Market Close: Nov 29 Up, Diesel Up 8.05 cents
Nov 29th, 2022 by loren
Fueling Strategy: Please partial fill ONLY tonight or better yet do NOT fuel until Wednesday when prices will drop drop 2.5 cents ~ Be Safe Today
NMEX Crude $ 78.20 UP $.9600
NYMEX ULSD $3.2959 UP $.0805
NYMEX Gas $2.3321 UP $.0015
NEWS
Oil held onto gains as market uncertainty over OPEC’s upcoming decision on production tugged the price in opposite directions.
West Texas Intermediate rose 1.2% to settle above $78 Tuesday, after trading in a $3 range. Volatility was expected to rise in the days leading up to the meeting this weekend as traders search for any clue on how OPEC and its allies will respond to deteriorating market conditions for producers. The shape of the futures curve has flipped in recent weeks, signaling an oversupplied market.
OPEC+ does “not like contango and that is what has raised market expectations of deeper cuts,” Amrita Sen, chief oil analyst at consultant Energy Aspects, said in a Bloomberg TV interview. “I’m not ruling out deeper cuts — that’s of course on the table — but I would say that’s not our base case.”
Earlier in the session, prices rallied above $79 a barrel after Beijing said it would bolster vaccination among seniors, a move regarded by health experts as crucial for reopening the economy of the world’s biggest crude importer. Prices briefly flirted with losses after Reuters reported that the production cartel would stick with its current oil-output policy, citing unidentified people.
On Monday, Bloomberg reported that OPEC+ may consider supply cuts to counter market weakness; a move that could potentially deepen curbs agreed to last time members convened in October.
Oil has lost about 9% this month as a deteriorating physical market revealed slackening demand. OPEC+ gathering precedes a deadline for European Union curbs on Russian flows as the bloc struggles to agree on a price cap. Concerns that tighter monetary policy will slow consumption as well as doubts about demand in China prompted OPEC+ to announce a major output cut last month.
The weakening at the front of the oil future curve has been precipitous. On Monday, Brent’s nearest timespread closed at its weakest level since 2020, a sign of oversupply. Until this month it had been in the opposite structure, known as backwardation, all year.
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