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

NYMEX Crude $ 46.46 UP $.3800
NY Harbor ULSD $1.4477 UP $.0223
NYMEX Gasoline $1.4995 UP $.0115

NEWS
Oil prices tallied a gain for a third-straight session Tuesday, ahead of a weekly U.S. government data that are expected to reveal a decline in crude supplies. Daily gains have been modest, however, as investors remain skeptical that production cuts led by Middle Eastern producers and Russia are helping to alleviate a yearslong market glut.

On the New York Mercantile Exchange, July West Texas Intermediate crude rose 38 cents, or 0.8%, to settle at $46.46 a barrel after tapping a low of $45.56. August Brent crude on London’s ICE Futures exchange added 43 cents, or 0.9%, to $48.72 a barrel.

Following the late May decision led by the Organization of the Petroleum Exporting Countries to extend the output-cut agreement into the first quarter of 2018, the “focus now shifts to how U.S. crude and shale producers respond to higher prices,” said Mihir Kapadia, chief executive offer and founder of Sun Global Investments, in emailed commentary. U.S. production “has been one of the biggest headaches for OPEC as they [have] been flexible in increasing output in response to higher prices,” he said. “Thus OPEC’s desire for higher prices over the medium term have been continually thwarted.”

The Energy Information Administration said Monday that domestic shale-oil output is expected to rise by 127,000 barrels a day in July, from a month earlier. Petroleum supply updates are due out from the American Petroleum Institute late Tuesday and EIA early Wednesday. The EIA last week reported a surprise rise in weekly crude stockpiles, the first in nine weeks. “Last week’s counter-seasonal storage builds [for crude and crude products in the EIA report] triggered a steep mid-week sell off,” said Robbie Fraser, commodity analyst at Schneider Electric. “This week, initial expectations see crude and product stocks drawing down in line with seasonal trends, once again setting up the possibility of a surprise build to pull prices lower.” Citi Futures expects the EIA report to show a decline of between 2 million and 3 million barrels in crude inventories. It forecast a fall of 500,000 barrels to 1.5 million barrels for gasoline and a climb of 500,000 barrels to 1.5 million barrels for distillates.

On Nymex Tuesday, July gasoline rose 1.2 cents, or 0.8%, to $1.500 a gallon, while July heating oil added 2.2 cents, or 1.6%, to $1.448 a gallon. July natural gas ended at $2.966 per million British thermal units, down 5.8 cents, or 1.9%. That was the lowest finish since mid March.

According to a monthly report Tuesday from the Organization of the Petroleum Exporting Countries, the group’s crude production rose in May, even as OPEC, along with some nonmembers, late last month agreed to extend output cuts through March of next year. OPEC member output grew by 1% to more than 32.14 million barrels in May, with the rise attributed to increases from Libya, Nigeria and Iraq, according to the OPEC report. Production from Saudi Arabia, meanwhile, edged up to 9.94 million barrels a day in May from 9.938 million barrels a day a month earlier, according to OPEC. Still, Saudi Arabia plans to slash its U.S. oil exports to a near three-decade low for this time of year, with state-owned Saudi Arabia Oil Co. expecting its sales to the U.S. to drop below one million barrels a day in June, according to The Wall Street Journal, which cited people familiar with the matter.

The International Energy Agency’s monthly oil report, which includes figures on global oil production, will be released Wednesday.

Have a great day,

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