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Market Close: Jan 05 Down

Fueling Strategy: Please fill as needed today/tonight – Be Safe!
NYMEX Crude            $  50.04 DN $2.6500
NY Harbor ULSD        $1.7492 DN $0.0465
NYMEX Gasoline       $1.3814 DN $0.0520
NEWS

Oil futures fell Monday, stretching their losing streak to a third session and hitting their lowest levels in more than five years on concerns over a surging U.S. dollar and nagging worries of growing oil supplies. Light, sweet crude for delivery in February fell $2.65, or 5%, to settle at $50.04 a barrel on the New York Mercantile Exchange. Prices traded as low as $49.77 a barrel earlier in the session. The settlement was the lowest for a front-month crude contract since April 28, 2009. Prices have lost 7.5% over the last three sessions. February Brent on London’s ICE Futures exchange declined $3.31, or 5.9%, to end at $53.11 a barrel, the lowest settlement since May 1, 2009. Brent has lost 8.3% over the past three sessions.

The moves came as the euro plunged to a nine-year low versus the U.S. currency. The U.S. Dollar Index which measures the U.S. unit against a basket of six major rivals, was up 0.3% on Monday, and it’s up nearly 2% already in 2015, building on a 2014 rise that was the largest yearly jump since 2008. A rising U.S. currency makes dollar-denominated crude more expensive to users of euros, yen and other units. The dollar’s rise also stoked worries about the eurozone, and talks of a potential “Grexit,” or Greece exit from shared European economy, have re-emerged. That could be more devastating than the collapse of Lehman Brothers in 2008, one economist warned.

On the supply front, two major oil producers, Russia and Iraq, “recently scaled up their oil production and oil exports to their highest levels in decades,” analysts at Commerzbank said in a note Monday. “Even though the negative trends on the oil market will predominate in the short term, we regard the current price level as excessively low and expect to see prices stabilize soon,” the analysts said. Market observers expect the global crude oversupply to hit 1 million barrels a day in the first half of 2015. Analysts at Simmons & Co. said Monday they expect the oversupply to continue in the second half of the year, albeit at a more moderate pace.

Overall, economic conditions that oil markets face have not changed, “which is eliminating buyers from even considering entering [long] positions,” said Jameel Ahmad, chief market analyst at FXTM.

 

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.