Fueling Strategy: Please have tanks topped out before 23:00 CST tonight, Saturday AM wholesale prices will go UP another 2.5 cents then look for a fallback of 5 cents Sunday AM – Be Safe Today!

NYMEX Crude $ 44.48 DN $1.8400
NY Harbor ULSD $1.4073 DN $0.0469
NYMEX Gasoline $1.3769 DN $0.0249

NEWS
Oil futures on Friday suffered from their worst one-day loss since mid-July, paring a weekly gain, after a Saudi Arabian delegate reportedly said oil producers aren’t likely to make a decision on production levels at a meeting next week.

Instead, the meeting planned for the last day of the International Energy Forum, which will be held in Algeria Monday through Wednesday, will only offer a chance for the Organization of the Petroleum Exporting Countries and other oil producers to consult with each other about production levels, Bloomberg reported Friday. The Wall Street Journal, citing Saudi and Iranian sources, said both countries see an agreement as unlikely. The news follows a report from Reuters which said Saudi Arabia offered earlier this month to scale back production to levels seen earlier this year, if rival Iran agrees to freezing production at the current level of 3.6 million barrels a day. Tehran is weighing the offer, according to Reuters.

Prices also saw pressure after the Federal Reserve proposed restrictions on commodity trading among banks. November West Texas Intermediate crude dropped $1.84, or about 4%, to settle at $44.48 a barrel on the New York Mercantile Exchange. That was the sharpest one-day dollar and percentage loss since July 13, FactSet data show. WTI oil had traded higher for four days in a row and managed to book a weekly gain of 2%. Global benchmark Brent crude for November delivery lost $1.76, or 3.7%, to $45.89 a barrel, with the contract holding on to a weekly gain of about 0.3%, according to data from Dow Jones.

“Hopes were high for a deal when the Saudis offered to cut production, but the details about how compliance would be monitored is making it harder to close the deal by next week,” Phil Flynn, senior market analyst at Price Futures Group told MarketWatch. “But we are still going to see negotiations going back and forth all weekend, so a deal could still happen—though it is looking less likely at the moment.” Earlier, The Wall Street Journal reported that midlevel officials from Saudi Arabia and Iran clashed this week over production limits as they gathered with officials from Qatar and Algeria at OPEC’s headquarters in Vienna ahead of next week’s summit. Saudi Arabia and Iran failed to reach an agreement on how to calculate oil output levels for a potential production limit, WSJ reported.

Still, the difference this time around, compared with talks of a production freeze last spring, is that “the Saudis are offering a cut rather than just a freeze,” said James Williams, energy economist at WTRG Economics. Still, “they are also requiring that Iran back off their goal of 4 million [barrels a day] and stay at [roughly] 3.6 million,” he said. Contributing to oil’s decline Friday is the Fed’s proposal to restrict bank’s activity in physical commodity markets such as oil. “Goldman Sachs and J.P. Morgan, in the past, were big players in oil and the perception is that oil will have lost a big customer,” said Flynn. “Short term, the market is saying its bearish but longer term the impact will be negligible,” he said.

Overall, there has been a raft of rhetoric from OPEC producers that a deal to cap production could be reached at the meeting, but traders are wary. “Oversupply is running at about 1.6 million barrels per day at the moment and any deal will probably aim to stop that situation from getting any worse,” said Robert Minter, investment strategist at Aberdeen Asset Management. “That would keep prices at around $40-50 per barrel.” “But narrow interests and nationalism often trumps rationality at OPEC, so a deal could well not happen,” he said. “If nothing gets done, then we could see prices go down to $30.”

Over in the U.S. Friday, data from Baker Hughes revealed that the number of active domestic rigs drilling for oil, a proxy for oil activity, climbed by 2 to 418 rigs this week. They have now posted increases in 12 out of the last 13 weeks.