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Market Close: July 31 Up

Fueling Strategy: Please keep tanks topped today/tonight, Thursday prices will jump UP 3.50 cents – Be Safe Today
NYMEX Crude    $ 58.58 UP $.5300
NYMEX ULSD     $1.9550 UP $.0110
NYMEX Gas       $1.9020 UP $.0051
NEWS
Oil prices rose for a fifth day on Wednesday following a larger-than-expected drop in U.S. inventories and after the Federal Reserve cut U.S. interest rates for the first time in more than a decade. The front-month Brent Crude futures contract, which expired Wednesday, rose 45 cents to settle at $65.17 a barrel. Brent posted a monthly decline of 2.1%. WTI Crude gained 53 cents to settle at $58.58 a barrel, and inched up 0.2% in July. U.S. crude stockpiles fell for a seventh straight week, slumping 8.5 million barrels last week, the Energy Information Administration said, far exceeding analysts’ expectations for a decrease of 2.6 million barrels. At 436.5 million barrels, U.S. crude inventories, not including strategic oil reserves, were at the five year average for this time of year, the EIA said. The draw down came even as offshore production restarted as the effects of Hurricane Barry waned, with output rebounding to 12.2 million barrels per day, near recent levels, from 11.3 million bpd a week earlier. Gasoline stocks fell 1.8 million barrels, while distillate stockpiles dipped by 894,000 barrels.

“These are bullish numbers across the board. The renewed large draw in crude oil is remarkable as U.S. oil production bounced back significantly after (Hurricane Barry),” said Carsten Fritsch, oil analyst at Commerzbank. In a separate report, the EIA said U.S. crude oil output in May slipped from a monthly record high, falling 26,000 bpd to 12.11 million bpd. After its two-day policy meeting, the U.S. Fed cut interest rates, citing concerns about the global economy and muted U.S. inflation. The central bank signaled a readiness to lower borrowing costs further if needed. The Fed said the rate cut should help return inflation to its 2% target but that uncertainties about that outlook remain.

Libya’s Sharara oilfield, the country’s largest, shut after a problem on Tuesday with a valve on the pipeline linking it to the Zawiya oil terminal. State-owned National Oil Corp (NOC) declared force majeure on loadings of the crude grade on Wednesday. OPEC oil output hit an eight-year low in July as a further voluntary cut by top exporter Saudi Arabia deepened losses caused by U.S. sanctions on Iran and outages elsewhere in the group, a Reuters survey found. Backwardation in Brent, a market structure in which later-dated contracts trade at lower levels than near-term contracts, has to a large extent evaporated, signaling a well-supplied market despite OPEC-led output cuts and U.S. sanctions on oil producers Iran and Venezuela. Meanwhile, U.S. and Chinese negotiators wrapped up a round of trade talks on Wednesday without visible signs of progress and put off their next meeting until September.

A Reuters monthly poll showed oil prices are expected to be range-bound near current levels this year as slowing economic growth and a protracted trade dispute curb demand.

Have a Great Day,
Loren R Bailey, President
Fuel Manager Services Inc.
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.