Fueling Strategy: Please partial fill only tonight, Thursday AM wholesale prices will drop another 1.5 cents – Be Safe

NYMEX Crude $ 42.53 DN $.9800
NY Harbor ULSD $1.3648 DN $.0301
NYMEX Gasoline $1.4135 DN $.0135

NEWS
Oil prices fell to their lowest finish in more than 10 months after U.S. government data revealed a rise in domestic crude production, intensifying concerns over the glut of global supplies even as domestic stockpiles fell for a second straight week. “The energy complex has been trading with a very heavy tone this week as focus remains on global oversupply and rising U.S. production that is pushing the oil market further into surplus territory,” Tyler Richey, co-editor of the Sevens Report, told MarketWatch.

August West Texas Intermediate crude shed 98 cents, or 2.3%, to settle at $42.53 a barrel on the New York Mercantile Exchange, with prices at their lowest finish since Aug. 10, according to FactSet data. It was trading around $43.77 before the supply data and had briefly climbed above $44 following them. WTI’s loss on Tuesday sent the commodity down by at least 20% from 2017’s highest finish, logged in February. A 20% decline in value for an asset is typically considered a bear market. Meanwhile, Brent futures for August lost $1.20, or 2.6%, to $44.82 a barrel on ICE Futures Europe.

“The biggest headwind for the market remains the steady trend of rising U.S. oil output as it is offsetting the efforts of global production-cut agreement, and at the same time damaging morale among [the Organization of the Petroleum Exporting Countries] producers who are actively forfeiting market share to the U.S.,” said Richey. “As prices decline and U.S. output continues to trend higher, the odds of OPEC and Non-OPEC nations cheating on their production quotas increases.”

Early Wednesday, the U.S. Energy Information Administration showed that domestic crude supplies fell by 2.5 million barrels for the week ended June 16. Analysts surveyed by S&P Global Platts expected a decline of 2 million barrels, while the American Petroleum Institute late Tuesday reported a fall of 2.7 million barrels, according to sources. The EIA report, however, also showed that weekly domestic production climbed by 20,000 barrels to 9.35 million barrels a day. Gasoline stockpiles fell by 600,000 barrels in the latest week, while distillate stockpiles rose by 1.1 million barrels last week, according to the EIA.

On Nymex, July gasoline shed 1.4 cents, or 1%, to $1.411 a gallon,while July heating oil ended at $1.365 a gallon, down 3 cents, or 2.2%.

Before the supply data, oil prices had been trading moderately higher following a Reuters report that Iran’s oil minister said OPEC members were considering further production cuts. Prices didn’t move after Saudi Arabia’s state news energy said King Salman hasnamed his son as crown prince, replacing Muhammad bin Nayef. Mohammed bin Salman had been deputy crown prince. Rising production from the U.S., Libya, and Nigeria, as well as stubbornly high stockpiles world-wide, are undermining views that the continuing production cuts led by OPEC and Russia will lift prices. In its latest monetary-policy report, the Bank of Russia said output growth in those three countries, in part, could result in prices hitting $25 a barrel by mid-2018.

Elsewhere in the energy complex Wednesday, prices for natural gas moved lower ahead of a weekly U.S. supply update due Thursday, and as traders watched for any disruptions to energy production in the Gulf of Mexico from tropical storm Cindy. The storm prompted the shut in of 17.2% of oil production and 0.3% of natural-gas output in the Gulf Wednesday, according to the U.S. Bureau of Safety and Environmental Enforcement.

Have a great day,

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