Fueling Strategy: Please keep tanks topped today/tonight, Friday AM wholesale prices will go UP 3.5 cents – Be Safe Today

NYMEX Crude $ 47.82 UP $.5000
NY Harbor ULSD $1.4899 UP $.0145
NYMEX Gasoline $1.5622 UP $.0226

NEWS
Oil prices on Thursday marked their second-highest settlement of the month with traders encouraged by a bigger-than-expected decline in weekly U.S. crude inventories.

However, concerns lingered that further gains in U.S. production will offset the effect of OPEC-led efforts to balance the market. Meanwhile, prices for natural-gas ended at their highest level since late January after the Energy Information Administration reported a smaller-than-expected weekly rise in domestic supplies of the commodity. June West Texas Intermediate crude climbed 50 cents, or 1.1%, to settle at $47.83 a barrel on the New York Mercantile Exchange. That was the highest finish since May 1, according to FactSet data. July Brent crude on London’s ICE Futures exchange picked up 55 cents, or 1.1%, to $50.77 a barrel.

Oil prices shot up more than 3% on Wednesday after data from the EIA showed U.S. crude stockpiles dropped 5.2 million barrels in the week ended May 5, far exceeding market expectations. The reading marks the biggest weekly draw down since December.

In a monthly report issued Thursday, however, the Organization of the Petroleum Exporting Countries raised its forecast for oil-production growth from countries outside of OPEC by more than 60%. “Even with the increased non-OPEC supply, the market will still shift to a [third-quarter] deficit as long as OPEC sticks with the current policy,” said Tim Evans, energy analyst at Citi Futures and OTC Clearing, in a note Thursday. He also pointed out that this is OPEC’s “final assessment” before the coming May 25 summit, during which its members are expected to make a decision on whether to extend their production-cut agreement. OPEC, as well as some non-OPEC countries such as Russia, have delivered on their pledges to cut their combined production by 1.8 million barrels a day, but oil prices so far this year have dropped by more than 10% as U.S. output continues to grow. “We expect the next two weeks to be traded on a lot of rhetoric and headlines ahead of the crucial production decision,” said John Macaluso, an analyst at Tyche Capital Advisors.

Bank of America Merrill Lynch on Thursday cut its forecast for Brent crude prices, noting that stocks are still too high and U.S. supply is set to recover faster than it had expected. It now expects the commodity to average $54 a barrel in 2017, and $56 a barrel in 2018. It previously expected prices of $61 in 2017 and $65 for 2018.

In a monthly report Tuesday, the EIA also reduced its 2017 Brent and West Texas Intermediate crude price outlook and raised its forecasts on U.S. production for this year and next.

Have a great day,

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