Fueling Strategy: Please keep tanks topped tonight, Friday AM wholesale prices will jump UP 2.5 cents – Be Safe Today!

NYMEX Crude $ 49.48 DN $.0800
NY Harbor ULSD $1.5013 DN $.0114
NYMEX Gasoline $1.6195 DN $.0221

NEWS
Oil futures traded above $50 a barrel on Thursday for the first time in more than six months, then lost their grip to finish the session slightly lower as traders weighed the impact of recent declines in global production on the glut of crude.

July West Texas Intermediate crude touched a high of $50.21 a barrel on the New York Mercantile Exchange, but pulled back to settle $49.48, down 8 cents, or 0.2% for the session. WTI oil hadn’t traded above $50 since July. Brent crude for July delivery fell 15 cents, or 0.3%, to $49.59 a barrel on London’s ICE Futures exchange after touching a high of $50.51. Brent hasn’t finished a session above $50 since November.

Despite the pullback, the move above $50 was seen as a key moment by many analysts. “It’s quite a big deal to see Brent and WTI trading back up at $50,” said Colin Cieszynski, chief market strategist at CMC Markets. “it shows just how far the market has come back in recent months, nearly doubling off their lows.” WTI futures fell below $27 in February, hitting lows last seen in 2003, but year to date, they’re up more than 30%.

But oil may struggle to advance much further in the short term, said Cieszynski. “Technical momentum indicators suggest the rally is getting tired and $50 represents a big psychological hurdle.” The oil price recovery has been founded on two notions: improving demand and falling U.S. production, he said. “At some point, however, oil may reach a point where U.S. shale producers stop cutting back and can afford to start putting shut-in production back on stream.” Tim Evans, energy futures specialist at Citi Futures and OTC Clearing, said that higher prices for oil may reduce any incentive on members of the Organization of the Petroleum Exporting Countries to trim their output at a June 2 meeting in Vienna. On the contrary, the rise in prices “encourages OPEC producers to pump away,” he said.

Thursday’s moves came after inventory data released by the U.S. Energy Information Administration on Wednesday showed a higher-than-expected 4.2 million barrel reduction in oil stocks. A weaker U.S. dollar also offered support to prices Thursday. As oil is priced in dollars, it becomes more attractive for holders of other currencies as the dollar falls.

WTI oil prices are poised to finish higher for the week and month, propped up by supply disruptions around the globe. Wildfires in Canada and unrest in a key oil-producing region of Nigeria have helped balance the oversupplied market and boosted prices. “We believe the market has returned to balance in May, with the fundamental correction accelerated by supply disruptions,” said Jason Gammel, oil analyst at Jefferies. “For the first time in two years we expect that there is more upside than downside in our flat oil price forecasts.”