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

NYMEX Crude $ 49.56 UP $.3300
NY Harbor ULSD $1.5452 UP $.0025
NYMEX Gasoline $1.6230 UP $.0016

NEWS
Oil futures settled higher on Tuesday, ending a six-session losing streak that had taken the U.S. benchmark to its lowest settlement of the month.

But gains for the commodity were modest, as traders continued to show concerns over growth in U.S. oil production and doubts that OPEC can effectively lead the market back into balance after several years of oversupply.

On the New York Mercantile Exchange, June West Texas Intermediate crude climbed by 33 cents, or 0.7%, to settle at $49.56 a barrel. The rise didn’t quite make up for Monday’s loss of 0.8%, or 39 cents a barrel. Monday’s settlement at $49.23 was the lowest since March 28 and followed five straight sessions of declines, according to FactSet data. June Brent crude the global oil benchmark, added 50 cents, or 1%, to $52.10 a barrel on London’s ICE Futures exchange.

“Oil markets may be destined for further punishment as the persistent oversupply woes inhibit investor attraction towards the commodity,” said Lukman Otunuga, research analyst at FXTM, in a note Tuesday. “Although [the Organization of the Petroleum Exporting Countries have] maintained their optimism over the supply cuts stabilizing the saturated oil markets, the big elephant in the room, known as U.S. shale, continues to obstruct the cartel’s valiant efforts to trim the global glut,” he said. Otunuga said that from a technical standpoint, previous support around $50 could “transform into a dynamic resistance that encourages a decline towards $49 and $48 respectively.”

OPEC and other major producers agreed to cut production by 1.8 million barrels a day in the first half of 2017 but because global stocks have remained high, the cartel is now expected to extend the deal when it meets in May. “Until OPEC announces an official decision on whether to extend the production cuts, the main focus of the market will be on that,” said Nelson Wang, an energy analyst at CLSA.

Wang estimates only around 70% of available oil rigs in the U.S. are currently in operation despite persistent growth this year in drilling activity there. Baker Hughes’s BHI, +1.09% closely watched oil-rig count is at its highest level in nearly two years. “This means there is a lot of upside risk to U.S. supplies,” Wang said.

Have a great day,

Loren R. Bailey, President
FUEL MANAGER SERVICES INC
“Serving the Trucking Industry Since 1992”