boost exports to all destinations and won’t refuse any requests for more oil, Alaa Al-Yassiri, the director general of SOMO, Iraq’s national oil marketing company, said in an interview. Violence has been reported in the center of Baghdad, far from the main production-and-export hub of Basra in the south and other important areas north of the capital.

Traders are also keeping a close watch on a potential supply increase from Iran as negotiations over reviving a nuclear deal continue. The US and the Persian Gulf nation remain at loggerheads over key details of an emerging agreement, and may need several weeks to resolve their differences.

“It seems OPEC+ isn’t interested in the oil price slipping much below $100 a barrel,” said Craig Erlam, a senior market analyst at Oanda. While that would be “put to the test in the event of a nuclear deal, which still looks very challenging, or a global recession, the words alone could keep prices high for now,” he said.

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Loren R Bailey, President
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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.