Fueling Strategy: Please keep tanks topped tonight, Saturday AM wholesale prices will go up one penny – Be Safe Tonight!

NYMEX Crude $ 48.62 DN $.5500
NY Harbor ULSD $1.4881 DN $.0207
NYMEX Gasoline $1.6075 DN $.0271

NEWS
Oil futures on Friday settled at their lowest level in more than a week as an increase in the number of active U.S. oil rigs implied higher crude output and weak U.S. employment data raised concerns over the outlook for energy demand. Oil traders had already been showing disappointment after major crude producers failed to set a cap on output at a key meeting in Vienna on Thursday. Prices managed to get a brief boost early Friday as the U.S. dollar plunged on the back of much weaker-than-expected U.S. jobs data, but took a leg lower as the data suggested a lower demand outlook and a report showed additions to the active U.S. rig count.

July West Texas Intermediate crude fell 55 cents, or 1.1%, to settle at $48.62 a barrel on the New York Mercantile Exchange. For the week, prices lost about 1.4% following three straight weeks of sizable gains. August Brent crude fell 40 cents, or 0.8%, at $49.64 a barrel on the ICE Futures exchange in London, with the contract down about 0.6% for the week. WTI prices hit highs above $49 a barrel after data showing that the U.S. created just 38,000 new jobs in May sent the dollar sharply lower.

The data cut the chances of a Federal Reserve interest-rate hike in June, which put pressure on the greenback. That can offer support for dollar-denominated commodity prices. But “the prospect of a possible U.S. recession in the second half of 2016, following the new jobs report,” might dampen demand for oil, said Nico Pantelis, head of research at Secular Investor.

And Thursday’s decision by the Organization of the Petroleum Exporting Countries’ decision to not set a ceiling on its members’ production also kept pressure on oil prices. “The sharp pullback in the dollar was initially supportive of oil prices in the wake of the very under whelming jobs print … but then the broader ‘risk-off’ reaction across assets caused energy prices to reverse back negative with stocks,” said Tyler Richey, co-editor of The 7:00’s Report. “The energy space is choppy right now as the market digests a busy week of news and with fundamentals mixed.” said Richey, pointing out that while OPEC’s decision disappointed the market, the pace of U.S. production declines remains elevated.

The U.S. Energy Information Administration reported Thursday that domestic supplies of crude fell 1.4 million barrels for the week ended May 27. Total U.S. output also declined by 32,000 barrels a day. On Friday, however, Baker Hughes reported that the number of active U.S. rigs drilling for crude oil rose by 9 to 325, contributing to weaker sentiment. The total U.S. rig count, including gas rigs, climbed by 4 to 408. That was the first overall gain in the rig count since Aug. 21 of last year, according to James Williams, energy economist at WTRG Economics. “It’s encouraging, but the exploration business will still be in the ICU [intensive care unit] for the foreseeable future.” “While rig count is it is up, it remains too low to increase oil production—except possibly in the Permian [Basin] which has just about the number of rigs running to maintain current output,” he said. “The other major oil plays are well below the level that will increase production or stem the decline.”