X

Market Close: Feb 04 Mixed

Fueling Strategy: Please keep tanks topped tonight, Friday AM wholesale prices will jump UP 7 cents – Be Safe Tonight

NYMEX Crude $ 31.72 DN $.5600
NY Harbor ULSD $1.0805 UP $.0019
NYMEX Gasoline $1.0284 UP $.0147

NEWS
Oil futures staged an intraday U-turn on Thursday, settling lower and giving up a portion of 8% leap seen a day earlier, as doubts over the potential for a production cut among major producers offset earlier support from weakness in the U.S. dollar.

March West Texas Intermediate crude fell by 56 cents, or 1.7%, to settle at $31.72 a barrel on the New York Mercantile Exchange. Prices had surged earlier to $33.60, which would have marked the highest settlement since Jan. 29. April Brent crude the global oil benchmark, lost 58 cents, or 1.7% to $34.46 a barrel on London’s ICE Futures exchange, retreating from a high of $35.84.

Understandably, there’s lots of uncertainty still hanging over the oil market and traders are getting used to big swings in and around the $30 area,” Fawad Razaqzada, technical analyst at Forex.com and City Index, told MarketWatch. “Essentially, there are tentative signs that the buyers are stepping back in but because there has been no confirmation of a change in the trend yet, they are rightly being nimble.”

WTI prices jumped Wednesday despite data from the U.S. Energy Information Administration that showed a bigger-than-expected 7.8 million-barrel weekly increase in crude stockpiles. The increase lifted total U.S. supplies to 502.7 million barrels, the highest weekly level on record, based on EIA data going back to the 1980s. “The U.S. is sitting on a half-billion barrels of crude stocks and we are approaching the spring period of low demand,” said James Williams, energy economist at WTRG Economics. “The fundamentals remain bearish as U.S. production has not declined at the expected rate and the market is finally correcting to reflect reality.”

Still, prices had found support Wednesday and early Thursday from a fall in the dollar. A weaker dollar makes oil, which is traded in dollars, cheaper for foreign buyers.

If Friday’s U.S. jobs report “does disappoint expectations badly, then the dollar could extend its decline further, potentially leading to more gains for oil,” said Razaqzada. The market has also seen ongoing speculation that Russia is willing to meet with the members of the Organization of the Petroleum Exporting Countries to discuss a possible production cut.“If this were to happen, the oil market would tighten and prices may well stage a more significant recovery,” said Razaqzada. “Conversely, if there is no deal then a lot of traders would be disappointed, leading to renewed selling pressure in oil.”

The Petroenergy Information Network, or SHANA, which stands for its Persian acronym, reported Wednesday that Venezuela’s oil minister said six oil-producing countries have agreed on a plan to hold an emergency meeting of OPEC and non-OPEC members. The report made no mention of oil heavyweight Saudi Arabia, whose participation would be essential to any plan to cut output.

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.