Who moved my fuel planning to another calendar? Last Thursday the Department of Energy (DOE) announced that the inventory levels for all products, gas, heating oil (diesel fuel) and crude oil all increased. Crude oil increased 1.8 million barrels for the week. This of course sent the fuel prices down on NYMEX and caused havoc to proper fleet fuel planning for companies taking bulk fuel deliveries.
The strange thing, actually many strange things behind fuel prices but the main two last week were actually good news for the bulls to run on Wall Street. Hurricane Ida came through the Gulf of Mexico causing terminals and drilling wells to close for a short period. This did give the fuel market a boost in the beginning of the week. What is interesting is that even with the slower production, fuel management inventories still grew. Hmm? What might happen this week?
The other interesting fuel management projection that took place was the International Energy Agency (IEA) reported world oil demand will grow in the fourth quarter marking the first quarter there will be an increase in fuel demand in over a year. The new daily projected usage is 86.2 million barrels per day.
Based on two positives and one negative for the bulls you would think the fleet fuel market would have ended the week higher. I hope you didn’t bet your fuel budget on that. The fuel market finished lower by close to 3%. With the corporate earning season behind us and hurricanes in the Gulf over, what will happen in fuel management this week in this crazy market? What will drive it higher or bring it down. We believe the fuel market has some legs but they are tied to a weak U.S. Dollar. If your fuel planning (short term only for prices) we think the fuel market will slip south for awhile. Look to see fleet fuel, sorry crude oil prices in the low 70’s as we get past Turkey Day. Good luck with your fuel management or give us a call for fuel consulting.
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