Fueling Strategy: Please keep tanks topped tonight, Thursday AM wholesale prices will go UP 2 cents – Be Safe!

NYMEX Crude $ 35.52 DN $1.8300
NY Harbor ULSD $1.1122 DN $0.0345
NYMEX Gasoline $1.2328 DN $0.0116

NEWS
The U.S. government reported a surprise jump in last week’s domestic crude supplies and the Federal Reserve announced its first interest-rate hike in more than a decade, sending oil prices back to levels not seen since early 2009.

January West Texas Intermediate crude dropped $1.83, or 4.9%, to settle at $35.52 a barrel on the New York Mercantile Exchange. The settlement was the lowest since February 2009.

On its expiration day, January Brent crude fell $1.26, or 3.3%, to end at $37.19 a barrel on London’s ICE Futures exchange.Fed policy makers announced Wednesday that they will lift the central bank’s benchmark short-term borrowing rate by a quarter-point to a range of 0.25% to 0.5%. It was the first increase since 2006. “Right after the Fed announcement, crude oil took a hit as the U.S. dollar got a strong bid” said Taki Tsaklanos, head of research at Secular Investor. An increase in interest rates can provide a lift to the U.S. dollar which in turn may put pressure on dollar-denominated commodity prices. But oil “traders quickly reversed their initial reaction, as soon they learned that the monetary policy of the Fed will remain accommodative,” he said. Prices had dipped to as low as $35.33 immediately after the Fed decision, which came shortly before oil’s settlement. They had fallen under $36 after the U.S. supply data were released early Wednesday.

The U.S. Energy Information Administration reported that crude supplies climbed by 4.8 million barrels for the week ended Dec. 11. The American Petroleum Institute on Tuesday reported a 2.3 million-barrel increase, according to sources, but analysts polled by Platts expected supplies to be down by 2.5 million barrels. The report “was bearish from the headline through the details,” said Tyler Richey, co-editor of The 7:00’s Report. Inventories at the U.S. storage hub of Cushing, Okla. also increased and production in the lower 48 states edged up despite the renewed price weakness we saw last week, he said. Gasoline supplies rose 1.7 million barrels, while distillate stockpiles added 2.6 million barrels last week, according to the EIA.

Meanwhile, the U.S. Congress has agreed to lift a 40-year ban on U.S. crude-oil exports as part of a deal on spending and tax legislation, though both the House and Senate still must pass it.