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- 21 Feb
Wholesale Fuel Prices Expected To Rise
OPIS (Oil Price Information Service) sent an email alert today warning of a $.05 wholesale fuel cost increase expected for February 22, 2011. The complete message is pasted here.
“The peace and calm for marketers who are today observing Presidents’ Day has been interrupted by a paroxysm in global prices for crude and refined products, which almost certainly will add 5cts/gal or more to wholesale prices tomorrow.”
“The New York open outcry markets are closed, but some hefty volumes have changed hands in electronic trading and sent overseas crude prices as high as they’ve been since September 2008, and pushed gasoline and diesel prices up 5- 7cts/gal in the process.”
“Brent crude, which has been the driving force behind NYMEX RBOB and heating oil futures price gains in 2011, traded for over $105/bbl this morning, spurred by violence that appeared to escalate into chaos in Libya. Libya produces some 1.7 million b/d of crude. There are also concerns that violence in the Persian Gulf may be ratcheted higher as unrest in the region shows no completion date.”
“April Brent crude was trading at $104.73/bbl, up $2.21/bbl at presstime. Even higher numbers were seen in electronic WTI action, where the expiring March contract moved up $4/bbl to $90.19/bbl and the April contract (which will soon represent the prompt month) rallied some $4.38/bbl to $94.08/bbl. This latter rally has the interest of technical analysts, who believe it may signal a much larger pop.”
“March RBOB futures were up 5.87cts/gal at $2.61/gal and April (the low RVP month) moved up 5.87cts /al to $2.749/gal. March heating oil was up 6.46cts/gal at $2.7775/gal and April barrels were 6.52cts/gal higher at $2.7912/gal.”
“Most U.S. oil companies are closed today (2/21/11), so OPIS has not yet seen a host of intraday moves. Terminals are quite busy, however, as jobbers race to get ahead of price increases that might add $400-$500 per load when spot markets reopen for business tomorrow.”
From a fuel price management perspective, this is one more indicator that the time is now to invest in fuel pricing solutions that allow for the monitoring of cost changes, competiitor responses, fuel volume actuals vs. targets, strategy review, price optimization, and price change execution, in order to make sure fuel budgets for the year stay on track.
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