Fueling Strategy: Please fill as needed tonight – Be Safe

NYMEX Crude $ 46.14 DN $.4500
NY Harbor ULSD $1.5069 DN $.0098
NYMEX Gasoline $1.3753 UP $.0037

NEWS
Crude-oil futures ended lower on Monday, after lackluster data on Chinese factory activity stirred demand fears, while a jump in Russian oil production underlined concerns about a global supply glut.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in December fell 45 cents, or 1%, to finish at $46.14 a barrel. December Brent crude on London’s ICE Futures exchange fell 77 cents, or 1.6%, to end at $48.79 a barrel. Earlier Monday, the Calixin China manufacturing purchasing managers index, a gauge of nationwide manufacturing activity, rose to 48.3 in October from 47.2 in September. The reading suggests the shrinkage in factory activity may be slowing, although it marked the eighth straight month of contraction. The official gauge of China’s factory activity, released Sunday, was unchanged at 49.8 in October. A reading above 50 indicates expansion in activity while one below that mark signals contraction. “This suggests that China’s traditional sector of heavy industry and production will continue to contract for a while, which leads to less demand for oil,” said Vyanne Lai, an energy analyst at that National Australia Bank. China’s declining consumption of oil has been a major worry for the global energy sector. Plagued by oversupply and softening demand, oil prices have nearly halved from the same period a year earlier. With the expected resumption of Iranian oil exports in the coming months, analysts and industry leaders are bracing for a “lower for longer” scenario.

Even the news of a lower oil rig count in the U.S. last week—a decline of 16 to 578—failed to sustain the rally from last week. Oil futures were also pressured after Russia said October oil production hit a post-Soviet high of 10.8 million barrels a day. The U.S. jobs report on Friday is this week’s main economic event. But oil futures may take bigger cues from weekly crude-oil inventory data from the U.S. Energy Information Administration on Wednesday, analysts said. “We expect some further consolidation in the market, as the weaker [dollar] and recent investment cutbacks from major energy companies could somewhat overshadow supply glut concerns,” said Myrto Sokou, senior analyst at Sucden Financial, in a note.

Sokou expects Brent futures to consolidate around $48 to $50 a barrel, with support seen near the October low at $46.4. Nymex crude could hover around the $44-to-$47-a-barrel range this week, while further declines could retest the October low at $42.60 per barrel, the analyst said.