Market Close: Feb 08 UP, Diesel UP $.0756, Gas UP $.0790
Feb 8th, 2024 by loren
Fueling Strategy: Please “KEEP YOUR TANKS TOPPED” prices will JUMP up another 7 cents Friday then another 8 cents Saturday ~ Be Safe
NMEX Crude $ 76.22 UP $2.3600
NYMEX ULSD $2.8908 UP $0.0756
NYMEX Gas $2.3420 UP $0.0790
NEWS
March WTI crude oil on Thursday closed up +2.36 (+3.20%), and Mar RBOB gasoline closed up +7.90 (+4.49%). Crude oil and gasoline prices on Thursday rallied to 1-week highs and closed sharply higher. Crude prices jumped Thursday after Israeli Prime Minster Netanyahu dismissed the chances for a cease-fire in the Israel-Hamas war.
Comments from Israeli Prime Minster Netanyahu pushed crude prices higher Thursday when he said Israel could achieve complete victory over Hamas within months and rejected any talks about a cease-fire. The continuation of the war threatens to escalate and widen throughout the Middle East, a region that accounts for about a third of the world’s oil output. Geopolitical tensions in the Middle East continue to support crude prices. The U.S. and UK have ramped up airstrikes against Houthi rebels in Yemen in retaliation for Houthi attacks on commercial shipping in the Red Sea. Last month, the U.S. Navy advised vessels to avoid the southern Red Sea. Houthis started attacking ships in the Red Sea in mid-November in support of Hamas in the Israeli-Hamas war and said they won’t stop the attacks until Israel ends its assault on Gaza. Attacks on commercial shipping in the Red Sea by Iran-backed Houthi rebels have forced shippers to divert shipments around the southern tip of Africa instead of going through the Red Sea, disrupting global crude oil supplies.
Thursday’s global economic news was mixed for energy demand and crude prices. On the positive side, U.S. weekly initial unemployment claims fell -9,000 to 218,000, showing a stronger labor market than expectations of 220,000. Conversely, China’s Jan CPI fell -0.8% y/y, weaker than expectations of -0.5% y/y and the steepest pace of decline in 14 years. The weak CPI report was negative for China’s economic outlook.
Strength in the crude crack spread supported crude prices as Thursday’s crack spread rose to a 4-1/2 month high. The stronger crack spread encourages refiners to boost their crude oil purchases and refine it into gasoline and distillates.
Crude prices also have support from Ukrainian drone attacks on Russian refineries and oil storage facilities that have curtailed Russian fuel exports. On Sunday, a drone attack by Ukraine damaged Russia’s Lukoil PJSC facility in Volgograd, which processed 289,000 bpd of crude oil in January, or more than 5% of Russia’s total crude processing volume. On Jan 25, a drone attack damaged Russia’s Rosneft PJSC’s major Tuapse refinery on Russia’s Black Sea coast. Russia said on Jan 26 that the Tuapse refinery, which processed 180,000 bpd of crude in the first half of January, will be shut down through at least February. In recent weeks, several Russian oil processing and storage facilities have been targeted and damaged by Ukrainian drone attacks, increasing the risks of reducing Russian crude exports.
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