AAA Daily Fuel Gauge Report for Friday, 12/22/23

Oil has struggled to recover losses from last month’s broader market slump after topping $66 a barrel in January. While a brighter economic outlook has underpinned demand expectations following a better-than-expected U.S. jobs report, expanding American production remains a challenge to the Organization of Petroleum Exporting Countries and its allies, which are trying to prop up prices via output curbs. Production from shale regions will reach 6.95 million barrels a day next month, the U.S. Energy Information Administration said in its monthly drilling report. The Permian Basin is seen leading the way with an 80,000-barrel increase. Total American output has passed 10 million barrels a day, beating a record set in 1970. Click Read More below for additional information.

Authorities say nobody has been hurt after a contractor accidentally cut an underground crude oil pipeline in Central Texas and caused about 50,000 gallons (189,265 liters) to spill. A spokesman with Magellan Midstream Partners of Tulsa, Oklahoma, says cleanup has begun at the rural site near Bastrop, about 30 miles (48 kilometers) east of Austin. Emergency responders ordered a 1-mile (1.6-kilometer) area evacuated around the spill location, as a precaution. Nearby Farm-to-Market 20 was closed in both directions. Click Read More below for more of the story.

Motor fuel prices fell 0.7 percent in New York, while crude futures slipped from the lowest closing level in five weeks. Valero Energy Corp. and Citgo Petroleum Corp. were said to be preparing to restart their refineries in Corpus Christi after Harvey moved through over the weekend. The storm, which made landfall on Friday, is poised to regain strength before crashing ashore again near the Texas-Louisiana border on Wednesday. “It is a question of the market reassessing the risk to refineries while also concluding we are past the peak season in terms of demand,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen. “We are seasonally heading towards a lower demand period which means that any signs of things beginning to normalize could have quite a negative impact on prices.” Click Read More below for additional detail.