Fueling Strategy: Please partial fill only today/tonight, Saturday AM wholesale prices will go down 2.25 cents – Be Safe Today!

NYMEX Crude $ 48.82 UP $.2300
NY Harbor ULSD $1.6346 UP $.0033
NYMEX Gasoline $1.6130 UP $.0102

NEWS
Oil finished higher Friday, finding some support as data showed that the number of active U.S. oil rigs rose only slightly for the week, raising the likelihood that drilling activity has stabilized. Prices, however, still ended lower for the week after reports of a climb in July OPEC crude production, and as tensions tied to North Korea keep investors on edge. Natural gas, meanwhile, logged the biggest weekly price rally of the year, based on the most-active contracts, as a weather-related rise in demand caused U.S. supplies to climb less than the market expected last week.

September West Texas Intermediate crude tacked on 23 cents, or 0.5%, to settle at $48.82 a barrel on the New York Mercantile Exchange. It was modestly trading lower before the rig data. For the week, WTI saw a loss of roughly 1.5%, according to FactSet data. October Brent crude on London’s ICE Futures added 20 cents, or 0.7%, to $52.10 a barrel, with prices losing about 0.6% for the week.

The number of active U.S. rigs drilling for oil climbed by 3 to 768 rigs this week, according to data from Baker Hughes Friday. The modest rise follows a 1-rig tick lower a week earlier. The “oil rig count has stabilized and, at best, will have only modest increases for the rest of this year,” James Williams, energy economist at WTRG Economics, told MarketWatch. “That means slower growth in U.S. production.”

Oil’s latest move follows a selloff Thursday, when the monthly oil report from the Organization of the Petroleum Exporting Countries said the OPEC July production gained 0.5% from June to 32.9 million barrels a day. On Friday, a report from Paris-based International Energy Agency said crude output from OPEC climbed by 230,000 barrels a day in July to a new 2017 high of 32.84 million barrels a day. “The compliance rate with OPEC’s output cut fell again in July to a new low of 75% from June’s revised figure of 77%. For those non-OPEC countries acting in support, their compliance rate in July was 67%. Together, the twenty-two countries are producing about 470,000 barrels a day in excess of their commitment,” the IEA said in its report.

On a more upbeat note, the IEA lifted its demand growth forecast for 2017, saying it expects demand to increase by 1.5 million barrels a day, to 97.6 million barrels a day. “Concerns about elevated OPEC production and falling compliance to the global output cap deal that is currently scheduled to last through [the first quarter of 2018] is keeping WTI prices from breaking through the $50 [a barrel] mark near term,” said Tyler Richey, co-editor of the Sevens Report. “Longer term, the relentless trend of rising U.S. production continues to be a material headwind for the oil market, as this much output growth in 2017 was not expected,” he said in his latest report.

Aside from supply and demand, investors also closely followed developments in the U.S.-North Korea standoff. At the moment, the verbal jousting between the two nations hasn’t translated into any concrete actions, but the situation has intensified by the day.

Have a great day,

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