Fueling Strategy: Please load up tonight due to wholesale prices are down 5 cents but will go back UP Thursday AM 2 cents then UP another 3.5 Friday AM – “Top All Tanks” – Be Safe

NYMEX Crude $ 48.41 UP $.5800
NY Harbor ULSD $1.6244 UP $.0332
NYMEX Gasoline $1.6189 UP $.0281

NEWS
An eighth consecutive weekly decline in U.S. crude supplies lifted oil prices Wednesday, but domestic production continued its climb to levels not seen since July 2015—setting a limit on crude’s price strength. October West Texas Intermediate crude tacked on 58 cents, or 1.2%, to settle at $48.41 a barrel on the New York Mercantile Exchange. October Brent crude rose 70 cents, or 1.4%, to $52.57 a barrel on the ICE Futures Europe exchange.

The gains came after the U.S. Energy Information Administration Wednesday reported that domestic crude supplies fell by 3.3 million barrels for the week ended Aug. 18, following declines in each of the last seven weeks. That’s just below the forecast for a decline of 3.7 million barrels by analysts surveyed by S&P Global Platts. The American Petroleum Institute had reported late Tuesday a fall of 3.6 million barrels, according to sources. “Although in line with consensus, oil inventories have fallen for an eighth consecutive week, now down 30 million barrels year on year, and down 70 million barrels from the peak in late March,” said Matt Smith, director of commodity research at ClipperData. “Refinery runs continue to be strong, up nearly 800,000 [barrels a day] year on year, while a larger draw would have been seen had it not been for strong waterborne imports.” The report also showed that total domestic crude production edged up last week by 26,000 barrels a day to 9.528 million barrels a day, holding at levels not seen since the week ended July 17, 2015.

Still, Tyler Richey, co-editor at the Sevens Report, pointed out that output from the lower 48 states rose by 12,000 barrels a day, compared with this year’s average rise of 26,000 barrels. “If this report marks the beginning of slower growth in U.S. oil production, that would be supportive of oil prices in the medium term as it would suggest that the largest headwind on the global energy market is beginning to ease,” he said. Gasoline stockpiles were down 1.2 million barrels for the week, while distillate stockpiles remained unchanged, according to the EIA. Analysts were looking for a fall of 1.3 million for gasoline stocks and a decline of 500,000 barrels for distillates, which include heating oil, according to the S&P Global Platts survey.

On Nymex, September gasoline added 2.8 cents, or 1.8%, to $1.619 a gallon, while September heating oil rose 3.3 cents, or 2.1%, to $1.624 a gallon, a day after both contracts settled at roughly the same price level. Natural gas for September ended at $2.928 per million British thermal units, down 1.1 cents, or 0.4%, ahead of the EIA’s weekly update on supplies of the fuel due Thursday. Energy traders also eyed developments tied to Tropical Depression Harvey and its potential to disrupt oil and gas activity in the Gulf of Mexico. The National Hurricane Center warned that the storm could become a hurricane on Friday.

Late Tuesday, Anadarko Petroleum Corp. said it was removing nonessential personnel from some facilities due to weather in the region, but had so far seen no impact on production. Among exchange-traded products, the United States Oil Fund rose 1.2% Wednesday.

Have a great day,

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