Fueling Strategy: Please fill as needed tonight – Be Safe Tonight!

NYMEX Crude $ 48.07 UP $.5900
NY Harbor ULSD $1.7427 DN $.0230
NYMEX Gasoline $1.6345 DN $.0131

NEWS
Oil prices finished higher Monday as investors assessed the impact of Hurricane Irma on energy demand in Florida and Hurricane Harvey’s extent of damage to oil refineries on the Gulf Coast.

October West Texas Intermediate crude tacked on 59 cents, or 1.2%, to settle at $48.07 a barrel on the New York Mercantile Exchange after tapping a low at $47. Global benchmark November Brent crude inched up by 6 cents, or 0.1%, to finish at $53.84 a barrel on the ICE Futures Europe exchange.

Harry Tchilinguirian, global head of commodity markets at BNP Paribas, said the market was still determining the extent of the damage of Hurricane Harvey on oil refineries, while anticipating the effect of Hurricane Irma, which made landfall in the U.S. over the weekend. In a “dramatic situation” like a hurricane, there is going to be “a lot of volatility in the numbers,” he said. In a note Monday, however, analysts at Goldman Sachs said the negative impact on oil demand from Irma will be smaller than Harvey, which made landfall on the Texas coast on Aug. 25. That is “because Texas has twice the oil consumption per capita of Florida given the significant concentration of refining and petrochemical capacity on the U.S. Gulf Coast,” they said. “Harvey, as a result, had a significant negative impact on refineries and ethylene crackers utilization and their crude and [natural-gas liquids] feedstock demand,” the analysts said.

WTI crude declined by roughly 3% on Friday, further widening the spread with Brent to over $6. The differential “can be explained in part by lower demand for U.S. crude oil in the next few weeks, as some refineries on the [Gulf Coast] will remain closed…while demand is also likely to suffer as a result of the devastation caused by Hurricane Irma in Florida,” according to analysts at Commerzbank. Brent had risen to a five-month high last week before giving up some of those gains by the end of the day Friday. Analysts widely expect the price gap between Brent and WTI to narrow in the coming days and weeks.
Meanwhile, Saudi Arabia—the world’s largest exporter of crude oil—said Sunday that the country’s energy minister and his Venezuelan counterpart had discussed the possibility of extending OPEC’s oil output cut deal beyond the March 2018 expiration date. Analysts at consultancy JBC Energy said those talks should prove supportive for crude prices. The Organization of the Petroleum Exporting Countries, of which Saudi Arabia is the largest member, and other producers including Russia first agreed late last year to cap their production at around 1.8 million barrels a day lower than October 2016 levels. The goal of the deal, which was extended in May, was to drain a global oversupply that has kept prices depressed amid a resurgence in U.S. shale production.

Investors and analysts were also looking ahead to monthly reports from OPEC and the International Energy Agency due on Tuesday and Wednesday, respectively, for the latest OPEC production data and global demand forecasts. The U.S. Energy Information Administration will also release its monthly short-term energy outlook report Tuesday.

Have a great day,

Loren R. Bailey, President
Fuel Manager Services Inc
“Serving the Trucking Industry Since 1992”
www.FuelManagerServices.com
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Office: 479-846-2761