Fueling Strategy: Please partial fill only today/tonight, Friday AM wholesale prices will drop 4 cents – Be Safe Today

NYMEX Crude $ 44.46 DN $.2700
NY Harbor ULSD $1.4146 UP $.0044
NYMEX Gasoline $1.4357 UP $.0030

NEWS
Oil settled with a modest loss Thursday, following sharp declines in the prior session, as data showing that the global market remains awash in surplus oil, rising U.S. crude production and weak domestic gasoline demand kept pressure on prices. Natural-gas futures, meanwhile, rallied to their highest finish of the month to date, with traders encouraged by a rise in weekly U.S. supplies of the fuel that came in below market expectations.

July West Texas Intermediate crude fell 27 cents, or 0.6%, to settle at $44.46 a barrel on the New York Mercantile Exchange after losing 3.7% a day earlier. For a second-straight session, it finished at its lowest level since Nov. 14, FactSet data show. August Brent crude on London’s ICE Futures exchange gave up 8 cents, or 0.2%, to $46.92 a barrel. Oil prices tanked by nearly 4% to their lowest level since November Wednesday, following U.S. Energy Information Administration data that showed the decrease in crude stockpiles last week was smaller than anticipated.

Compounding the woes was the unexpected increase in gasoline stocks, surprising many traders and analysts who expected much of the excess gasoline to be mopped up during the U.S. summer driving season. “The outlook for the energy market remains decidedly bearish,” said Tyler Richey, co-editor of the Sevens Report. OPEC’s agreement with non-OPEC members “remains in a fragile state as none of those participating are particularly happy about the arrangement, and their active forfeiture of market share to U.S. shale producers,” he said in his latest report. That raises the odds of ‘cheating’ or the deal crumbling all together.” In the U.S., the trend of rising production remains strong, gasoline demand has been “soft” so far, and “oil production is expected to continue to rise steadily this summer,” said Richey.

On Nymex, July gasoline and July heating oil each added less than half a cent, with gasoline ending at $1.436 a gallon and heating oil at $1.415 a gallon. Strength in the U.S. dollar, with the ICE U.S. Dollar Index up 0.5% on the back of the Federal Reserve’s hawkish stance Wednesday on future interest-rate hikes, also put pressure on dollar-denominated prices of oil.

Market sentiment Wednesday was already weak before the EIA readings, after boththe Organization of the Petroleum Exporting Countries and top energy watchdog International Energy Agency noted that the global supply growth rate continues to outpace demand. The IEA predicts non-OPEC production, mainly U.S. supplies, will grow by 1.5 million barrels a day in 2018. “To me, that’s the biggest alarm bell. There are no signs of shale producers holding back their production even though prices have been dropping,” said Phin Ziebell, an economist at National Australia Bank.

Have a great day,

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