Fueling Strategy: Please fill as needed today, Tuesday partial fill only – Be Safe Tonight!

NYMEX Crude $ 40.06 DN $1.5400
NY Harbor ULSD $1.2579 DN $0.0496
NYMEX Gasoline $1.3036 DN $0.0158

NEWS
U.S. oil futures finished in bear-market territory Monday, settling sharply lower on fresh worries about a global glut of crude and gasoline as well as uncertainty over the near-term outlook for demand.

September futures West Texas Intermediate crude, the U.S. benchmark, fell $1.54, or 3.7%, to end at a three-month low of $40.06 a barrel and leaving the contract down 21.8% from a 52-week high of $51.23 hit in early June. A bear market is defined as a fall of 20% from a recent peak. WTI futures briefly traded below the psychologically important $40 a barrel level before trimming losses. The October Brent crude contract on London’s ICE Futures exchange lost $1.39, or 3.2%, to close at $42.14.

WTI futures have retreated sharply from their June peak “as traders shrug off expectations of increasing global fuel demands in the coming year and declining North American production levels, while they focus on near glut levels of supply and the end of unplanned supply disruptions (Nigeria, Libya and Canada) of the past couple of months,” wrote analysts at Tradition Energy, in a Monday note. Glut fears were amplified after Reuters on Friday reported that its monthly survey showed July oil output by the Organization of the Petroleum Exporting Countries was likely to hit its highest level in recent history.

Over the weekend, U.S. oil prices had clawed back some ground after the U.S. dollar sold off heavily. A weaker U.S. dollar often sends oil prices higher because it makes them cheaper for traders who use other currencies. The dollar turned higher against the yen Monday. Oil prices have undergone drastic swings in the first half of the year. Prices dropped to a 13-year low in February, but have since risen around 60%, though they remain sharply lower than two years ago, when prices hovered at around $100 a barrel. The continued glut of products in the market, both in crude and refined fuels, has kept the pressure on prices. The latest data by the International Energy Agency estimated that in the second quarter, the world’s supply of crude exceeded demand by 200,000 barrels a day.

In the near term, market participants will be watching the release of the monthly oil-market report by the Organization of the Petroleum Exporting Countries on Aug. 10. Despite some oil-supply disruptions around the world, OPEC production has risen, propelled by strong production in Iran, Iraq and Saudi Arabia. Exports from Libya, which was previously hindered by internal political strife, will likely resume soon after a deal was struck between the U.N.-backed government and an armed force. In a statement Sunday, the state-owned National Oil Co. said it “unconditionally” welcomed a deal between Libya’s unity government and the Petroleum Facilities Guard to reopen three eastern ports, after the militia had blocked them for 18 months, claiming they weren’t getting paid. In June, Libya’s daily production was estimated at 332,000 barrels a day, compared with 271,000 in May, but still lower in April.