Fueling Strategy: Please partial fill only today, Thursday AM wholesale prices will drop 2 cents – Please be safe today

PLEASE USE THE FOLLOWING NUMBER FOR THE FUEL HELP DESK: 479-846-2761

NYMEX Crude $ 49.18 DN $.7800
NY Harbor ULSD $1.5511 DN $.0120
NYMEX Gasoline $1.1831 DN $.0174

NEWS
Oil prices settled at their lowest level in about three weeks on Wednesday, pressured by growing doubts over the success of OPEC’s plan to curb production.

The pessimism outweighed earlier support U.S. government data showing a surprise weekly drawdown in crude stockpiles. “Oil prices shrugged off the minor, yet unexpected, draw to [U.S. crude] stocks,” as the market continued to “come to terms with the growing unlikelihood” of an agreement by the Organization of the Petroleum Exporting Countries to cut production a month from now, said Troy Vincent, an oil analyst at ClipperData. OPEC members are set to hold a formal meeting Nov. 30.

December West Texas Intermediate crude fell by 78 cents, or 1.6%, to settle at $49.18 a barrel. That marked the lowest finish since Oct. 4, according to FactSet data. Still, prices had been trading even lower, at $48.90, shortly before the supply report. December Brent crude on London’s ICE Futures exchange fell 81 cents, or 1.6%, to $49.98 a barrel, settling under $50 for the first time this month.

The U.S. Energy Information Administration early Wednesday reported that domestic crude supplies fell by 600,000 barrels in the week ended Oct. 21. Analysts polled by S&P Global Platts expected a 400,000-barrel climb, while the American Petroleum Institute late Tuesday reported a hefty rise of 4.8 million barrels. Matt Smith, director of commodity research at ClipperData, attributed the “minor crude draw” to “ongoing lower imports, in combination with a tick higher in refinery runs.”

Implied demand for both gasoline and distillates also saw a rebound after last week’s low level, while “increasing refinery runs as we exit maintenance season were not enough to replenish product stocks,” he said. Total petroleum products supplied over the last four-week period, which is a proxy for demand, was up 4.3% from the same period a year earlier, the EIA said. Crude imports inched up by 109,000 barrels a day from the previous week, while crude-oil refinery inputs climbed by 182,000 barrels a day from a week earlier. Gasoline supplies declined by 2 million barrels and distillate stockpiles dropped 3.4 million barrels, according to the EIA. The EIA report also showed a climb of 40,000 barrels a day in total domestic crude production to 8.504 million barrels a day.

James Williams, energy economist at WTRG Economics, viewed the rise in U.S. output as the “biggest negative” in the report. He pointed out, however, that the increase comes from output in Alaska and the Gulf, while production from onshore shale plays continues to decline.Natural gas mean while, extended its losses to a sixth straight session ahead of Thursday’s EIA data on supplies of the fuel. The November contract fell 4.3 cents, or 1.6%, to $2.731 per million British thermal units.

Overall, oil prices have been under pressure as disputes within OPEC appear to be escalating over the suggested pact to cap the group’s daily production to between 32.5 to 33 million barrels a day. In September, the group’s production reached 33.4 million barrels a day. “Rhetoric continues to ring out against the proposed production cut from OPEC,” said John Macaluso, an analyst at Tyche Capital Advisors. “Iraq has joined Iran, Nigeria and Libya opposing a production cut.” Iraq, the second largest OPEC producer, has said it needs the oil income to fund its continuing war against Islamic State.

“The only countries that can afford to cut production are Saudi Arabia and Russia but they would have the losing end of the deal if they are the only ones to cut,” said Jonathan Chan, a Phillip Futures energy analyst. Russia’s unclear stance is also fueling uncertainty. It had previously signaled its willingness to join an OPEC cut, but recent comments by its oil officials show the country is likely pivoting away. Russia’s OPEC envoy Vladimir Voronkov was quoted by a Russian media as saying that output cuts aren’t “an option for us.” Earlier this week, the head of Russia’s leading oil producer Rosneft also said the country still has spare capacity to raise production, if demand requires.