Fueling Strategy: Please fill as needed tonight – Be Safe!!
NYMEX Crude $ 48.08 DN $.3300
NY Harbor ULSD $1.4775 DN $.0125
NYMEX Gasoline $1.6456 UP $.0100
NEWS
Oil futures settled at their lowest level in a week on Monday as concerns surrounding recent disruptions to crude production eased, renewing expectations that global supplies will continue to outpace demand. West Texas Intermediate crude for delivery in July declined by 33 cents, or 0.7%, to settle at $48.08 a barrel on the New York Mercantile Exchange. That was the lowest settlement for a front-month contract since May 16. July Brent crude on London’s ICE Futures exchange fell 37 cents, or 0.8%, to $48.35 a barrel.
Prices appear “overbought in the short term and the impact of temporary supply factors could end at any time,” said Fawad Razaqzada, technical analyst at Forex.com and City Index.
The wildfires in Canada appear to be under control now thanks to cooler temperatures and rainfall in recent days,” he said. “The evacuation orders have been lifted and oil workers can return.” But “It could still take a number of weeks to return crude outages of more than 1 million [barrels per day] back to normal levels, meaning the supply deficit from Canada will likely be in place for a while yet,” said Razaqzada.
Supply outages in North America and Africa have been largely responsible for the recent rise in oil prices. WTI oil prices gained 3.3% last week, but finished Friday’s session lower as some supply disruptions subsided. Prices were also pressured after oil-field services firm Baker Hughes Inc.BHI, -0.97% reported Friday that the number of rigs drilling for oil in the U.S. was unchanged last week. Analysts said the uptrend in prices may entice some U.S. shale producers to start new projects.
Meanwhile, U.S. economic data have been pointing to the possibility of an interest-rate increase by the Federal Reserve at the central bank’s June meeting. “This has led to a recent rally in the U.S. dollar and [caused] commodities to turn lower,” said Troy Vincent, oil analyst at ClipperData. A strong dollar tends to weigh on dollar-denominated oil prices. Traders are also looking ahead to a meeting of the Organization of the Petroleum Exporting Countries, set for June 2 in Vienna. Current expectations are very low for any change in policy or production, said Stuart Ive, a client manager at OM Financial.
In other news, Iran recently reiterated that it has no plan to join any production freeze at the upcoming OPEC meeting. Russian energy minister Alexander Novak was also reported to have said he expects global supply to outpace demand by some 1.5 million barrels a day, with a forecast of an average oil price in 2016 at $40-$50 a barrel.