Fueling Strategy: Please fill as needed tonight, Be Safe Today!

NYMEX Crude $ 49.69 UP $1.0700
NY Harbor ULSD $1.5031 UP $0.0150
NYMEX Gasoline $1.5887 DN $0.0188

NEWS
Oil futures settled on Monday at their highest level since July, with ongoing supply disruptions in Canada and Nigeria helping prices more than erase last week’s losses. Prices had briefly pared gains during Monday’s session after a speech by U.S. Federal Reserve Chairwoman Janet Yellen didn’t rule out an interest-rate increase for the central bank’s meeting this month.

July West Texas Intermediate crude added $1.07, or 2.2%, to settle at $49.69 a barrel on the New York Mercantile Exchange. The settlement was the highest since July 21 of last year. August Brent crude tacked on 91 cents, or 1.8%, to $50.55 a barrel on London’s ICE Futures exchange. Prices for WTI oil lost about 1.4% last week as the Organization of the Petroleum Exporting Countries failed to put a cap on its members’ production and weak U.S. employment data released Friday dulled the outlook for energy demand.

But because of the jobs data, expectations for a Fed rate increase in June dropped, prompting a sharp decline in the U.S. dollar. A weaker dollar can provide support for dollar-denominated commodities such as oil. Comments by Yellen, speaking in Philadelphia Monday, however, put the timing of a rate increase back into question, prompting oil prices to move away, briefly, from the session’s highs.

“Like most traders, oil traders are trying to discern what is true and what is just Fedspeak or posturing,” said Troy Vincent, an oil analyst at ClipperData. “The market should have expected that Yellen would try to downplay Friday’s employment figures with a note of optimism, but the real question is what does that mean for the pace of rate hikes?” Colin Cieszynski, chief market strategist at CMC Markets, was a bit surprised that oil prices eased back shortly after Yellen spoke. “I thought her speech was very balanced,” he said. “She had every chance to hit the panic button and didn’t. I guess some people were hoping she would go dovish like [Fed Gov. Lael] Brainard did on Friday.” Brainard called for the central bank to wait for more data before lifting interest rates.

Putting some pressure on prices, a survey from Baker Hughes Inc. on Friday showed that active oil-rig count in the U.S. rose by nine last week, the first increase in 11 weeks. Analysts have voiced concerns that the recent rise in oil prices may spur an increase in crude output.

And as Iran continues to boost its exports, Saudi Arabia cut its oil prices to Europe. Still, oil supply in Nigeria continued to be affected by attacks from Nigerian militants, despite Exxon Mobil Corp. lifting a force majeure—a suspension of service due to events that it couldn’t control—at the Que Iboe crude-oil terminal last Friday. “Supply fears continue to swirl amid further threats of sabotage from the Niger Delta Avengers,” said Matt Smith, director of commodity research at ClipperData, referring to a militant group. He pointed out that the International Energy Agency estimates that production in the West African nation has dropped to average 1.6 million barrels a day in May.

Meanwhile, the widespread wildfires in Canada last month sidelined about 800,000 barrels to 1 million barrels a day of production, or roughly 40% of Alberta’s output, Edward Meir, an analyst at INTL FCStone, wrote in a note issued Sunday. Although the wildfires have subsided, “it will take oil companies weeks or months to get fully up and running.”