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

NYMEX Crude $ 44.04 UP $1.4000
NY Harbor ULSD $1.3325 UP $0.0422
NYMEX Gasoline $1.5660 UP $0.0529

NEWS
Oil futures on Tuesday continued to “defy gravity,” with prices settling at the highest level of the year for a front-month contract, buoyed by a weaker dollar despite some signs of rising global crude production.

“The ability of oil prices to dismiss bearish news as easily as they have strongly suggests that significantly higher, as opposed to significantly lower, levels can be reached in the coming weeks,” said Fawad Razaqzada, technical analyst at Forex.com and City Index.

In a note, he said oil continued to “defy gravity” and move higher, even though oil producers’ failed attempt earlier this month to agree on a production freeze was “’supposed’ to cause oil prices to collapse.

On the New York Mercantile Exchange, June West Texas Intermediate crude added $1.40, or 3.3%, to settle at $44.04 a barrel. That was the highest settlement of the year for a front-month contract, but the June contract itself has finished higher—at $44.18 on April 20, when the May contract went off the board.

Brent crude rose $1.26, or 2.8%, to $45.74 a barrel on London’s ICE Futures exchange. “Prices are trying to stabilize as traders and oil companies try to predict when oil production will find equilibrium with demand,” said Phil Flynn, senior market analyst at Price Futures Group. WTI prices fell 2.5% on Monday. That means week to date they’re trading roughly 0.6% higher.

“There is a wide degree of different thinking on this issue [of supply and demand balance], but I predict it will happen much sooner than people think,” Flynn said. “We’re faced with massive [capital expenditure] cuts and plunging rig counts, as well as the inability of oil projects around the world to find capital.”

Energy giant BP PLC reported a second consecutive quarterly loss, hurt by weak oil prices and a $917 million pretax charge relating to the Deepwater Horizon explosion in 2010.

For now, oil was propped up by the dollar, which fell after weak U.S. durable goods data and ahead of a monetary policy meeting of U.S. Federal Reserve officials on Wednesday.

The ICE U.S. Dollar Index declined 0.3% in Tuesday trading after data showed that March U.S. durable goods orders climbed less than expected. As oil is priced in dollars, it becomes cheaper for holders of other currencies as the greenback falls.

There are few signs that the fundamental picture on the market is improving, analysts say. “Even with reports that the Saudis will complete the expansion of its Shaybah oil field by the end of May, raising the Saudis’ production capacity to 12 million barrels a day, it is possibly going to be wiped out” by falling output from producers who are not members of the Organization of the Petroleum Exporting Countries, said Flynn, in a Tuesday note. And “with demand growth soaring, it may be only a matter of months before the oil market finds balance,” he said. Saudi Arabia also announced an economic reform plan Monday, with a goal to reduce its dependence on oil.

Investors have been focusing on data out of the U.S. as a bellwether for the global market balance. U.S. output has been slowly declining in recent months, and is set to fall further as low prices hit drilling activity. The American Petroleum Institute will release U.S. weekly petroleum supply data late Tuesday. The Energy Information Administration’s weekly report on inventories and production will be issued early Wednesday. Analysts polled by Platts forecast an increase of 800,000 barrels for crude stockpiles for the week ended April 22. They also expect declines of 1.3 million barrels for gasoline supplies and 600,000 barrels for distillates, which include heating oil.