X

Market Close: Sep 29 Mixed

Fueling Strategy: Please partial fill only today/tonight while prices are UP, Thursday prices will drop one penny ~ Be Safe
NYMEX Crude    $ 74.83 DN $.4600
NYMEX ULSD     $2.3075 UP $.0185
NYMEX Gas       $2.2293 UP $.0274
NEWS
America’s oil producers are boosting output at a slower place as record costs hammer the shale patch, according to a survey of industry executives. Out of 47 responding companies that supply producers with everything from software to workers, just one reported lower input costs in the third quarter, according to a report released Wednesday by the Federal Reserve Bank of Dallas. Hiring has become a big headache for oilfield service companies trying to meet increased demand from explorers. Of those reporting difficulties in attracting workers, 70% blamed it on a lack of qualified applicants. Wages are up 20%, and companies are poaching employees from competitors, according to an unidentified survey respondent. “Labor is causing major problems,” the person said. “We are finding it difficult to increase prices to match our increase in costs.”

The outlook comes as a global energy crunch sends prices for oil, natural gas and power soaring, roiling everything from manufacturing to food production. U.S. drillers are keeping output in check as they respond to investor pressure to pay down debt and return cash to shareholders, adding to the inflationary pressure. Of all the labor shortages that are wreaking havoc on the U.S. economy — from cashiers to chefs — few are as thorny or potentially as permanent as the one that has a grip on the oil sector. Thousands of roughnecks and engineers are wary of returning to jobs like the ones they lost when the pandemic sent the price of crude oil crashing last year. Meanwhile, supply-chain snarls mean it’s “taking longer for companies to receive inputs,” the Dallas Fed said. The index for supplier delivery time rose to the highest since the survey’s inception in 2016.

For most of this year, oilfield service companies have mostly been able to pass along input costs to their clients in the form of higher service prices, but that’s also generally kept them from booking extra profits, Citigroup Inc. has said. Inflation could reach 12% or more by the end of this year for the sector in North America, analysts including Scott Gruber wrote in a June investor note. One respondent to the Dallas Fed survey pinned the blame for inflation on closely held shale explorers that aren’t beholden to investor demands for discipline. Private producers are running the most drilling rigs in almost two years. “Increased activities by private E&P firms is leading to cost inflation,” the respondent said. “Continued oilfield services consolidation may contribute to it further.”

Have a Great Day,
Loren R Bailey, President
Fuel Manager Services Inc.
“Serving the trucking industry since 1992”
Office: 479-846-2761
Cell: 479-790-5581
www.FuelManagerServices.com
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.