Fueling Strategy: Please fill only tonight, Thursday AM wholesale prices will drop 2.5 cents – Be Safe Today

NYMEX Crude $ 32.28 UP $2.4000
NY Harbor ULSD $1.0855 UP $0.0677
NYMEX Gasoline $1.0137 UP $0.0129

NEWS
Oil futures rallied on Wednesday, spiking 8% in West Texas Intermediate prices amid a decline in the dollar and news that Russia has again raised the prospect of a meeting with the Organization of the Petroleum Exporting Countries. Earlier, oil had dipped in response to hefty climb in crude inventories—their fourth weekly increase in a row.

March WTI crude tacked on $2.40, or 8%, to settle at $32.28 a barrel on the New York Mercantile Exchange, recouping much of the more than 11% drop it suffered in the previous two sessions. Prices briefly took a turn lower to $29.78 after the supply data, then rebounded. Brent crude rose $2.32, or 7.1%, to $35.04 a barrel on London’s ICE Futures exchange. Builds in crude inventories this time of year are “historically common, but not this big,” said John Macaluso, an analyst at Tyche Capital Advisors.

The U.S. Energy Information Administration reported Wednesday that crude inventories rose by 7.8 million barrels for the week ended Jan. 29. The American Petroleum Institute on Tuesday reported a 3.8 million-barrel increase. Citi Futures forecast a rise of between 5 million and 6 million barrels, while analysts surveyed by The Wall Street Journal survey predict an increase of 3.5 million barrels. The weekly increase lifted total crude supplies to 502.7 million barrels. That is the highest weekly level on record, based on EIA data going back to the 1980s. “Inventories are at record highs with no significant talk of production cut,” said Macaluso. “Recently oil-dependent countries have been holding ‘conversations’ with themselves about production cuts to give prices a bid, and it has worked,” he said. “Rumors of production cuts stream through the media filling the market with premium.”

Russia on Wednesday reiterated its willingness to talk with OPEC producers on a plan to help boost prices, according to news reports. But “until a production cut does happen, fundamentals will continue to win the war while oversold technicals are winning the battles,” said Macaluso. “We stand pat on a lower for longer view [on oil prices], until fundamentals change.” Still, the EIA data did show that U.S. crude production edged down by 7,000 barrels a day to 9.214 million barrels a day. “The modest declines in U.S. oil production are not by themselves very bullish for the energy complex,” said Tyler Richey, co-editor of The 7:00’s Report. “However, the fact that production has slowed in 2016…is keeping the ‘glimmer of hope’ alive that output in the U.S. is finally rolling over.”

The EIA also said gasoline supplies rose by 5.9 million barrels, while distillate stockpiles fell by 800,000 barrels last week. Citi Futures was looking for a rise of 1 million to 2 million for gasoline, but a fall of those same amounts for distillates, which include heating oil.