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Market Close: April 04 Up

Fueling Strategy: Please partial fill only tonight, Wednesday AM wholesale prices will fall a penny – Be Safe Today

NYMEX Crude $ 51.13 UP $.7900
NY Harbor ULSD $1.5923 UP $.0289
NYMEX Gasoline $1.7217 UP $.0280

NEWS
Oil prices rebounded to settle at a four-week high after a choppy start Tuesday, rising on expectations weekly U.S. crude-inventories data would show a decline as refineries work to keep up with rising gasoline demand.

West Texas Intermediate crude oil for May delivery rose 79 cents, or 1.6%, to settle at $51.03 a barrel on the New York Mercantile Exchange. At London’s Intercontinental Exchange, Brent for LCOM7, +2.18% June delivery added $1.05, or 2%, to finish at $54.17 a barrel. Those were the highest closes for both benchmarks since March 7.

Earlier in the session, WTI dipped below $50, before oil futures regained their footing. A strong pickup in refinery utilization rates in recent weeks is contributing to expectations that official weekly inventory data from the Energy Information Administration, due Wednesday, will show a fall in U.S. oil stocks, said Robert Yawger, energy analyst at Mizuho, in a phone interview.

While Yawger said he is skeptical the data would show a decline in inventories, expectations for a decline have been encouraged in part by last week’s data that showed refinery utilization rose to 89.3% from 87.4% the previous week. Utilization is up from a 2017 low of 84.3% in the week ended February 17. A rule of thumb holds that every percentage point rise in the utilization rate equals around 150,000 barrels a day of crude. A nearly 5 percentage point rise in utilization in the last two reports means an additional 600,000 to 800,000 barrels a day of demand, Yawger noted. Strong demand for gasoline is seen as a factor driving refinery utilization. Indeed, gasoline futures continued to rally, hitting a 19-month high. But Yawger said he doubts the draw in inventories will occur due to a contango in oil futures. Contango is a condition in which longer-dated futures contracts trade at a premium to nearby futures, creating an incentive to store crude.

December WTI crude for example, trades at $52.60 a barrel, a roughly $1.70 premium to nearby May futures. The dip by futures in early trade, meanwhile, saw WTI “establish support at the psychological $50 level with the attention turning towards API and EIA where a small stock reduction is forecast,” said Ole Hansen, head of commodity strategy at Saxo Bank, in emailed comments.

The American Petroleum Institute, or API, an industry trade group, is scheduled to release its weekly inventory data late Tuesday afternoon. Weekly EIA data is set for release Wednesday morning. Data last week showed signs of rising fuel demand in the U.S. and falling product inventories, helping to send crude futures to a more than three-week high on Friday.

Categories: Fuel News
loren: Fuel Manager Services Inc. "Serving the trucking industry since 1992" I've been in and around the trucking industry for 45-years beginning in owner operator operations at Willis Shaw Express. I bought a small trucking company that I ran for 6-years then sold and went to work for J.B. Hunt Transport in 1982. After 10-years with Hunt, I started Fuel Manager Services, Inc., we are in our 29th year of serving the American trucking companies. Our simple goal was and is to bridge the gap between the trucking companies and the fuel suppliers.