Fueling Strategy: Please fill as needed today/tonight, Friday AM wholesale prices will not change, Be Safe Today!!

NYMEX Crude $ 48.90 DN $2.4600
NY Harbor ULSD $1.5509 DN $0.0554
NYMEX Gasoline $1.6093 DN $0.0433

NEWS
Oil prices suffered a drop of nearly 5% Thursday, marking their lowest finish in a more than a week, as traders showed disappointment with the Organization of the Petroleum Exporting Countries’ decision to extend production cuts by nine months. An extension was widely expected, but traders had started to speculate that the cartel would make deeper reductions to output or extend the out-limit deal by 12 months.

July West Texas Intermediate crude dropped $2.46, or 4.8%, to settle at $48.90 a barrel on the New York Mercantile Exchange. That was the lowest price a front-month contract since May 16 and largest percentage decline since May 4, according data from Dow Jones. July Brent crude the global benchmark, lost $2.50, or 4.6%, to $51.46 on the ICE Futures exchange in London. WTI oil finished below both its 50 and 200-day moving averages. Oil’s 50-day moving average is $49.59 a barrel, while its 200-day moving average is $49.55, according to FactSet data. Technical analysts use trading averages to help assess an asset’s short and long-term momentum

FactSet“The market is sending a signal that they were looking from more out of the [OPEC] meeting, maybe a 12 month extension,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago. At the conference, Saudi Arabia oil minister Khalid al-Falih said the oil market “is on its way to recovery” but “more time is needed” to bring oil supplies back to their five-year average. The extension of the supply pact “was signaled well in advance by the Saudi and Russian oil ministers,” Bhushan Bahree, senior director at IHS Markit, said in a report from Vienna. The extension “reflects the alliance’s concern that a large inventory overhang continues to weigh on prices and is taking longer to whittle down than expected”—in part because of “fast-rising output, notably from shale developments in the United States,” said Bahree. More than 20 OPEC and non-OPEC countries in November last year agreed to collective cut production by 1.8 million barrels a day in an effort to reduce the global supply glut that kept a lid on prices.

The accord came into effect on Jan. 1, but didn’t immediately affect global oil inventories. However, the impact of the lower production has become more evident recently, with U.S. crude supplies, for example, falling for a seventh week in a row, according to data out Wednesday. The inventory draw down in the U.S. “may have helped convince some OPEC members that supply cuts have had a delayed impact and should be given more time to accomplish the goal of draining crude stocks to levels around the five-year average,” said Geoffrey Craig, oil futures editor at S&P Global Platts, in a note.

Have a great day,

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