Fueling Strategy: Please partial fill only tonight, Saturday AM wholesale prices will drop 3 cents – Be Safe!

NYMEX Crude $ 43.73 UP $.5500
NY Harbor ULSD $1.3089 UP $.0099
NYMEX Gasoline $1.5309 UP $.0150

NEWS
Oil futures finished higher for a third straight week on Friday, supported by expectations that U.S. crude production will continue to decline. Analysts, however, cautioned against the sustainability of the recent price rally.

June West Texas Intermediate crude rose 55 cents, or 1.3%, to settle at $43.73 a barrel on the New York Mercantile Exchange. The June contract saw a weekly gain of roughly 4.8%, but based on the most-active contracts, prices rose about 8.3% for the week, according to FactSet data. The May contract expired Wednesday. June Brent crude climbed 58 cents, or 1.3%, to $45.11 a barrel on London’s ICE Futures exchange, with prices logging a weekly gain of 4.7%.

Weekly data released Friday from Baker Hughes Inc. showed that the number of active U.S. rigs drilling for crude, viewed as a rough proxy for activity in the industry, fell by 8 to 343, down a fifth straight week. “As oil prices continue to edge higher, rig counts should be given extra focus,” said Robbie Fraser, commodity analyst at Schneider Electric in Friday morning note. “If prices reach levels high enough to encourage a return of production, that fact can be reflected in the rig count report in as little as 1-2 months.” U.S. output has also continued to slowly decline, falling to 8.953 million barrels a day last week, according to Energy Information Administration data released Wednesday, down from a peak of 9.7 million last April.

Prices ended the week higher despite oil producers’ failed attempt to reach a deal to cap output last weekend, as a three-day strike slowed output from Kuwait and the market saw other production disruptions from Nigeria and Venezuela. Several members of the Organization of the Petroleum Exporting Countries “attempted to aid a continued move higher by stating that the production freeze will now be a key topic of discussion during the scheduled June meeting,” said Fraser. “However, the reality of OPEC’s political climate remains little changed—Iran will continue to increase production, and nothing will happen unless Saudi Arabia changes course.” So some analysts are skeptical about the sustainability of the price rally. “The oil market has not yet returned to a balance of supply and demand factors, leaving the market oversupplied for much of this year,” said Rob Haworth, senior investment strategist at the Private Client Reserve at U.S. Bank. Prices are also “nearing levels where some producers could afford to add to production, reversing the decline in production,” he said.