Prices moved higher in the Fuel Markets on Thursday with the sudden realization that oil production and refinery stoppages adversely impact supply.
Impacts from Hurricane Ida were the focus in the Fuel Markets on Monday
Covid’s current demand weakness has not offset the glaring supply situation that persists.
Tuesday was day two of the Bulls’ ascent in the Fuel Markets.
Chartists had a field day with bullish trendlines and hungry buying signals.
Those hoping to find the bottom of the August Bear plunge were greatly disappointed in the Fuel Markets on Thursday. The Bears took it to the Bulls for the sixth consecutive day. First, Covid continues to march feverishly in the US. Second, the dollar strengthened after the Federal Reserve announced they would slow their pace of bond buy-backs, and the US weekly initial unemployment claims was smaller than expected. On the travel front, Wednesday’s Traveler Throughput was down 4.7% over the prior Wednesday and dropped another .10% in the 7-day average versus 2019 according to TSA data. The daily travel declines provide ongoing evidence of softening demand. Friday is a slow scheduled economic news day. The best hope for the Bulls continues to be bargain hunters and chartists believing their models found the bottom at long last.
The Bears continued their winning streak on Tuesday in the Fuel Markets as demand remained in center focus. In the first sign of demand troubles, the US Census announced a 1.1% decline in retail sales versus June. Analysts had projected a 0.3% decline. The second warning sign came from the API who reported Crude inventory declined 1.2MM barrels which was less than inventory forecasts for the EIA’s report and suggests fuel demand is softening. The S&P Platts survey expects the EIA’s Wednesday report to show Crude to drop 3.1 MM barrels, Gasoline to decline of 2.3MM barrels and Distillate stocks to rise by 700K barrels. While the API inventory declines are less than forecasts, they are still declines. Supply still plays its part in the equation, so the Bulls are not dead yet.
Talk to a Diversified Expert about how we can help you solve most complicated fuel supply chain challenges.
Email: info@diversified.energy
Phone: 404-474-4450
Dispatch Operations – Coverage 24/7
404-474-4767
M-F: 8:00 AM – 5:00 PM EST
Location
601 West Crossville Road
Roswell, Georgia 30075
