Fueling Strategy: Please don’t fuel until after midnight, Wednesday AM wholesale prices will drop 3 cents – Be Safe Tonight!

NYMEX Crude $ 43.20 DN $.7800
NY Harbor ULSD $1.4244 DN $.0015
NYMEX Gasoline $1.2872 DN $.0007

NEWS
Oil futures settled at a two-month low Tuesday after the U.S. government announced plans to sell millions of barrels of oil from its Strategic Petroleum Reserve, as traders bet on a further weekly increase in crude supplies. Natural-gas futures meanwhile, ended higher but not before briefly dipping below $2 per million British thermal units. They settled on Monday at their lowest levels in three years.

Plans for a sale of oil from the SPR were included in a government bill dated Monday. The sale would start in 2018 at an annual rate of five million barrels, rise to rise to eight million barrels in 2022 and then climb to 10 million by 2023 to total 58 million barrels by the end of the sale in 2025. It is “amazing that 10 years ago, we were worried that the SPR wasn’t big enough to deter [supply] threats,” said Phil Flynn, senior market analyst at Price Futures Group. The government had announced a “test draw down and sale” of five million barrels from the SPR in March 2014, but the last significant release was in 2011, when the U.S. sold off 30 million barrels to offset lost production from Libya. The SPR has capacity of 713.5 million barrels, but currently holds about 695 million. “The Saudis wont be happy with this” sale, said Flynn. “They may take it personal.”

WTI oil prices have dropped for two straight weeks, dragging the prices of other energy products with them. On Tuesday, Nymex November gasoline ended little changed at $1.288 a gallon, and November heating oil was also nearly flat at $1.426 a gallon.

Market participants will be closely watching weekly U.S. crude-oil inventories data from the American Petroleum Institute, due late Tuesday. The official government figures will be released on Wednesday. Traders will also be focusing on the Federal Reserve meeting, which ends Wednesday, for hints about the fate of interest rates.

“Not only is the market pricing in weak demand in the short term but in the long run as well,” Flynn said. “It looks like winter is canceled!”