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Wholesale Gasoline Prices Have Dropped To Their Lowest Levels Since Last Christmas
Wholesale gasoline prices have dropped to their lowest levels since last Christmas, after 3 weeks of selling that will give consumers across most of the country something to be thankful for this week. Crude oil and diesel prices have also come under pressure and are currently holding near technical support levels that look pivotal for price action for the remainder of the year.
One unusual note about this selloff: WTI has slipped into a slight contango with the December contract trading roughly 20 cents less than January, a phenomenon we haven’t seen in over a year. That shift in the price curve follows reports that European refiners are actually oversupplied with crude oil, as traders have done too good of a job preparing for the upcoming embargo on Russian imports. Now that crude oil inventories are filling up ahead of their December deadline, the question is if the same feat can be accomplished for diesel before that ban hits in February.
Right on cue, Kuwait’s new 600mb/day refinery, the largest in the Middle East, continues to slowly bring units online, and reportedly sold its first distillate cargo into the export market this week. While the new refining capacity is certainly welcomed in a world starving for diesel fuel, the challenge will be finding enough cargoes to get that fuel where it needs to go, and tanker rates that are surging as a result.
Meanwhile, while many headlines focused on Qatar not serving beer at the world cup, the country was closing on the longest supply deal in history to supply China with LNG for 27 years. Long term deals are critical in the LNG market that requires billion dollar facilities to be able to freeze the gas before it can be loaded on ships, and as part of the reason the world is essentially “sold out” on new LNG for the next 3-4 years.
Money managers reduced their length in petroleum contracts last week with a combination of new short positions and liquidated longs both contributing to the drop. The total positions held, and the open interest in all contracts continues to suggest there’s plenty of money that’s not playing in the energy arena these days, and whether or not it ever comes back may have a large impact on how prices behave in the coming year.
Baker Hughes reported a net increase of 1 oil rig and 2 natural gas rigs drilling in the US last week. The total of 623 oil rigs is the highest since the pandemic shutdown started in March 2023, but is still 60 rigs lower than pre-COVID levels.
The Energy Complex Is Seeing A Third Straight Day Of Heavy Selling To Start Friday’s Session
The energy complex is seeing a third straight day of heavy selling to start Friday’s session, with WTI once again dropping below $80/barrel and gasoline prices across large parts of the US approaching their lowest levels of the year. ULSD has also given up its relative strength temporarily as time, crack and basis spreads have all come under heavy selling pressure this week, and outright prices dropping below $3.50, which sets up a potential test of the $3.10 range in the coming weeks.
On November 8th, prompt ULSD in New York cost $4.97/gallon, and today will go for around $3.70 as the best cure for high prices is high prices motto played out once again and resupply options from around the world are starting to reach the harbor. It’s worth noting that despite the big drop in New York values, the price to buy space on Colonial’s diesel line, or the other smaller lines moving product North and West, have continued to move higher as it looks like the Gulf Coast will be long distillates for some time as transportation options struggle to keep up with production.
The West Coast has seen a similar phenomenon with gasoline prices over the past 10 days, with LA and San Francisco CARBOB values dropping roughly $1/gallon in the past 10 days after a refinery fire turned out to be a non-event, and run rates in the region have moved to above average levels in the past few weeks.
The forward curve charts below show that the selling in refined products over the past month has been fairly steady across the next 3 years, reinforcing the idea that this pullback has to do with concerns about consumption, rather than an easing of the tight supply situation. Crude oil on the other hand has actually seen values in the outer months tick higher while more current prices have dropped, which could be a sign that refiners may be selling forward cracks (short products/long crude) to lock in values that are historically very high, even if they’re not record setting like we’ve seen this year.
The scramble continues to save an Italian oil refinery that will be forced to close once Europe’s oil embargo on Russian crude takes effect in a few weeks. That refinery has become a microcosm for global energy supplies as Europe desperately needs all the distillate output from the facility, while the plant has also become a notable “loophole” to get Russian oil to the US.
Click here to download a PDF of today's TACenergy Market Talk.
Energy Futures Are Bouncing This Morning After Heating And Crude Oil Futures Carved Out Fresh Multi-Month Lows
Energy futures are bouncing this morning after heating and crude oil futures carved out fresh multi-month lows. The prompt month distillate contract is leading the way higher this morning, trading up over a dime to start the day.
Gasoline prices are exchanging hands 4 ½ cents higher than they settled yesterday. WTI futures are up over $1 per barrel.
Hurricane Ian is dominating both national and industry-specific headlines as it makes landfall in Cuba this morning. Localized flooding, high winds, and a sizeable storm surge are the main concerns of the residents in its path, namely the densely populated Tampa Bay area.
As of now, oil production platform closures and the temporary shuttering of refined product terminals along the storm’s path are the only impacts Ian has had on energy infrastructure.
But prices just came down? There are increasing calls from market participants (investment banks) for OPEC’n’friends to cut back supply in an effort to put a floor under oil prices.
KTBS 3 Spotlight on TACenergy Leadership COO Fred Sloan - Sharing Thoughts on Changes in the Gas Market
Oil and Gas Prices Impacted by Tensions Oversees
Feb. 25, 2022
By JULIE PARR, KTBS TV
CLICK HERE to view read the original story on KTBS.com>
DALLAS, Texas - A Texas-based fuel supplier says gas prices will likely go up some more before they go down.
TAC Energy CEO Fred Sloan says crude oil prices have been going up over the past year. He says prices are about 35% higher than they were a year ago.
While the war in Ukraine has created some uncertainties in the energy market, Sloan says oil and gas supplies are not an issue for the U.S., and he doesn't believe gas prices will go up dramatically.
"The U.S. market is super elastic, and the U.S. crude supply is not at risk, refinery operations are not at risk, and the fuel that is at the gas station down the street will be there," said Sloan.
He says gas prices are expected to slightly increase in the spring and summer as usual, but as long as there's no major escalations in Europe, prices should slowly decrease of the course of the year.
"Now again, it will be volatile for a while, but the fact of the matter is there is no major supply demand influence that's going to cause prices in our region to get above where we are today," said Sloan.
Meanwhile, Sloan says the Ukraine invasion could have more of an impact on the global grain supply.
Russia and Ukraine together produce nearly a quarter of the world’s wheat.
TACenergy COO Fred Sloan Elected to SIGMA Board of Directors
FOR IMMEDIATE RELEASE
CONTACT: Tad W Perryman, VP Marketing
Dallas, Texas (November 19, 2020) – Fred Sloan, Chief Operating Officer (COO) of TACenergy, a division of TAC - The Arnold Companies, has been elected to the Board of Directors for the Society of Independent Gasoline Marketers of America (SIGMA).
Founded in 1958, SIGMA is the national trade association representing the most successful, progressive and innovative fuel marketers and chain retailers in the United States and Canada. The association has served to further the interests of both branded and unbranded segments of the industry while providing information and services to members.
Sloan has been actively involved as a member of the SIGMA organization since joining TAC in 2013. During this time, he has served on several of the organizations’ committees, including the Young Executive Committee from 2013-2016, Membership Committee from 2015-2016 and the Legislative Committee starting in 2019-2020, and will continue to remain active this next year.
Sloan, who has served as TACenergy COO since 2013, looks forward to harnessing and uniting the capabilities of both organizations in his new role as a SIGMA Board Member furthering education and innovation within the fuel marketing industry as a whole, from upstream to midstream and downstream to the customer. TACenergy serves the midstream fuel market, with volumes exceeding two and a half billion gallons annually from a vast terminal supply network and regional sales offices located across the United States. Sloan also serves on the Board of the Texas Food and Fuel Association and holds positions on several charity boards in the Dallas Metro area.
“I look forward to joining fellow board members and industry leaders through active participation in the growth, education and support of strengthening one of the nation’s core infrastructure needs of supplying fuel to our growing economy. It is my honor to move to a higher level of engagement with this association supporting our industry on a national level via legislative, safety and regulatory efforts by having a seat at the table when federal, and in some cases states, make decisions that impact industry activity. I hope to add value leveraging the TACenergy network of customers, suppliers, carriers and ancillary supporting companies as they are integrally tied to the industry success.”
Sloan is a strategic commercial leader experienced in business line management, physical and futures markets, manufacturing, logistics, operations, P/L and procurement/sales activities. His background includes a Drexel education, with a Chemical Engineering Degree and an MBA in Finance. Sloan is an expert in risk management, inventory management, and developing new businesses. His experience leading large groups of sales and operations personnel, traders, manufacturing personnel and engineers in business functions and across technical areas consistently exceeds goals through leading by communicating. His communication and analytical skills cultivates productive internal and customer relationships and produces synergistic team work. Throughout his career, Sloan has focused on manufacturing operations and technical development, business management and commercial activities.
TACenergy is a Dallas, Texas based independent national wholesale distributor of refined petroleum products. Customers include branded and unbranded gasoline, as well as diesel retailers, industrial users, transportation, trucking, government, utilities, mining, construction, plus many other commercial user or resellers of fuel. TACenergy delivers added value to its customers through customized fuel management programs, a 24/7 Supply & Logistics call center and comprehensive carrier agreements. TACenergy has an annualized fuel volume exceeding 2.7 billion gallons, and a vast terminal supply network with fourteen regional sales offices spanning North America. TACenergy is a division of TAC - The Arnold Companies, a Texas-based aviation and energy marketing company. Learn more at www.tacenergy.com and www.thearnoldcos.com.
Founded in 1958 as the Society of Independent Gasoline Marketers of America (SIGMA), SIGMA has become a fixture in the motor fuel marketing industry. After sixty years of leadership, SIGMA is the national trade association representing the most successful, progressive, and innovative fuel marketers and chain retailers in the United States and Canada. From the outset, the association has served to further the interests of both the branded and unbranded segment of the industry while providing information and services to members.
SIGMA’s approximately 260 corporate members command more 50 percent of the petroleum retail market, selling approximately 80 billion gallons of motor fuel each year. These member companies operate throughout the United States and Canada.
SIGMA’s benefits to member companies include government relations representation before Congress and the Administration, a wide variety of publications and timely mailings, as well as legal advice. The association holds meetings throughout the year to allow marketers and fuel suppliers to meet one-on-one and to give members a chance to participate in informative educational sessions. Leadership of the organization is provided by volunteers from SIGMA’s member companies, giving the association the advantage of advice from some of the most well-respected entrepreneurs in the nation. Learn more at www.sigma.org.
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The Arnold Companies makes major West Coast acquisition
The Arnold Companies makes major West Coast acquisition, expanding the TACenergy supply network and increasing operational efficiencies
Expanding west coast presence and broadening product opportunities extends TACenergy opportunities for growth
Dallas, Texas (November 1, 2019) – TACenergy, a division of The Arnold Companies (TAC), acquires the U.S. wholesale petroleum distribution business of IPC (USA), Inc. (“IPC”) effective November 1, 2019. Terms of the sale between the companies are not being disclosed.
Increasing its west coast presence with a majority of the IPC sales team, TACenergy will maintain offices in Santa Ana, CA, Sacramento, CA and Seattle, WA. The shared expertise and TACenergy resources will allow local sales to continue providing the service expected by existing IPC customers. Along with the competitive fuel prices and reliable supply the TACenergy network offers expanded opportunities to all customers.
“We are very excited to bring on an experienced west coast sales force. The combined team will have a stronger supply footprint, a more efficient administrative machine and the same strong level of service the customer base has experienced,” said TAC Chairman and CEO, Greg Arnold.
Fred Sloan, Chief Operating Officer of TACenergy stated, “We are already working to harness the expertise of both groups to deliver innovation across the wholesale fuel sales network, leveraging national supply resources and managing administrative and logistics capabilities.” Sloan also added, “The acquisition builds upon the existing relationships of unbranded and branded fuel products which include Sinclair gasoline and Neste MY renewable diesel, allowing TACenergy to expand into the renewable diesel category and provide new alternatives for existing customers.”
Image: TACenergy leadership gather to welcome new West Coast associates.Left to Right: Mitch Lewis, General Manager of Sales, SouthwestFred Sloan, Chief Operating OfficerRandy Jones, Vice President of Sales and Operations
Maintaining the west coast offices to strengthen presence in the area for TACenergy, customers will continue working with the people they know. Ted Tanaka, CEO of IPC shared with his team and customers, “Joining the IPC business into the TACenergy network builds an unbeatable combination of services and products to help our customers deliver the same. From the supply network, trading capabilities and office services that provide unprecedented accuracy, the combined expertise will lead the wholesale fuel industry.”
Many of the key operational and sales management team members will be joining TACenergy, including Randy Jones, who joins TACenergy as Vice President of Sales and Operations, covering the combined national footprint of the organization. Mitch Lewis, General Manager of Sales, leading Southern California sales. Jim Harper, General Manager of Sales, managing Northern California and Pacific Northwest sales. All three positions report to Chief Operating Officer, Fred Sloan. Together, the combined team of industry leaders, from back office to frontline sales will position TACenergy to be one of the largest national wholesale fuel suppliers in the country, with annual sales exceeding 2.7 billion gallons and well over $5 billion in revenue.
TACenergy is a Dallas, Texas based independent national wholesale distributor of refined petroleum products. Customers include branded and unbranded gasoline, as well as diesel retailers, industrial users, transportation, trucking, government, utilities, mining, construction, plus any other commercial user or reseller of fuel. TACenergy delivers added value to its customers through customized fuel management programs, a 24/7 Supply & Logistics call center and comprehensive carrier agreements. TACenergy has an annualized fuel volume exceeding 2.7 billion gallons, and a vast terminal supply network with fourteen regional sales offices spanning North America. TACenergy is a division of TAC – The Arnold Companies, a Texas-based aviation and energy marketing company.
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FOR IMMEDIATE RELEASE
CONTACT: Tad W Perryman, VP Marketing