Fueling Strategy: Please fill as needed tonight but plan on Thursday AM’s drop in wholesale prices of 2 cents – Be Safe Today!

NYMEX Crude $ 37.16 DN $.3500
NY Harbor ULSD $1.2389 DN $.0203
NYMEX Gasoline $1.2317 UP $.0281

NEWS
Pressure from a fall in heating-oil prices helped to undermine support from the first decline in U.S. crude supplies in 11 weeks, prompting oil prices to finish lower on Wednesday.

Prices for oil had climbed early Wednesday after U.S. government report showed a hefty drop in supplies. But traders have also been analyzing the latest data from the Energy Information Administration, which show that total crude inventories of 485.9 million barrels continue to sit at their highest level for this time of year in at least 80 years. “The trading market remains laser focused on every single source of bloat: production, inventory, and demand,” said Richard Hastings, macro strategist at Seaport Global Securities. “The big volume of [oil] imports and rising oil stocks at [the storage hub at Cushing, Okla.] especially seemed troublesome.” January West Texas Intermediate crude settled at $37.16 a barrel, down 35 cents, or 0.9%, on the New York Mercantile Exchange, after trading as high as $38.99 earlier. January Brent crude on London’s ICE Futures exchange fell 15 cents, or 0.4%, to $40.11 a barrel. Oil prices had declined over each of the last three trading sessions, following the Organization of the Petroleum Exporting Countries’ decision on Friday to keep producing oil at high levels in the face of a global supply glut.

On Wednesday, the U.S. Energy Information Administration reported that crude supplies dropped by 3.6 million barrels for the week ended Dec. 4. The American Petroleum Institute on Tuesday reported a 1.9 million-barrel decline, while analysts polled by Platts expected supplies to be down by 1.2 million barrels. But the EIA report also showed that distillate stockpiles, which include heating oil, jumped by 5 million barrels last week and gasoline supplies rose by 800,000 barrels. “The surge in distillate stocks reported in this morning’s EIA report, and subsequent…drop in heating-oil futures, undoubtedly added pressure to oil futures and helped turn prices back into negative territory for the session,” said Tyler Richey, co-editor of the 7:00’s Report.

The increases in petroleum-product stocks came as refinery utilization rose to 94.5% of capacity last week, from 93.1%, according to the EIA. “Imports were huge last week, pointing to the need to get some product off the ocean and into production and onshore storage,” said Hastings. The EIA said oil imports averaged over 8 million barrels a day last week, up 274,000 barrels a day from a week earlier. “But Gulf Coast refineries appeared to be cranking out a lot of product last week, helping to drive down Gulf Coast oil inventories,” Hastings said. “A bit of relief for the week, but pressure remains fully in place going forward.”

Still, the crude-supply drop is a “reflection of an improving supply/demand balance in the U.S.,” Colin Cieszynski, chief market strategist at CMC Markets, told Market Watch. “With no end in sight to the supply war, it may end up taking an increase in demand to shore up oil prices.”