Fueling Strategy: Please fill as needed today/tonight – Be Safe Today!

NYMEX Crude $ 49.01 DN $.0900
NY Harbor ULSD $1.4989 UP $.0018
NYMEX Gasoline $1.6153 UP $.0019

NEWS
Oil futures settled narrowly lower on Wednesday, recouping most of their earlier losses after news reports said that members of the Organization of the Petroleum Exporting Countries may consider placing a ceiling on crude production.

The news comes ahead of Thursday’s biannual OPEC meeting. The market also awaits weekly U.S. government data on petroleum supplies, also due Thursday. OPEC members meeting behind closed doors ahead of the official cartel meeting Thursday in Vienna have revived the idea of a collective crude production ceiling, according to a report from The Wall Street Journal. The group previously had a production ceiling of 30 million barrels a day, which it routinely overshot, but put an end to that limit back in December. Any move to cap production “would likely come with a significant asterisk,” Robbie Fraser, commodity analyst at Schneider Electric, told MarketWatch. The limit “would almost certainly be placed at a high enough level to avoid burdening any member countries.” So “a cap tomorrow would likely do little to impact current fundamentals, but could prove a nice head start on negotiations later this year,” he said.

But Tyler Richey, co-editor of The 7:00’s Report, said he’d “find it hard to believe that a ‘cap’ would be agreed upon because of the continuing disagreements within OPEC, specifically Iran remaining adamant about boosting production regardless of what the rest of the ‘cartel’ does.” Saudi Arabia, the group’s biggest producer, is considering backing the limit, the WSJ report said. Nigeria, Qatar, Algeria and Venezuela are also supportive of the idea, it said, citing a person involved in the talks. We’ll see a lot of rumors over the next 24 hours that could knock the market around, but moves won’t be technically significant unless oil breaks through $50.00 or $48.00,” Colin Cieszynski, chief market strategist at CMC Markets, said. Before the news, OPEC members had been expected to stand pat on their “no-cut” tactic at the official meeting. But some analysts have said that the group’s ability to control the oil markets has faded, particularly after OPEC decided against cutting production at its November 2014 meeting despite the growing global glut of crude supplies.

Meanwhile, the continued return of Canadian production following the Alberta wildfires is also weighing on prices, said Fraser. But as supply disruptions in Canada decline, “Nigeria and Venezuela will continue to keep production issues in the spotlight going forward.”

Weekly data on U.S. petroleum supplies will be released by the American Petroleum Institute late Wednesday, and by the Energy Information Administration early Thursday. Both are coming out a day late because Monday was a U.S. holiday. Analysts surveyed by S&P Global Platts forecast a 3.1-million barrel decrease in crude stocks for the week ended May 27. They also expect gasoline stockpiles to fall by 1.4 million barrels and distillate inventories, including heating oil, to decline by 400,000 barrels for the week.