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Market Close: Oct 14 Up

Fueling Strategy: Please top your tanks tonight before 23:00 CST, Friday prices will go up one penny then Saturday prices will jump UP 4 cents  ~ Be Safe
NYMEX Crude    $ 81.31 UP $.8700
NYMEX ULSD     $2.5614 UP $.0403
NYMEX Gas       $2.4350 UP $.0295
NEWS
Oil prices could stay at higher levels in the years to come as demand rebounds while supply remains tight, according to Goldman Sachs’ head of energy research. Damien Courvalin, who is also a senior commodity strategist, said the market fundamentals warrant higher prices and that the bank’s forecast for Brent crude is $85 per barrel for the next several years. “This is not a transient winter shock like it could for gas. This is actually the beginning of a material repricing higher for oil,” he told CNBC’s “Street Signs Asia” on Thursday. Goldman Sachs’ base case is for Brent to hit $90 per barrel be the end of the year.

U.S. crude futures closed up $.8700 at $81.31 per barrel, while international benchmark Brent crude futures gained 1.24% to trade at $84.21 per barrel on Thursday afternoon in Asia. The oil market is in “the longest deficit we’ve seen in decades,” and demand will continue to outstrip supply in winter, said Courvalin. The lack of upstream investment in oil supply while demand grows points to “sustained high prices” at least in the year ahead, he added.

What’s happening in the coal market — where prices are at record highs because supply shrank faster than demand — is a “warning sign” for oil, Courvalin said. Oil drilling activity hasn’t recovered much on the supply side, while demand is growing, he said, describing the market as being in an “entrenched deficit.” “We’re facing potential multi-year deficits and the risk of significantly higher prices,” he said. There needs to be a realization that the transition to cleaner energy will take a long time, and that calls to stop investing in hydrocarbon supply will only create “much higher energy prices in the coming years,” he said.

Despite oil futures climbing more than 60% this year and hitting multi-year highs, Courvalin said oil producers haven’t increased supply. “Demand is rebounding further and we need to really start to see that investment,” he said. Shale producers, however, are focused on returning cash to shareholders. “That’s the key of the sustainability of higher prices,” he said, adding that he sees oil demand hitting new record highs in 2022 and 2023. “The fundamentals actually very much support the view of higher prices than we’ve seen, pretty much since 2014,” he said.

Have a Great Day,
Loren R Bailey, President
Office: 479-846-2761
Cell: 479-790-5581
www.owneroperatoradvisoryservice.com
“To give real service you must add something which cannot be bought or measured with money, and that is sincerity and integrity.”
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.