Fueling Strategy: Please partial fill tonight, Wednesday AM wholesale prices will drop 2 cents – Be Safe!

NYMEX Crude $ 37.35 UP $1.0400
NY Harbor ULSD $1.1467 UP $0.0190
NYMEX Gasoline $1.2444 DN $0.0114

NEWS
Oil futures topped $37 a barrel on Tuesday, as prices continued to rebound from a nearly seven-year low ahead of data that are expected to show a second straight weekly drop in U.S. crude inventories. Traders also pondered the impact of a potential lift to a 40-year-old ban on U.S. crude exports. Prices for natural gas, meanwhile, logged a fifth day of losses in a row, dragging prices down to their lowest levels since 1999, according to FactSet data.

Crude-oil futures for delivery in January settled at $37.35 a barrel, up $1.04, or 2.9%, on the New York Mercantile Exchange. January Brent crude , which expires on Wednesday, rose 53 cents, or 1.4%, to $38.45 a barrel on London’s ICE Futures exchange. Oil’s rebound is “a function of the record-short hedge funds covering ahead of what should be another drop in U.S. oil supply,” said Phil Flynn, senior market analyst at Price Futures Group. “Hedge funds are booking profits as they are starting to realize that this has become a crowded trade.”

Weekly U.S. crude inventories and production data are due from the Energy Information Administration on Wednesday. The American Petroleum Institute’s supply data will be released late Tuesday. Analysts surveyed by pricing agency Platts believe U.S. crude stocks will show a decline of 2.5 million barrels for the week ended Dec. 11. Citi Futures forecasts a draw of two to three million barrels for the same period. “WTI is close to its bottom, but it’s not done yet,” said Naeem Aslam, chief market analyst at AvaTrade. Prices could fall below $20 “if we run out of storage space and then have to use more floating super vessels to accommodate this,” he said.

Lifting the ban
Meanwhile, Congress is likely to lift its ban on oil exports as part of broader spending and tax legislation, The Wall Street Journal said in a recent article, citing congressional aides of both parties. Lifting the ban ultimately “will make the U.S. producers more competitive and OPEC sellers would have less success cutting prices to U.S. [oil] buyers [in order to] undercut U.S. shale when our oil exporters at that point could do the same to them,” said Phil Flynn, senior market analyst at Price Futures Group. In the short term, the move would have little impact on oil, though should bring the Brent/WTI price spread closer together, said Flynn. Robbie Fraser, a commodity analyst at Schneider Electric, pointed out inventory approaching storage capacity is becoming a global issue, so “for the time being there aren’t many attractive destinations for U.S. oil supply to go.”

Back on Nymex, January natural gas fell 7.2 cents, or 3.8%, to end at $1.822 per million British thermal units—the weakest level in more than 16 years. They settled Monday at their lowest in over 14 years.