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Market Close: Feb 28 Mixed

Fueling Strategy: Please fuel as needed today/tonight, Saturday prices will drop one penny – Be Safe
NYMEX Crude    $ 44.76 DN $2.3300
NYMEX ULSD     $1.4892 UP $0.0014
NYMEX Gas       $1.3955 DN $0.0151
NEWS
U.S. oil prices experienced their steepest weekly fall since 2008 as the spread of the coronavirus stokes fears of slowing global demand. Investors are increasingly worried as the virus has spread beyond its epicenter in China to more than 40 other countries. WTI Crude down 4.9%, to $44.76 per barrel. U.S. crude has fallen about 16% for the week, the biggest weekly decline since December 2008. The most active Brent Crude contract for May was down 3.2%, at $50.749 a barrel, a 14-month low. The front-month April contract expires later on Friday.

New infections of the coronavirus reported around the world were now surpassing those in mainland China, where more than 2,700 people have died. A further 57 deaths have been recorded in other countries. “Oil prices are moving tangentially to news flows around the deluge of secondary cluster outbreaks,” said Stephen Innes, chief market strategist at AxiCorp. Benchmark Brent crude, which fell about 2% on Thursday, has shed around 13% this week, putting it on track for its steepest weekly decline since January 2016. “Brent crude under $50 a barrel will be a nightmare scenario for OPEC and may well provoke a …response of some kind from the core grouping,” said Jeffrey Halley, senior market analyst at brokerage OANDA. But some market participants are expecting the recent sell-offs to be reined in as soon as the demand fears wane. “We have to believe that the COVID-19 virus will be contained sooner rather than later. I’m optimistic we should see some positive news by mid next week at the latest,” said Sukrit Vijayakar, director of energy consultancy Trifecta.

“Subsequently, the sudden drop in demand will rise back just as suddenly, to at least 75% to 90% of prior levels. The rise back will be spurred by current low prices.” Oil markets are hoping for steeper supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, a group known as OPEC+. OPEC+, which is currently reducing output by roughly 1.7 million barrels per day to support prices, is due to meet in Vienna on March 5-6.

Saudi Arabia, which said it would continue to engage with Russia regarding oil policy, is reducing crude supplies to China in March by at least 500,000 bpd due to slower refinery demand.

Have a Great Day,
Loren R Bailey, President
Fuel Manager Services Inc.
Office: 479-846-2761
Cell: 479-790-5581
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.