Fueling Strategy: Please keep tanks topped tonight, Thursday AM wholesale prices will jump UP 2.5 cents, “Load Up” – Be Safe

NYMEX Crude $ 45.49 UP $.4500
NY Harbor ULSD $1.4737 DN $.0026
NYMEX Gasoline $1.5208 UP $.0025

NEWS
Oil prices settled higher Wednesday as U.S. government data confirmed a sharp decline in domestic crude supplies for a second week in a row. Prices, however, ended off the session’s best levels, as rising production in the U.S. and elsewhere continue to prevent the market from reaching a lasting balance between supply and demand.

August West Texas Intermediate crude climbed 45 cents, or 1%, to settle at $45.49 a barrel on the New York Mercantile Exchange. Prices pulled back from the $46.17 level they traded at before the data, but the settlement was still the highest since July 3, FactSet data show. September Brent crude on London’s ICE Futures exchange added 22 cents, 0.5%, to $47.74 a barrel.

On Wednesday, the U.S. Energy Information Administration reported that domestic crude supplies dropped 7.6 million barrels for the week ended July 7. That topped a forecast for a decline of 2.6 million barrels by analysts surveyed by S&P Global Platts, but came in a bit less than the decline of 8.1 barrels reported by theAmerican Petroleum Institute late Tuesday. Crude stockpiles had dropped by 6.3 million barrels in the prior week, according to the EIA. “Crude inventories have dropped below 500 million barrels for the first time since late January, and are just above year-ago levels, after the biggest draw since last September,” said Matt Smith, director of commodity research at ClipperData. The EIA pegged last week’s total crude stocks at 495.4 million. But total U.S. crude production edged up by 59,000 barrels a day to 9.397 million barrels a day last week, according to the EIA figures. “Resurgent net U.S. production levels, combined with mixed refined product inventory data,” wasn’t enough to extend the intraday rally, said Chris Kettenmann, chief energy strategist at Macro Risk Advisors.

Gasoline stockpiles fell by 1.6 million barrels, but distillate stockpiles climbed by 3.1 million barrels last week, according to the EIA.

On Nymex, August gasoline rose less than half a cent to $1.521 a gallon, while August heating oil shed half a penny to $1.474 a gallon. August natural gas also fell 6.2 cents, or 2%, to $2.985 per million British thermal units.

While gasoline stockpiles fell, “almost all of that move was in the Gulf Coast and not on the East Coast which…suggests demand is not as strong as you might think with a larger-than-expected gasoline draw this time of year,” said Tyler Richey, co-editor of the Sevens Report.

Still, oil prices managed to head higher for a third consecutive session, even as U.S. oil production has continued to increase. The EIA said Tuesday that annual U.S. production is on track to reach a record in 2018. A monthly report from the Organization of the Petroleum Exporting Countries released Wednesday showed that global oil supply rose by 660,000 barrels a day to average 96.59 million barrels a day in June, compared with a month earlier. Meanwhile, world oil demand for the year is expected to grow by 1.27 million barrels a day, with total consumption at around 96.4 million barrels a day, according to the report.

OPEC member crude production averaged 32.61 million barrels a day in June, up 393,000 barrels a day from May, with higher output from Libya, Nigeria, Angola, Iraq and Saudi Arabia. Nigeria and Libya are OPEC members that are exempt from the group’s production cut deal, but output by the two African nations has surged in the past three months. Representatives from the two countries have been invited to a meeting of OPEC and other major oil producers in Moscow on July 24 to discuss whether to include the countries in the curtailment plan, cartel delegates say. News reports on Wednesday, meanwhile, said there will be a special meeting of senior OPEC national representatives, known as governors, on Monday. The Wall Street Journal reported that people familiar with the matter said the rare gathering was for “administrative matters.”

Have a great day,

Loren R. Bailey, Founder & Owner
FUEL MANAGER SERVICES INC
“Serving the Trucking Industry Since 1992”