Fueling Strategy: Please fill as needed tonight, Tuesday please keep tanks topped – Be Safe!
NYMEX Crude $ 46.68 UP $2.0000
NY Harbor ULSD $1.5140 UP $0.0233
NYMEX Gasoline $1.4031 UP $0.0469
NEWS
Oil futures ended higher on Monday, recouping nearly all of what they lost in the previous session as traders bet on further declines in global crude production.
The market has grown concerned that low oil prices have begun to fuel a significant draw down in U.S. production. Adding to those expectations, a report published by Wood Mackenzie on Monday said oil and natural-gas projects worth around $1.5 trillion are at risk because of the slump in oil prices, which have dropped by more than 50% since last summer. West Texas Intermediate crude for October delivery settled at $46.68 a barrel on the New York Mercantile Exchange, up $2, or 4.5%. November Brent crude on London’s ICE Futures exchange rose $1.45, or 3.1%, to $48.92 a barrel. WTI—the U.S. benchmark for crude—outperformed Brent crude Monday, ahead of WTI’s October contract expiration on Tuesday. “Relative out performance from the U.S.-based benchmark is being sponsored by fears of falling production and debt-laden oil companies,” said Matt Smith, a commodity analyst at Clipper Data. “The risk of the supply side coming under further pressure in the coming months from lesser investment and adverse financials are egging WTI,” he said. “All the while, global markets remain focused on an ongoing supply glut as we head into the fall [refinery] maintenance season.”
West Texas Intermediate crude prices had dropped 4.7% on Friday, the biggest one-day drop in nearly three weeks, as the Federal Reserve’s decision last week to leave interest rates unchanged raised concerns about global growth and energy demand. Last week, however, the U.S. Energy Information Administration reported a weekly decline in crude supplies along with a fall in domestic oil production, and a Baker Hughes report showed the U.S. oil-rig count fell for a third straight week. “While many [traders] are still focused on an oil glut, we may start to see that go away as production in the U.S. and some other producers are falling and [the Organization of the Petroleum Exporting Countries] is near capacity,” said Phil Flynn, senior market analyst at Price Futures Group, in a note.
According to Richard Hastings, macro strategist at Global Hunter Securities, production may decline even more than is understood because the U.S. has a ban on oil exports. “There is nothing holding it [output] in place,” he said. WTI oil held near the session’s highs, even though the U.S. stock market gave up much of its earlier advance by the time prices settled.