Market Close: Aug 07 Down
Aug 7th, 2017 by loren
Fueling Strategy: Please fill as needed tonight – Be Safe
NYMEX Crude $ 49.39 DN $.1900
NY Harbor ULSD $1.6398 DN $.0088
NYMEX Gasoline $1.6299 DN $.0199
NEWS
Oil futures bounced off intraday lows but still finished lower Monday on concerns about major oil producers’ wavering commitment to output caps as a meeting of the Organization of the Petroleum Exporting Countries gets under way. The two-day gathering in Abu Dhabi, United Arab Emirates, will focus on members’ compliance with the output pact the cartel signed with 10 other oil suppliers, including Russia, in late 2016. The deal so far hasn’t produced meaningful effect in tamping down global output or inventories.
On the New York Mercantile Exchange, crude futures for delivery in September dropped 19 cents, or 0.4%, to settle at $49.39 a barrel in the Globex electronic session. October Brent crude on London’s ICE Futures shed 5 cents, or 0.1%, to settle at $52.37 a barrel. “Spot prices, we feel, are going to be rather choppy as we await the decision from the OPEC compliance meeting,” said Tariq Zahir, a managing member at Tyche Capital Advisors.
Investors are also anticipating the end of the summer driving season, which exhibited strong consumer demand for gasoline and low inventories. “That may change in the next few weeks, which makes the picture slightly more bearish than it has been,” said Emily Ashford, director of energy research at Standard Chartered. Prices had settled higher on Friday, amid a solid U.S. employment report and the Baker Hughes’ weekly rig count showing a net decline in the past week of one in active U.S. oil-drilling rigs.
One major development the market will be watching for from the OPEC meeting is whether Libya will join the agreement to cap production. The African supplier, along with Nigeria, were exempted from the initial deal because their output were marred by monthslong militant attacks. However, as both nations are now pumping closer to their peak levels, there is a growing belief that they should also abide by production caps. Production at Libya’slargest oil field resumed on Monday after a brief disruption. According to S&P Global Platts, the combined July output of both African producers was 590,000 barrels above October’s, a baseline that deal participants used to determine their production caps. The OPEC’s own official monthly report will be published on Thursday. There is a “mix of optimism, and perhaps sustained hope, that more compliance can be achieved” at the OPEC meeting, said Barnabas Gan, an economist at the Singapore-based OCBC. Investors would also like to see assurances from UAE that they will curtail production as they had been producing above the levels they had pledged, according to Zahir.
Have a great day,
Loren R. Bailey, President
Fuel Manager Services Inc
“Serving the Trucking Industry Since 1992”