This week, oil futures experienced a modest uptick of 30 c/bbl on Friday morning, recovering from a dip earlier in the week. Both Brent and WTI crude benchmarks are on course for their fourth consecutive weekly gain – a streak not seen since June 2022. Market participants eagerly await further macroeconomic releases and the kickoff of the first quarter of the 2023 earnings season as equity futures, yields, and the US dollar remain steady.
On Thursday, crude prices opened flat but eventually fell by $1.10/ bbl without any apparent fundamental driver. However, equities and yields rallied after Consumer Price Index (CPI) and Producer Price Index (PPI) data revealed figures in line with – or weaker than – anticipated. In response, OPEC published its monthly report explaining the surprise production cuts implemented by the group. OPEC cited these production cuts as “precautionary measures aimed at supporting the stability of the market.”

The International Energy Agency (IEA) also lowered its global crude production expectations for 2023. The IEA expressed concern that OPEC+ producers’ output cuts could exacerbate the anticipated oil supply deficit in the second half of the year, potentially impacting consumers and the global economic recovery. The group expects a global oil supply decline of 400,000 bpd by year-end, with non-OPEC+ sources increasing production by 1 million bpd, compared to a 1.4 million bpd decrease from OPEC+. The IEA notes that rising global oil inventories may have influenced OPEC+’s decision, as OECD industry stocks reached their highest level since July 2021. The growth is mainly driven by increased production in the US and Brazil.

OPEC+ and the IEA disagree over global oil supply and demand forecasts, with the IEA representing consumer countries that argue supply reductions drive up prices and risk recession. In contrast, OPEC+ blames Western sanctions for market volatility and inflation.

Although demand outlooks vary, the IEA maintained its global oil demand forecast for 2023 at 101.9 mb/d, representing a two mb/d growth from 2022, with non-OECD countries accounting for 90% of the demand increase. However, demand from the US and Europe is expected to slow down due to weakened industrial activity. Furthermore, Russian oil exports hit their highest level since April 2020, driven by robust oil product flows.

This week, oil futures experienced a modest uptick of 30 c/bbl on Friday morning, recovering from a dip earlier in the week. Both Brent and WTI crude benchmarks are on course for their fourth consecutive weekly gain – a streak not seen since June 2022. Market participants eagerly await further macroeconomic releases and the kickoff of the first quarter of the 2023 earnings season as equity futures, yields, and the US dollar remain steady.
On Thursday, crude prices opened flat but eventually fell by $1.10/ bbl without any apparent fundamental driver. However, equities and yields rallied after Consumer Price Index (CPI) and Producer Price Index (PPI) data revealed figures in line with – or weaker than – anticipated. In response, OPEC published its monthly report explaining the surprise production cuts implemented by the group. OPEC cited these production cuts as “precautionary measures aimed at supporting the stability of the market.”
The International Energy Agency (IEA) also lowered its global crude production expectations for 2023. The IEA expressed concern that OPEC+ producers’ output cuts could exacerbate the anticipated oil supply deficit in the second half of the year, potentially impacting consumers and the global economic recovery. The group expects a global oil supply decline of 400,000 bpd by year-end, with non-OPEC+ sources increasing production by 1 million bpd, compared to a 1.4 million bpd decrease from OPEC+. The IEA notes that rising global oil inventories may have influenced OPEC+’s decision, as OECD industry stocks reached their highest level since July 2021. The growth is mainly driven by increased production in the US and Brazil.

OPEC+ and the IEA disagree over global oil supply and demand forecasts, with the IEA representing consumer countries that argue supply reductions drive up prices and risk recession. In contrast, OPEC+ blames Western sanctions for market volatility and inflation.
​
Although demand outlooks vary, the IEA maintained its global oil demand forecast for 2023 at 101.9 mb/d, representing a two mb/d growth from 2022, with non-OECD countries accounting for 90% of the demand increase. However, demand from the US and Europe is expected to slow down due to weakened industrial activity. Furthermore, Russian oil exports hit their highest level since April 2020, driven by robust oil product flows.

Picture this: you’re driving down the highway, enjoying the scenic views, and taking in the fresh air. But have you ever wondered if the air you’re breathing might not be as clean as you think? Just a few years ago, diesel engines, which power many vehicles on the road, were significant contributors to harmful nitrogen oxide (NOx) emissions into the environment. But fear not: Selective Catalytic Reduction Engines (SCR Engine) were created to help save the day!
So, what is an SCR engine? SCR Engine is a technology system that reduces tailpipe emissions of nitrogen oxides (NOx) in the newer generation of diesel-powered vehicles and equipment. It utilizes a unique combination of diesel particulate filters (DPF), SCR technology, and a urea-based solution — aka diesel exhaust fluid (DEF) — to reduce emissions. The DEF is stored in a separate tank in the vehicle and is injected into the exhaust system, where it reacts with the NOx emissions, converting them into harmless nitrogen and water vapor. Although some see the SCR system as just another engine component that can break down, it serves a very important function.
By using SCR technology, NOx emissions can be reduced by up to 90%, making these engines more environmentally friendly and compliant with emissions regulations.

Emissions Regulations
​The automotive industry has come a long way since the Clean Air Act was introduced back in 1970. Though SCR engines had been used in other countries, they hit the US market by storm in 2011, revolutionizing emission controls for US heavy-duty diesel trucks, including buses, trucks, and (later) construction equipment. As a cost-effective and fuel-efficient solution, it became indispensable in helping fleet owners and operators comply with the EPA emissions standards, which demand reductions in particulate matter (PM) and nitrogen oxides (NOx).

What’s DEF?
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​Diesel Exhaust Fluid is a urea-based solution used in SCR systems to reduce harmful nitrogen oxide (NOx) emissions from diesel engines. DEF is composed of 32.5% urea and 67.5% deionized water.
When DEF is injected into the exhaust stream, it vaporizes and decomposes to form ammonia, which reacts with NOx over a catalyst in the SCR system. The reaction converts NOx into nitrogen and water, which are harmless and can be safely released into the atmosphere.
DEF is essential to reducing emissions, as it is the most efficient means of complying with EPA requirements. Suppose you own or operate a vehicle with a diesel engine. In that case, it’s important to understand how DEF works so that you can make sure your vehicle is operating properly and free of harmful emissions at all times. Mansfield has DEF experts ready to consult with you about your specific needs. Our team has been at the forefront of DEF supply and logistics since its inception over a decade ago. Contact us today to ensure your fleet is using a high-quality product with reliable supply capabilities.
Diesel Exhaust Fluid is a urea-based solution used in SCR systems to reduce harmful nitrogen oxide (NOx) emissions from diesel engines. DEF is composed of 32.5% urea and 67.5% deionized water.
When DEF is injected into the exhaust stream, it vaporizes and decomposes to form ammonia, which reacts with NOx over a catalyst in the SCR system. The reaction converts NOx into nitrogen and water, which are harmless and can be safely released into the atmosphere.
DEF is essential to reducing emissions, as it is the most efficient means of complying with EPA requirements. Suppose you own or operate a vehicle with a diesel engine. In that case, it’s important to understand how DEF works so that you can make sure your vehicle is operating properly and free of harmful emissions at all times. Mansfield has DEF experts ready to consult with you about your specific needs. Our team has been at the forefront of DEF supply and logistics since its inception over a decade ago. Contact us today to ensure your fleet is using a high-quality product with reliable supply capabilities.

​The carbon market has developed continuously during the past 15 years and the rules and methodologies are gradually stricter and more precise. The demand for carbon offsets has increased rapidly over the past two years, backed by carbon neutrality commitments from businesses and corporations. It is expected to continue to increase in the coming years, which will support liquidity and transparency in the carbon offset market.
The carbon offset market is bilateral, highly non-commoditized and thus complex. At World Kinect Energy Services, we purchase directly from the project on our customers’ behalf, spending considerable time scrutinizing our counterparties to ensure credibility for our customers. Our long-term relationships and regular buying from project developers around the globe results in better pricing for our customers. Additionally, our team has well over a decade of experience from the global carbon market and can guide you in which projects are of the highest quality and offer co-benefits. Our offering is set up this way to ensure that we access high quality offsets while at the same time remain competitive from a pricing perspective.
We always recommend starting with actual emissions or other reductions in waste and environmentally destructive by products. However, often companies have already exhausted financially and logistically viable energy efficiency projects. In some instances, the lead time to energy efficiency or improvements in energy or fuel options are lengthy.  Companies use carbon offsets as an interim measure whilst they develop other innovations. These initiatives can be costly until they become “business as usual” therefore, carbon offsets are a more economical alternative to manage carbon in the short to medium term.
If you buy certificates linked to authentic projects with a trackable source it is very easy to communicate your position so that it adds to your brand equity, rather than detracts. The market for carbon offsetting can be complex, and therefore, you need someone like World Kinect Energy Services with experience to help you to manage your plan.
We have the experience and networks to link you with the most suitable and genuine projects in the market and all purchases are backed by a cancellation statement from the public carbon offset registries. This provides verifiable proof of the carbon offsets being removed and retired from the market on your behalf. The statement will also confirm the project information provided in our contracts. Most of the income from carbon offsets is used to run the project and ensure emission reductions. For a forestry conservation project, the money will pay for land lease or buying land, salaries to project staff and often it provides additional support to local communities, schools etc. In a wind power project, the money will provide extra income that makes the project more economically viable. A smaller part of the money will also go to project development, administration, and transaction fees as in any standard service delivery.
When it comes to reducing your carbon footprint, World Kinect Energy Services always recommend to first measure and reduce your carbon emissions to the extent that is economically feasible. Ways to reduce emissions include energy efficiency measures, renewable fuels, improving operation systems etc. For your residual emissions, we recommend offsets as a bridging mechanism while waiting for new technology or renewable fuel to become available. Carbon offsetting is the most practical and cost-efficient way to neutralize your residual emissions and shows the market you are taking action which is a much better alternative than doing nothing.

When you buy carbon offsets, make sure to buy offsets that are certified by one of the major standards. We only work with the largest and most credible standards, like Verra and the Gold Standard. These are developed by NGOs and have been in the carbon market for more than 15 years. A project registered under one of these standards has been through a rigorous certification process:

1.The project must be developed in accordance with an approved methodology. The methodologies are very technology specific and are developed by sector experts and subject to public hearings before they are approved.

2. An independent third-party must certify that the project is developed in accordance with the methodology and is eligible for registration. This certification involves an assessment of the project’s additionality; that the project would not have happened without being registered as a carbon offset project. It also certifies that the offsets from the project will only be counted once and that the project will not cause increased emissions elsewhere (“leakage”).

3. If the independent third-party certifies the project, it is submitted for registration to the chosen standard. The standard will then perform its own approval process of the project before it is registered under the standard.
4. When the project has operated for a certain period, e.g., one year, an independent third party must certify the emission reductions that have taken place because of the project. When this has been certified and the standard has approved the certification report, the carbon offsets can be issued to the standard’s registry, which is publicly available.

5. Each carbon offset represents a reduction of one tonne of CO2 and has a traceable serial number.
Many projects have several co-benefits in addition to the emission reductions. These benefits may include support to local hospitals, schools or healthcare, employment opportunities, preservation of biodiversity or improved indoor climate.

What is Additionality? The additionality of a project means that the project would not have happened without being registered as a carbon offset project. To prove the additionality, the project developer must follow a strict procedure that requires documentation to be verified by an independent third-party. The rules for assessing the additionality of a project changes with time, as common practices change, and technologies become more common and less additional in terms of going beyond “business as usual”. That means that a project that was additional some years ago would not necessarily meet the requirements if they were developed today. Our expert carbon team is able to provide guidance and expertise on this and also ensure that all customers feel confident about their choices.
 
If you are interested in learning more about how your company can become more energy efficient and sustainable through the mechanism of carbon offsets or other emission reductions programs, please contact me to align you with one of our Energy Reduction specialists.
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Gates L. Scott - 303.725.6790 - gascott@world-kinect.com
 

Cold and sustained temperatures ravaged most of the country over the last week. Many homes lost power, most notably in Texas, business closed down for significant amount of time and it seems like the weather crept up on us all.
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We never want these nasty temperatures as our fleets suffer lag in getting back on the road. That’s why World Kinect Energy Services provides trusted, high-quality fuel supply and reliable back up power when it matters most. Preparedness is where we shine. World Kinect Energy Services offers assurance when you need it most, through a comprehensive Crisis Prevention + Readiness Plan designed around your needs in the field.

What your Crisis Plan?
• Do you have a continuity plan that ensures functioning business operations if the power grid goes down?
• What back-up power equipment and storage solutions do you have?
• Who is your back-up fuel and power provider and what is their response time?
• When was the last time checked your back-up power needs?

World Kinect Energy Services Crisis Prevention + Readiness services offer you the peace of mind necessary to navigate whatever comes your way. Be ready, next time disaster strikes or the power grid goes offline.

BEFORE:
Our industry experts conduct a comprehensive survey of your existing power sources, fuel
operations and infrastructure. We then help identify and document what you need in terms of backup power and supply, as part of your business continuity and emergency response plans.
 
DURING:
As the next large scale natural disaster or emergency approaches we become your energy first responders. You’ll know who to contact, where to turn, and what to expect when the power goes out or the fuel supply tightens, even when time and budgets are most strained.
 
AFTER:
Count on us to help you execute that part of your business continuity plan that accounts for phases and recovery back to normalcy. We help you identify lessons learned, and incorporate those back into your emergency response plans.
 
The next disaster or emergency is not a matter of if – it is when. Statistics show it will cost you less to prepare for and address your fuel and power needs now. Don’t wait until the next “big one” hits.
The team at World Kinect Energy Services is here to help. With the global strength of a Fortune 100 company and the personal, local support needed to address your specific needs, we’re uniquely positioned to be there when others are not. Contact us today.

Gates L. Scott
Land Fuel Executive
World Kinect Energy Services
303.725.6790

​Floating storage for crude and refined products has been dropping since April as markets recover. Roughly 30 million barrels of crude and 25 million barrels of oil products have been offloaded as demand has been recovering. Overall, oil prices had their best quarter in 30 years with WTI futures moving up 91% in Q2, but still down 34% since the beginning of 2020. Risks to oil prices to monitor for the balance of year – Presidential elections, Brexit, and COVID.
 
We’re still walking that high-wire, however. Market structure has also pushed traders to close out physical plays for storage as the carry in the market has narrowed making values less attractive to hold barrels as prices are closer to storage costs now. All refiners across the U.S. have shutdown, idled or lowered capacity by 30-40%, not to mention maintenance and other stoppages. We can expect some long lines at the rack this summer.
 
Johns Hopkins Coronavirus Resource Center has global reported cases at 10,538,577 (2,658,324 in US) as of today with deaths at 512,689 globally. Texas has become the epicenter for US outbreaks and caused the governor to roll back phased out reopenings. Arizona, California, and Florida are also pulling back as case numbers rise in these states as well. Fifteen other US states have slowed or backtracked on re-openings.
 
Unemployment remains a key factor for US economic recovery. Employment-population ratios (number of employed people as a percent of adult population) were at 61.2% in January were at 52.8% in May. June jobs report to be released this week will be a key indication if economy is recovering. Home prices were up in April, but recent data shows mortgage demand has fallen for the second straight week which may be a signal that the housing recovery is slowing. Consumer confidence numbers for June beat forecast coming in at 98.1 versus a forecast of 91.0 and up from May’s 85.9. European markets closed higher today on positive coronavirus vaccine news. China’s manufacturing activity beat June expectations.
 

KEEP CALM & CARRY ON
Keeping calm and carrying on has certainly been the theme for oil & fuel markets in the U.S. and abroad. As consumers around the globe appreciate lower, fuel prices and ride the tail end of a bull market, it’s hard to tell where the price of crude oil will be in 2020 both globally and domestically.


The U.S. Energy Information Administration (EIA) expects domestic crude production to increase 1 million barrels a day in 2020. Some other independent market consultants feel that may be too bullish considering the steep drop in drilling activity and tight, financial discipline seen in the U.S. oil industry this year. “Many shale producers continue to have a difficult time breaking even under today’s oil prices, and investors have become fed up with capital destruction in the sector. Oil service companies have taken significant steps to improve razor-thin margins, laying off workers, reducing drilling and fracking capacity and of course re-thinking their business models”, says analysts from Forbes. Some drillers and fracking companies have seen their credit lines reduced, limited access to fresh capital and this curtailment in lending is at the expense of shareholders and investors. Twice a year in the spring and fall, banks re-access their credit lines to shale drillers and decide how much they’ll authorize companies to borrow. This will be the first time in almost 3 years that lenders have tighten their preverbal belts. As a result, drillers have been forced to optimize margins, profits and dividends at the expense of capital growth to avoid a complete nose dive in stock prices.


To give some perspective, OPEC crude oil production in 2019 was roughly 29.9 mb/d expected to decrease to 28.9 mb/d in 2020. On the flip, non-OPEC crude oil producers output is expected to grow to  2.3mb/d in 2020, an increase 500K b/d. So, with decreases in OPEC production growth added with stagnant or uncertain U.S. drilling growth and continued sanctions on Iran, Lybia and Venezuala, the new year could bring a slight rise in oil prices, but most likely we’ll see price levels similar to 2019.


The IEA World Energy Outlook 2019 published this week highlights the increasing disparity between calm oil markets of today and heightened geopolitical tensions. The calmness is supported by a well-supplied market with high inventories. (PADD 4 in the Rocky Mountain region has experienced, despite some swings of inventories, a relatively uneventful market due to declining demand.) Given the cyclical nature of refining, oil producers have oversupplied the market in past years and decisions at the recent OPEC meetings in December 2019 are to cut production and clear the product globally. The U.S. will again lead the way in supply growth in the new year along with Brazil, Norway and barrels from new producer, Guyana.  However, oil demand globally is still relatively unchanged @ 1-1.2 mb/d and the health of the global economy remains a bit uncertain given the US-China trade dispute.


A ramp up in refinery activity sets the stage for smooth IMO 2020 implementation of new bunker regulations in January 2020. Port, ship owners and refiners and hubs in Rotterdam, Fujairah, and Singapore have stepped up their preparations. (In the case of Singapore, one of the top 2 Ultra Large Crude Carriers in the world is being used to store low sulphur fuel oil and marine gasoil offshore.) As a result of these implementations, some negative consequences may occur: the cost of high sulphur fuels will likely plummet and compliant suppliers may not be available in sufficient quantities in smaller ports and for smaller ships certainly creating dislocations and lack of needed supply driving prices up.


Continued production and now an oversupply since 2018 has led to abundant inventories and the forward, price futures’ curve into contango (where price futures are higher than the spot price, although signifying a rise over time). As demand expectations and sector sentiment grow and OPEC+ maintains discipline over production levels, we may see market fundamentals resulting in average prices in the US60-70/bbl range until 2020. After 2020, prices are estimated to remain closer to USD60/bbl driven by increasing and sluggish demand and the continued growth of shale oil in North America as operators lean toward shorter-lead, higher margin projects. (Unfortunately, credit markets won’t allow producers to go all in on capital investments or longer-term projects due to lending scrutiny) In the scenario where the global economy slows down even more, prices could continue to fall if OPEC chooses not to intervene and make the cuts necessary to keep prices higher. On the contrary, prices could balloon and reach USD80-90/bbl with supply disruptions from a shipping industry that may not be fully prepared for their low sulphur fuel transition. Additionally, drops in production from Iran and Venezuela and OPEC’s spare capacity tightening could send prices higher as well.


Again, the theme still suggests all of us to remain calm and carry on. Despite the US/China trade war, the readiness of the global shipping industry, and decreasing global growth, we’re still unsure how this affects our business at home. The Rocky Mountain region is subject to terminal functionalities and capabilities, supply accessibility in the region, competitive suppliers in the market and a host of other factors (like weather) that will affect your fuel in 2020. The western U.S. still continues to see growth in the Front Range of Denver, Salt Lake and other smaller markets like Boise, Idaho. With that growth comes demand for goods, services, and homes which drives construction and infrastructure improvements. Transportation companies and construction contractors will experience a growth in demand for all sorts of fuel and petrochemicals to run and maintain fleets and equipment across the region as this trend continues across the region.
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World Kinect Energy Services continues to be at the forefront of fuel management, supply and delivery services across the region and U.S. No matter what the market conditions, we continue to have advantageous supply positions, will provide the best prices and exemplary services helping customers benefit from a prosperous New Year.

As I travel around and speak to many customers who operate heavy equipment and Class 8 vehicles, my goal is to determine how much fuel they burn annually and provide the best price and service based on those estimates. 

I'm always curious on how much fuel is burned or consumed on an annual basis by all sorts of contractors and transportation companies. This information is obviously helpful in my work, however it brings me back to the cockpit of an airplane or helicopter where fuel burn is a crucial element in flight. Burn rates are critical in calculating flight performance and range. So, I wanted to find out how much these industrial machines burn and what contributes to the amount of fuel, operating under various conditions, these Class 8 vehicles actually consume. 

The two factors affecting the average annual fuel use of a vehicle are the average miles per year and the fuel economy of the vehicle. Transit buses or Refuse trucks for instance are relatively inefficient due to their stop-and-go drive cycles and heavy loads, consume more fuel on average than any other vehicle type. Class 8 trucks, which typically travel long distances carrying heavy loads use less fuel, naturally. And, lastly, To give it some perspective, the vehicles you and I use  use a fraction of the fuel used by fleet-based vehicles, on a per-vehicle basis. However, many additional factors like type of use, wear and tear and other humanely-induced usage can affect the vehicles burn rate. 

Similar to aircraft traveling through the air, trucks also travel through the air (relatively speaking)  with additional force acting upon it. The main force that affects fuel economy with larger, Class 8 vehicles is drag. (And let me tell you, it's a drag). In some studies, research has shown that Class 8 vehicles can burn up to 13,000 gallons per year. Not to mention the cost the business' investment in fuel annually, but emissions and environmental regulations, operators have now started to seriously consider how to manage these costs and run cleaner.

With the onset of fleet technologies and tractor-trailer "sculpting", operators are finding creative ways to eliminate drag as did the aircraft industry. Forces on the tractor trailer moving down the road are again similar to the (4) forces of flight (lift, thrust, drag and gravity) experienced in an aircraft. You can see from the picture below that there are a number of trouble spots that add to the drag and inefficiency of the vehicle.

Nothing has transformed the ability of on-highway Class 8 tractors to get better fuel economy more than the use of aerodynamics to sculpt and guide the flow of air around the truck and trailer in order to cut through the air more efficiently. But because airflow is invisible, aerodynamics can be frustrating for many fleet managers.

A full suite of aerodynamic devices have been adopted on vehicles including FlowBelow’s undercarriage system, wheel covers, Fleet Engineers AeroSaver Classic side skirts that cover the landing gear, Stemco TrailerTail, a nose cone, Fleet Engineers AeroFlap mudflaps, and cross-member shields. Some operators also are finding solutions of their own from taking a power saw to a set of mud flaps sticking too far into the slipstream around the truck. Some truck features include relocated and recessed license plate, or even rain gutters that are plated over to smooth out airflow. Other trucks and trailers with application-specific aerodynamics, including aerodynamic skirts on regional haul trailers reduce wind drag under the rear tandems of the trailer. Concept trucks like the Super-Walmart transport vehicle below are those designs that will re-invent manufacturing process to eliminate drag and provide a great deal of fuel efficiency for transport vehicles. 

World Fuel Services provides direct delivery & tankwagon fuel deliveries to remote construction sites as well as Fleet Fueling services that saves $$ at the pump and most importantly time for drivers to fuel up!

​Crude oil prices today remain subdued, continuing to recede for the second day following their sustained upward streak. WTI (West Texas Intermediate) crude forward prices opened at $50.78/b today, down by $0.95 (1.84%) from yesterday’s opening price of $51.73/b. Last week, crude oil reclaimed highs of $52-$53/b, but prices began to subside on Friday. Gasoline and diesel forward prices also opened with losses today. Crude and product prices are trading up and down today, awaiting guidance. Markets are mixed, with the U.S. government shutdown muddying the market outlook.

The U.S. federal government is in day 25 of shutdown, and U.S. President Donald Trump says he will not sign any measures for stopgap funding unless they include funds for his border wall. Historically, a short shutdown can have implications that are relatively minor. But a long shutdown gets exponentially worse, causing social, economic and environmental problems that grow increasingly severe. Delta Airlines, for example, reports that the shutdown will cost it $25 million this month, and that spotty security allowed a passenger to get through security with a gun. National parks are overflowing with garbage and human waste, and vandals have even killed some iconic Joshua trees in the Joshua Tree National Park.
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The overall picture is of a U.S. so badly led that global markets are looking elsewhere for positive signals today. China, for example, is responding quickly to a major slowdown in its imports and exports. The Chinese government pledged to keep monetary policy flexible and to improve access to financing for businesses. Economic advisors believe that Chinese tax cuts will stimulate GDP growth. Chinese company shares rose on the announcement, and also on hopes that the Chinese leadership will work harder to resolve trade disputes with the U.S. later this month. Markets also await news from the American Petroleum Institute on U.S. oil stockpiles, which are expected to show a drawdown from crude inventories and a build in product inventories.

Oil prices remain strong today, though the upward momentum has slowed. WTI (West Texas Intermediate) crude forward prices opened at $48.30/b today, an increase of $1.40 (2.99%) from Friday’s opening price of $46.90/b. Gasoline and diesel forward prices also opened higher today. All are working to hold their gains this morning. Market optimism is strong today, with renewed talks between the U.S. and China on the trade war. The first day of negotiation looks promising, with the surprise appearance of Chinese Vice Premier Liu He heading what was expected to be a lower-ranking delegation.

Global stock markets are shaken today by news that Apple cut its forecast of revenues, citing poor demand in China. This is seen as evidence that the U.S.-China trade war and slowing growth in China’s economy is having a larger-than-expected impact on Apple’s corporate profits. It is the first time in 15 years that Apple has cut its quarterly revenue forecast. Apple stock is a member of all three major Wall Street indices. This news is expected to diminish the recent recovery in equities and increase safe-haven investments. It may also stall today’s rally in oil prices. As of the time of this writing, the Dow Jones Industrial Average has just opened down by 320 points.

Pricing across the global energy markets will face headwinds in 2019, with a weaker and more uncertain macroeconomic framework deflating price formation in general, according to two special reports just issued by S&P Global Platts Analytics. Such headwinds will require the industry and portfolio managers to take a big-picture approach.
Particularly blustery head winds are in store for markets where prices finished 2018 at elevated levels, and well above costs, such as North American natural gas and global coal. However, if the supply side can adjust to the reality of slowing demand growth, energy prices can find support. For natural gas liquids (NGLs), the ongoing logistical constraints at the US Gulf Coast are likely to manifest on continued price volatility, particularly for ethane and liquid petroleum gas (LPG), over the next year despite strong global demand.

Access the full S&P Global Platts Analytics Top Factors to Look Out For in 2019 for Energy here.
Among the 22 key take-away themes:

• NGL supply growth will strain the North American energy system
• Saudi Arabia will need to be nimble to balance 2019 oil supply
• US oil supply limited by pipelines
• Oil demand slowing: trade war, industrial slump
• 2019 LNG supply additions largest since the Qatari mega-trains
• US gas supply growth to exceed demand growth even with LNG exports
• Shipping disruption looming – IMO 2020
• New Russian gas pipeline advantage over Ukraine
• US coal demand to decline again in 2019
• Growth in new refineries and complex capacity likely to weigh on refinery margins especially in Asia

Information gathered with help from Fuel Market Reports and S&P Global Platts Analytics

WTI closed higher today in spite of another large week of builds as market focused on the draw down in refined product stocks with refineries increasing output and imports falling for products. Oil complex was not in tandem with stocks today when it has been for some time, so that is an interesting move we will watch to see if pattern persists. Geopolitical fairly unchanged, economic news was mostly bullish, and weather seems to be leaning towards a colder than normal winter for much of the nation.

Refinery utilizations were up 0.4% at 89.2% this week. Imports were up for crude, but down for gasoline and distillates. Apparent demand for gasoline fell this week, while distillate demand rose.

Key Price Drivers
GEOPOLITICAL – Saudi Crown Prince has vowed to bring justice to Khashoggi’s killers after a phone call with Turkish President Erdogan. EU leaders say they are willing to extend the transition period for Brexit to allow for a smoother exit of the UK from the bloc. Communal clashes in Nigeria have forced officials to impose a 24-hour curfew hoping to gain control of the situation. Afghanistan parliamentary elections were extended one day (Sunday) to allow voters sufficient time to cast votes due to security threats and logistical issues. Other regions of the country will be voting later, but signs are promising that vast majority are willing to stand up for democracy.
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ECONOMIC – Fed remains committed to pulling back on stimulus and increasing interest rates slowly to prevent an overheated economy. Jobless rate remains around 3.7 percent which is considerably below what is considered full employment. Market still anticipates another rate increase in December with three more in 2019 and possibly two in 2020. Consumer sentiment supports a growing economy and major retail CEO’s are seeing that reflected in their business. New home sales have fallen in September blamed on higher interest rates and possible lower inventory particularly in Southeast due to hurricane impact.
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For more information, contact - Gates L. Scott - gascott@wfscorp.com - 303.358.2977