News
Petoleum Management Service welcomes it's newest addition to the family. California
Trucking Association Group Fuel Program. The California Trucking Association (CTA)
is proud to announce that agreements have been reached to create and administrate
a CTA member only group fuel program. Fleet One has been selected to be the credit
administrator. They currently have a network of over 20,000 fuel stops nationwide
that accept thier card and offer group discounts. In addition to fuel most of the
other services needed for trucking are covered with the use of the Fleet One card.
Petroleum Management Service (PMS) has been selected to drive the marketing of the
group fuel program. PMS will also provide a membership only website that has useful
tools in the management of a trucking companies energy usage. Watch for more details
as the launch date for this new and unique program approaches.
Wednesday’s national oil statistics had an air of mystery about them as the clock
ticked down to 10:30 a.m. Last week’s very bearish numbers had some traders (probably
the hopeful bulls) thinking “aberration” and maybe a reversal this week. Even so,
the cautious consensus of the experts was still calling for counter-seasonal builds
in inventory. For the most part, they were correct. Crude oil built +1.2 mmb against
expectations of +2.2 mmb (a bit bullish) and gasoline built +2.1 mmb vs. a guess
of +1.6 mmb (a bit bearish). Refinery runs were slightly higher at +.6% to creep
a little over 85%. But the knock-your-socks-off number came from distillate. Distillate
built by an eye opening +6.4 million barrels when an increase of only +1.1 million
was expected. The bears won. Distillate quickly led the market lower, dragging the
other categories down with it. If you’re a fan of history repeating itself in the
oil markets (and if you are, you should stop), the mere fact that industry watchers
were expecting a distillate inventory increase in the 2nd week of January was weird
enough. But seeing a six-fold increase over those guesses had to throw most distillate
traders into their best Jerry Lewis imitation. More on this in The Bottom Line…
Now for the economic news, if I have to. Last week’s data from the Labor Department
confirmed what we all probably already knew: unemployment is worsening. The unemployment
rate jumped to 7.2% (the highest in almost 16 years) on the back of another 524,000
jobs lost in December. That makes for 1.9 million jobs lost in just the last 4 months.
Experts are saying we haven’t seen the worst yet with most anticipating the rolls
to keep depleting until we get into the 9-10% territory. Sigh. Holiday spending
disappointed as well. Reports note that December retail sales dropped 2.7% in December
from November…the hoped for late surge didn’t materialize. For what I think is an
even better perspective of consumer confidence is the 9.8% drop in December sales
from the previous December of 2007. With the loss of personal wealth experienced
in 2008, even the employed are queasy. Excuse me while I go kick a water cooler
or something.
Showing either amazing guts or complete cluelessness after a humbling last couple
of years, forecasters are still trotting out their guesses of the future…hey, I
guess it’s what they do. The Energy Information Agency (U.S.) once again revised
their forecast for demand in 2009. The EIA lowered their 2009 U.S. demand by 160,000
barrels per day and their call on worldwide demand down by another 200,000 barrels
per day. They still feel that 2008 global demand will be flat to 2007, but we still
have a rash of revisions still to come. The EIA now predicts that 2009 will see
a global drop of 800,000 barrels per day and that the world will see well above
average stocks through 2010. With economies around the world tanking, I feel for
the professional forecasters at the EIA trying to make sense of things. The next
few days will see several other forecasts, including the Paris-based IEA. Based
on their recent announcements, the IEA logo may soon be featured in the next version
of Merriam Webster’s entry for “cluelessness”. It will be interesting to see if
they continue to bemoan tight inventories and call on OPEC to pour more oil on the
market.
Saudi Arabia made some headlines this week when they revealed that they were already
at their recently agreed export quota of 8.051 million barrels per day – a quick,
sizable drop from their December output. Saudi Oil Minister al-Naimi went on to
say that February would even be lower, but declined to make an actual February prediction.
So, I guess so much for OPEC not reaching their quotas? Saudi Arabia is no doubt
the linchpin of OPEC, but frankly the news that they were going to meet their quota
wasn’t much of a surprise – contrary to their OPEC brethren, they usually do what
they say they are going to do. The Saudi cuts amount to about 40% of the total announced
goal of over 4 million barrels per day. The pudding that needs to be proven is what
the rest of the energy gang will do. Remember, the Saudis can still make money at
these price levels… the others, ah, not so much. That didn’t stop the ever effervescent
Hugo Chavez of Venezuela to state that OPEC is “willing to cut 2 million more, 4
million more barrels to preserve the price.” I’ll bet he hopes the rest of OPEC
is up to the task.
Service
We've heard time and time again that "knowledge is power." Unfortunately the intended
message can be deceiving. Simply having knowledge doesn't necessarily equal power,
its how you gather, organize, and use knowledge that can be powerful. This is especially
true for our customers that turned to Petroleum Management Services to help them
to gain control of their fuel costs. Petroleum Management Service is not a Distributor
or Marketer. We are a service provider that specializes in the management of purchasing
bulk fuel for small, medium, large companies, and government agencies in the Southwestern
United States.
Read More
We offer advice to those customers that would prefer to manage their own fuel needs
by sticking their tanks, determining which supplier to use, and making arrangements
to have the fuel delivered.
Read More