X

Market Close: Jan 22 UP, Diesel UP $.0314, Gas UP $.0750

Fueling Strategy: Please “FUEL AS NEEDED” today/tonight ~ Please Be Safe!

NMEX Crude      $ 75.19 UP $1.7800

NYMEX ULSD     $2.6935 UP $0.0314

NYMEX Gas       $2.2378 UP $0.0750

NEWS

February WTI crude oil on Monday closed up +1.78 (+2.42%), and Feb RBOB gasoline  closed up +7.50 (+3.47%). Crude oil and gasoline prices on Monday moved higher, with crude posting a 3-1/2 week high and gasoline posting an 8-week high.   Crude prices rallied Monday after a drone attack shut down a Novatek PJSC gas-condensate terminal on the Baltic Coast near a major oil export terminal,  threatening to disrupt Russian crude exports.  Also, Monday’s rally in the S&P 500 to a record high shows confidence in the U.S. economic outlook that is bullish for energy demand and crude prices.

An attack by Ukrainian drones on Russian crude export terminals could disrupt Russian crude exports and is bullish for oil prices.  On Sunday, Ukraine launched a drone attack that caused a fire and shut down Russia’s Novatek PJSC’s gas-condensate terminal in the port of Ust-Luga, close to some of Russia’s most important oil export facilities. A bearish factor for crude oil was the announcement from Libya’s National Oil Corp that crude flows from the Sharara oil field, which has been closed for the past three weeks, would resume.  The Sharara oil field is Libya’s largest and pumps about 300,000 bpd.

The recent series of hostile incidents in the Red Sea against commercial shipping is bullish for oil prices.  Earlier this 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. An increase in Russian crude oil exports is bearish for crude oil prices.  Tanker-tracking data from Vortexa monitored by Bloomberg shows the four-week average of refined fuel shipments from Russia rose to 2.77 million bpd in the four weeks to Jan 14, up +53,000 bpd from the prior week. An increase in crude in floating storage is bearish for prices.  Monday’s weekly data from Vortexa showed that the amount of crude oil held worldwide on tankers that have been stationary for at least a week rose +3.2% w/w to 75.28 million bbl as of Jan 19.

On Nov 30, OPEC+ agreed to cut crude production by -1.0 million bpd through June 2024.  However, crude prices sold off on the news since no details were provided on how the cuts would be distributed among members, nor how Russia’s -300,000 bpd export cut would factor into the new totals.  Delegates said the final details of the new accord, including national production levels, would be announced individually by each country rather than in the customary OPEC+ communique.  The market was disappointed that the extra cuts in OPEC crude output will be announced by each individual country, which suggests the reductions are only voluntary.  Meanwhile, on Dec 21, Angola announced that it was leaving OPEC amid a dispute over oil production quotas. Saudi Arabia said on Nov 30 that it would maintain its unilateral crude production cut of 1.0 million bpd through Q1-2024.  The move would maintain Saudi Arabia’s crude output at about 9 million bpd, the lowest level in three years.  Russia also said it will deepen its voluntary oil export cuts by 200,000 bpd to 500,000 bpd in Q1 of 2024.  OPEC Dec crude production fell -40,000 bpd to 28.050 million bpd.

Last Thursday’s EIA report showed that (1) U.S. crude oil inventories as of Jan 12 were -2.7% below the seasonal 5-year average, (2) gasoline inventories were +0.3 above the seasonal 5-year average, and (3) distillate inventories were -3.4% below the 5-year seasonal average.  U.S. crude oil production in the week ended Jan 12 rose +0.8% w/w at 13.3 million bpd, matching the record high.

Baker Hughes reported last Friday that active U.S. oil rigs in the week ended Jan 19 fell by -2 rigs to 497 rigs, just above the 2-year low of 494 rigs from Nov 10.  The number of U.S. oil rigs in the past year has fallen from the 3-3/4 year high of 627 rigs posted in December 2022.

Have a Great Day!

Loren R Bailey, President

Office: 479-846-2761

Cell: 479-790-5581

SCHEDULED OUT OF OFFICE  

None at this time

Tell Us How We’re Doing On Google Business

https://g.page/r/CUyL9wDolv04EAI/review

As always, thank you so much for being a part of the Fuel Manager Services, Inc. family, and we look forward to making this the best year yet!

“Celebrating 31-years of Service Excellence”

www.FuelManagerServices.com

“Coming Together is the Beginning; Keeping Together is Progress; Working Together is Success”  ~ Henry Ford

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.