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Market Close: June 28 Mixed

Fueling Strategy: Please keep tanks topped tnight, Thursday prices will jump UP 3 cents then another 5 cents Friday!!! – Be Safe
NYMEX Crude    $ 73.45 UP $.6900
NYMEX ULSD     $2.1782 UP $.0010
NYMEX Gas       $2.1329 DN $.0007
NEWS

U.S. oil prices rose to a three-and-a-half year high on Thursday, bolstered by supply concerns due to U.S. sanctions that could cause a large drop in crude exports from Iran.

U.S. West Texas Intermediate (WTI) crude futures settled at $73.45 a barrel, up 69 cents, or 0.95 percent. It reached $74.03 earlier in the session, highest since Nov. 26, 2014.

The United States this week demanded all countries halt imports of Iranian oil from November, a hardline position the Trump administration hopes will cut off funding to Tehran.

On Thursday, officials said they would work with countries on a case-by-case basis. China, the biggest importer of Iran’s oil, has not committed to the U.S. position.

“The sanctions are trying to isolate Iran a bit more, and that potentially cuts more oil off from the overall global arena as a whole,” said Mark Watkins, a regional investment strategist at U.S. Bank Wealth Management.

“If you’re having Iran’s oil taken off the market, then you have a decrease in supply and by all means, that’s going to put more pressure on the price of oil to move up.”

The U.S. demands follow a decision by the Organization of the Petroleum Exporting Countries last week to increase production to try to moderate oil prices that have rallied more than 40 percent over the last year.

Oil prices have rallied for much of 2018 on tightening market conditions due to record demand and voluntary supply cuts led by OPEC and other producers including Russia.

Unplanned supply disruptions from Canada to Libya and Venezuela also have supported prices.

U.S crude futures also extended gains after data showed inventories at the Cushing, Oklahoma, delivery hub fell by 3.1 million barrels in the week through June 26, traders said, citing data from market intelligence firm Genscape.

Front-month WTI’s premium to the second month surged to a session high of $1.73 a barrel after the data, while U.S. crude’s discount to Brent also narrowed to the smallest in three months at $4.32 a barrel.

Not all indicators point toward an ever-tightening market. U.S. crude production is approaching 11 million barrels per day (bpd), and Saudi Arabia expects to match that in coming months as well.

But analysts say the market has little spare capacity to deal with further disruptions.

“With inventories still declining and spare capacity uncomfortably low, there is very little cushion for any supply disruption caused by rising geopolitical risks,” ANZ bank said.

Have a Great Day,
Loren R Bailey, President
Fuel Manager Services, Inc.
“We Offer More Services to Fuel Your Business”
Office: 479-846-2761
Cell: 479-790-5581

www.FuelManagerServices.com

“Perform at your best when your best is required. Your best is required each day.” ~ Coach John Wooden

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.