Fuel Demand for 2009, Projections Cut?

If you read yesterday's Fuel Advise, Sokolis Group basically said what is keeping these fuel prices high. We had no real answer, we wish we did but it's been a bullish fuel market, which has made fuel cost raise. Now new fuel news today.

Fuel fell to settle near $50 a barrel on Monday after the International Energy Agency cut deeply its forecast for fuel demand, offsetting the impact of data showing Chinese crude imports rose to their second highest ever.

The IEA said on Friday world oil demand would fall by 2.4 million barrels per day (bpd) this year compared with 2008 as the rate of contraction in fuel consumption reached levels last seen in the early 1980s.

Does this really surprise anyone? The World is in a recession and unless you are in a cave in Afghanistan you have known this for several months now. It's called basic supply and demand principles. Not enough demand for fuel to meet the building supply for fuel.

So now what is going to happen? Dealers will be listening for any confirmation of the IEA's demand forecast this week. The U.S. Energy Information Administration releases its short-term energy outlook on Tuesday and OPEC publishes its monthly view on Wednesday. If the market feels the fuel projection numbers are wrong by the IEA and the others project a more promising future for fuel cost to go higher, than the fuel market will take off later this week.

On the other hand, if they all come in saying basically the same thing that the economy is in the drain and fuel prices will remain in the drain as long as the economy does or until OPEC cuts products, then we could see this market fall to under $40 a barrel fairly quickly over the next week.

If you just want to make sure that you are buying gas and diesel fuel at the best rate possible along with having a company with full fuel knowledge not only looking over you shoulder but sitting on it, then you want to hire Sokolis Group for our nationwide outsourced fuel management & fuel consulting programs. We clear all of the mess out of the way, so all you get is fuel cost facts, gas price information, diesel fuel discounts and a completely professional fuel managed program. www.SokolisGroup.com or call one of our fuel friendly customer service professionals at 267-482-6155.