Fueling Strategy: Please partial fill tonight, Thursday AM wholesale prices will drop 2.5 cents – Be Safe!

NYMEX Crude $ 26.55 DN $1.9100
NY Harbor ULSD $ .8657 DN $0.0430
NYMEX Gasoline $1.0177 DN $0.0085

NEWS
Oil futures took a dive on Wednesday, as continued concerns about the glut of crude pushed the February West Texas Intermediate crude contract below $27 a barrel to its lowest settlement in nearly 13 years.

“Some walking wounded bottom pickers continue to try and catch a falling knife,” said John Macaluso, an analyst at Tyche Capital Advisors. “In market environments like this, the trend is your friend—and until there [are] any disruptions in supplies, we are looking at a lower oil for longer,” he said.

On the New York Mercantile Exchange, February WTI crude which expired at Wednesday’s settlement, fell $1.91, or 6.7%, to finish at $26.55 a barrel. That was the lowest settlement for a front-month contract since May 7, 2003, according to Dow Jones. March crude which is now the front-month contract, dropped $1.22, or 4.1%, to $28.35 a barrel. Brent crude for March delivery the global oil benchmark, ended down 88 cents, or 3.1%, to $27.88 a barrel on London’s ICE Futures exchange. Dow Jones data showed prices settled at their lowest since Nov. 24, 2003.

The International Energy Agency said in a report released Tuesday that the world may soon drown in oversupply. There is also “a record short position in hedge funds and we have the promise of more Iranian oil on the world market,” said Phil Flynn, senior market analyst at Price Futures Group. “Add it all up and it’s causing the crude-oil market to crater around the globe,” he said in a note Wednesday.

Fears about an economic slowdown in China, the world’s second-biggest economy, have rattled financial markets at the start of the year and added to the bearish sentiment in the oil market. Citi cut its oil-price forecasts on the back of concerns about the Chinese economy and sees both benchmarks averaging $34 a barrel this quarter and $31 in the next. Meanwhile, a selloff in global equities Wednesday also contributed to the bearish overall market sentiment. Hong Kong stocks hit a 3½-year low and Japan’s Nikkei closed in bear market territory, extending this year’s selloff in Asia. European stocks were also sharply lower and U.S. equities tumbled.

The oil market awaits weekly data on petroleum supplies, which have been delayed due to Monday’s holiday. The American Petroleum Institute will release its report late Wednesday, while the Energy Information Administration’s data will come out Thursday morning. In terms of prices, “look out below if we get a significant build from EIA tomorrow,” said Macaluso.

Analysts polled by Platts forecast an increase of 2.9 million barrels in crude-oil stockpiles for the week ended Jan. 15. They also expect to see an increase of 1.5 million barrels in gasoline inventories and a decline of 500,000 barrels for distillate stocks.