Fueling Strategy: If possible, Do NOT fill tonight, Wednesday AM wholesale prices will drop 4.5 cents – Be Safe Today!
NYMEX Crude $ 45.23 UP $.8000
NY Harbor ULSD $1.4976 UP $.0204
NYMEX Gasoline $1.3632 UP $.0144
NEWS
Oil prices ended higher on Tuesday, finding support from expectations of a slowdown in U.S. oil production as traders awaited weekly updates on petroleum supplies. Crude production, however, has continued to flow from other major producers as they look to defend their market share, putting a cap on any price gains. “It seems as though oil speculators are almost convinced about an imminent drop in U.S. crude output, which should help to reduce the supply excess,” said Fawad Razaqzada, technical analyst at Forex.com.
But increased production from the Organization of the Petroleum Exporting Countries “may help to keep the global glut fully replenished which, together with growing concerns about an economic slowdown in China, are helping to prevent oil prices from rising,” he said. So prices, overall, have continued to “alternate between gains and losses.”
The November WTI contract fell 2.8% on Monday, following a 1.5% gain last week. “U.S. crude-oil production has begun to turn lower more sharply than we had expected, making it likely that non-OPEC production growth will turn from expansion to contraction in 2016 for the first time since 2008,” analysts at Deutsche Bank said in a report. “Even so, we estimate the oil market will remain oversupplied in 2016.” Market participants are focusing on U.S. oil production, whose relentless growth in recent years fueled the global oversupply. U.S. output peaked at 9.6 million barrels a day in April and has fallen to below 9.2 million barrels a day since.
Despite the U.S. slowdown, Deutsche Bank estimates that the market will remain oversupplied by about one million barrels a day in the first half of next year and then move into a deficit of 310,000 barrels a day in the second half of the year. Among those barrels will be an increase in Iranian output following the removal of the international sanctions against Tehran, the bank says. Weekly data on U.S. petroleum stockpiles are due out late Tuesday from the American Petroleum Institute. The Energy Information Administration’s report is due Wednesday. Analysts polled by Platts expect to see crude inventories unchanged for the week ended Sept. 25.
Aside from the supply data, traders will focus this week on the latest Chinese manufacturing PMI numbers on Thursday, said Razaqzada. “If the current trend of weaker economic data continues, oil prices may fall back on demand concerns.”