X

Market Close: Nov 30 Down

Fueling Strategy: Please fill as needed tonight – Be Safe Today!!

NYMEX Crude $ 41.71 DN $.0600
NY Harbor ULSD $1.3369 DN $.0155
NYMEX Gasoline $1.3587 DN $.0318

NEWS
Expectations that members of the Organization of the Petroleum Exporting Countries won’t cut output at their meeting later this week kept pressure on oil futures Monday, extending the November rout to around 10%.

January West Texas Intermediate crude fell 6 cents, or 0.1%, to settle at $41.65 a barrel on the New York Mercantile Exchange, after Friday’s 3.1% drop. January Brent crude on London’s ICE Futures exchange shed 25 cents, or 0.6%, to $44.61 a barrel. In November, prices for WTI lost about 10.6%, while Brent gave up roughly 10%.

Oil prices have been sliding for over a year since the Organization of the Petroleum Exporting Countries opted to keep production high to protect market share and bump out rivals in the U.S. and those outside the cartel. OPEC is set to hold its next meeting on Friday. “The pressure is growing on Saudi Arabia to cut production after it convinced the cartel to keep oil output high in order to maintain market share and presumably squeeze shale and other weaker producers out of the market,” said Fawad Razaqzada, technical analyst at Forex.com. That strategy has “so far failed to work effectively with rivals proving to be surprisingly resilient,” he said. “Meanwhile oil prices have dropped far more, and remained depressed longer, than what the Saudis and indeed many other oil producers had envisaged last year.” Still, “it is unlikely that a production cut will be agreed upon as Saudi and a few other OPEC members can still survive at current oil prices for a lot longer than some of their rivals,” said Razaqzada. So while the low prices may be “uncomfortable for the OPEC for now, it may still pay off in the long term” as some of the weaker non-OPEC producers will be forced out of the market. Oil traders will also be taking cues from various central banks this week. Expectations are high that European Central Bank President Mario Draghi will announce a round of fresh measures this Thursday aimed at boost the eurozone economy.

In the U.S., Federal Reserve Chairwoman Janet Yellen will be giving her outlook on the U.S. economy Thursday. The monthly nonfarm payrolls report will be released on Friday. Analysts will comb through both events for hints on the future direction of the U.S. interest rates and the strength of the dollar.

Meanwhile, weakness in China is also contributing to weakness in oil prices, said Patrick Kerr, owner of private-investment firm The Kerr Organization. “Indicators of weakness in China, such as the continuing accumulation of base-metal stockpiles, demonstrate how truly pervasive the slowdown is,” he said.

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.