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Market Close: Aug 24 Mixed

Fueling Strategy: Please keep tanks topped tonight, Thursday AM wholesale prices will go back up 1.5 cents – Be Safe Today!

NYMEX Crude $ 46.77 DN $1.3300
NY Harbor ULSD $1.4963 DN $0.0055
NYMEX Gasoline $1.5096 UP $0.0108

NEWS
Oil futures sank Wednesday to settle at a one-week low as U.S. government data confirmed a larger-than-expected weekly rise in crude inventories, wiping out earlier support from optimism that Iran could agree to a production freeze accord.

October West Texas Intermediate crude fell $1.33, or 2.8%, to settle at $46.77 a barrel on the New York Mercantile Exchange. That was the lowest settlement for a most-active contract since Aug. 17, according to FactSet data. Prices traded around $47.50 before supply data. October Brent on London’s ICE Futures exchange fell 91 cents, or 1.8%, to $49.05 a barrel—the lowest finish since Aug. 15.

The U.S. Energy Information Administration early Wednesday reported that domestic crude supplies rose by 2.5 million barrels in the week ended Aug. 19. That was significantly above the 200,000-barrel climb expected by analysts polled by S&P Global Platts, but lower than the rise of nearly 4.5 million barrels reported by the American Petroleum Institute late Tuesday. Although the crude stockpile increase wasn’t as bearish as the one reported by the API, “this was still a bearish outcome relative to expectations and versus the historical draws,” said Tim Evans, an energy analyst at Citi Futures. Total U.S. crude output, meanwhile, fell by 49,000 barrels a day to 8.548 million barrels a day for the latest week, the EIA said. Gasoline supplies were flat for the week, while distillate stockpiles edged up by 100,000 barrels, according to the EIA. “Unchanged gasoline stocks were also bearish, leaving a substantial 8.5% year-on-year inventory surplus in place with little time left in the driving season,” said Evans.

Oil prices had earlier found some support after a delegate from the Organization of the Petroleum Exporting Countries told The Wall Street Journal that Tehran had sent a letter to OPEC members that it would attend the informal meeting next September in Algeria. That could signal a reversal in Iran’s stance, as it had declined to attend the last informal meeting back in April where a plan to freeze production failed. “As in the past, little to no progress is expected to be made at the September OPEC meeting,” said John Macaluso, an analyst at Tyche Capital Advisors. “A ‘freeze’ would be difficult to uphold as penalties for overproducing would be difficult to uphold,” he said. “We firmly believe that the risk is to the downside as fundamentals remain bearish and lack of substance coming from possible production freezes will once again upset the market.”

Back in the spring, Saudi Arabia, OPEC’s biggest producer and de facto leader, withdrew from a pact to stabilize output after Iran refused to comply with any production caps. But this time around, with Iran’s present production level at around 3.6 million barrels a day, the market has higher hopes that Tehran would be more receptive to the pact this time around. “Now they have regained market share, it would benefit them to move the prices higher,” said Grace Liu, the head of research at Guotai Junan International, but added the long-term political rivalry between Saudi Arabia and Tehran remains a major road block for any agreement.

Categories: Fuel News
loren: Fuel Manager Services Inc. "Serving the trucking industry since 1992" I've been in and around the trucking industry for 45-years beginning in owner operator operations at Willis Shaw Express. I bought a small trucking company that I ran for 6-years then sold and went to work for J.B. Hunt Transport in 1982. After 10-years with Hunt, I started Fuel Manager Services, Inc., we are in our 29th year of serving the American trucking companies. Our simple goal was and is to bridge the gap between the trucking companies and the fuel suppliers.