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.
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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.
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