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Market Close: Dec 06 Down

Fueling Strategy: Please keep tanks topped today/tonight, Thursday AM wholesale prices will go back UP 2 cents – Be Safe
NYMEX Crude        $ 55.96  DN $1.6600
NY Harbor ULSD   $1.8613 DN $0.0526
NYMEX Gasoline   $1.6609 DN $0.0575
NEWS

Oil fell more than 2 percent on Wednesday after a sharp rise in U.S. inventories of refined fuel suggested demand may be flagging, while U.S. crude production hit another weekly record.

Government data showed that U.S. crude stocks fell 5.6 million barrels, more than expected, though that was partially the result of the closure of the Keystone pipeline after a leak in South Dakota in mid-November, which cut flows to Cushing, Oklahoma. That line reopened Tuesday.

However, gasoline stocks rose by 6.8 million barrels and distillate inventories were up 1.7 million barrels, both exceeding expectations in a Reuters poll. That hit prices of both crude and products in a market which is already heavily tilted bullish and thus potentially vulnerable to a selloff, analysts said. Gasoline stocks tend to build in December, but at 221 million barrels of inventory, stocks are slightly above the five-year average for this time of year. U.S. crude production rose to 9.7 million barrels per day, another weekly record, though short of all-time records reached in the 1970s. That increase may undermine efforts by global producers to cut supply.

Supply cuts by the Organization of the Petroleum Exporting Countries, Russia and other producers that were extended at a meeting last week for the whole of 2018 have helped lift Brent prices by more than 40 percent since June. Prices have slipped from November’s peak, which represented two-year highs. The sentiment-driven support to crude oil prices has somewhat dissipated as market participants look beyond last weeks OPEC meeting,” said Abhishek Kumar, senior energy analyst at Interfax Energys Global Gas Analytics in London.

Brent Crude futures were down $1.63, or 2.6 percent, at $61.22 a barrel by 2:35 p.m. EST, after reaching a session high of $62.93, while U.S. crude futures dropped $1.66, or 2.88 percent, to settle at $55.96.

Russian Oil Minister Alexander Novak said it was too early to talk about exiting the OPEC agreement, and that the process would be gradual. Analysts such as Goldman Sachs have said that the expected rise in demand in 2018 would mostly be offset by U.S. and Canadian supply growth. U.S. oil production has climbed by 15 percent since mid-2016 to 9.7 million bpd, close to levels of top producers Russia and Saudi Arabia. “With U.S. production, we’re still in the throes of seeing that go ever higher. There’s only going to be more production coming which is very problematic for OPEC non-OPEC deal adherence,” said John Kilduff, partner at Again Capital in New York.

Have a great day,
Loren R Bailey, President
Fuel Manager Services, Inc.
“Celebrating 25-years of Excellent Service”
Office: 479-846-2761
Cell: 479-790-5581
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.