Fueling Strategy: Partial fill only tonight, Wednesday AM look for a penny drop in wholesale markets – Be Safe Today

NYMEX Crude $ 49.17 DN $.2200
NY Harbor ULSD $1.6292 DN $.0106
NYMEX Gasoline $1.6208 DN $.0091

NEWS
Oil prices fell for a second straight session in volatile trade Tuesday as investor sought details from an OPEC meeting to discuss a deal to further cap crude oil production. The cautious mood overshadowed reports that Saudi Arabia is planning to scale back exports to Asia next month.

On the New York Mercantile Exchange, West Texas Intermediate futures slid 22 cents, or 0.5% to settle at $49.17 a barrel. Brent crude the global benchmark, reversed gains to finish 0.4% lower at $52.14 a barrel.

Saudi Arabia, the world’s largest crude oil producer, is expected to cut sales of oil supplies to Asia by up to 10% in September to tackle the global crude glut, according to multiple reports Tuesday. The Saudis “continue to do their best to support the market by cutting exports,” said Ole Hansen, head of commodity strategy at Saxo Bank. But investors remained skeptical over how effectively the Organization of the Petroleum Exporting Countries can enforce compliance, said Lukman Otunuga, a research analyst at FXTM, in a note. Saudi Arabia first announced late last month plans to limit oil exports to 6.6 million barrels a day in August. That declaration came as the OPEC — of which Saudi Arabia is the most important member — has struggled to reduce an oversupply of oil in the global market that has weighed on prices for three years. “The kingdom’s oil minister made it clear a few months ago that the OPEC heavyweight will do ‘whatever it takes’ to bring global stock levels lower,” experts at oil broker PVM Group said. “Words are now being followed by actions.” “This announcement is remarkable to the extent that domestic demand declines in September, meaning that more crude oil will be available for export if production remains unchanged,” they said.

Still, news of the Saudi cut, which coincided with a two-day OPEC meeting in Abu Dhabi to discuss compliance. didn’t have a lasting impact on a market plagued by underlying concerns over a global oil glut. OPEC and 10 producers outside the cartel — including Russia — agreed late last year to cap production at around 1.8 million barrels a day lower than peak October 2016 levels. The oil-market reaction has proved muted, in part due to rising U.S. production, though poor compliance by some participants in the OPEC output-cap agreement has also contributed. “The reality is OPEC has no way of enforcing the production caps,” said Gao Jian, an analyst at SCI International. “That has been the problem of the cartel for many years now.” Also expected to be high on the agenda is the possible inclusion of Libya in the output-cap effort. The North African supplier was given a pass when the deal was first forged last fall because production had been curtailed by militant attacks on oil facilities. But with daily output back to 1 million barrels, other OPEC members are lobbying for Libya to also bridle its production. Nigeria, another OPEC member originally exempt from the pact, recently agree to begin reining in output. “The bearish bias towards oil remains intact amid oversupply concerns and there is a risk of the OPEC deal falling apart before March 2018, if members do not see oil prices recover,” said Otunuga. Investors and analysts were also looking ahead to weekly U.S. inventory data Wednesday, as well as monthly oil reports from OPEC and the International Energy Agency later in the week.

Have a great day,

Loren R. Bailey, President
Fuel Manager Services Inc
“Serving the Trucking Industry Since 1992”