On Monday AM the fuel market falls below $65 a barrel. Is this a surprise for fuel management firms looking at the fuel market? No. Is it a surprise for people that follow current events and saw that Iran fired missiles off Monday despite what they had said a few days earlier?
These are not people that can be trusted. Not necessarily Iranian people but the powers to be in Iran. Do you want to watch your fuel planning, fuel budget and fuel program go up in smoke or I should say go to $100 a barrel quickly or have fleet fuel go to $4.50 for diesel fuel and $4.00 for gas prices? Watch how non peace in the Middle East from one of the top fuel producers will do that. Your fuel management and fleet fueling program will need a lot of TLC.
Right now we can be talking about the calm before the fuel storm. Fuel consulting won’t even be able to help much if this kicks into gear.
“The Iranian situation is not having much influence. If it was, we’d be back toward $70 again.”
Iran test-fired a type of missile on Monday which defense analysts have said could hit Israel and U.S. bases in the Gulf region, state television reported.
The drills coincide with increased tension in Iran’s nuclear dispute with the West, after last week’s disclosure by Tehran that it is building a second uranium enrichment plant.
Tensions over Tehran’s nuclear program have supported oil prices in recent years. The country is the second-largest oil producer in the Middle East and a major crude oil exporter.
In late 2008, Iran threatened to block the Strait of Hormuz, through which about 40 percent of the world’s globally traded oil passes, when tensions rose in another row with the United States around the nuclear work.
Even so, sluggish oil demand, reinforced by some lackluster economic data from the United States last week, continued to command investors’ attention.
Oil prices posted their largest weekly decline in around 2-3 months last week, pressured by government data showing U.S. crude oil inventories had risen, suggesting demand remains weak.
This should be your fuel management plan. First have a fuel management plan. Second, start looking at your fuel planning from the price protection side of things. You don’t want your fleet fueling program to be caught with its pants down. Have senior staff put together a program or hire a fuel consulting company to lay this out for you. Do you really want to be paying $5.00 again for diesel fuel? I am not saying it is going to happen, but you just don’t know about fuel prices and the Middle East.