Fueling Strategy: Please partial fill tonight, Wednesday AM wholesale prices will drop 5 cents – Be Safe Tonight!

NYMEX Crude $ 44.66 UP $1.2200
NY Harbor ULSD $1.3375 UP $0.0512
NYMEX Gasoline $1.4857 UP $0.0430

NEWS
Oil futures bounced back on Tuesday to recoup all of the losses suffered a day earlier, as supply outages from Canada to Nigeria helped to alleviate concerns over the global glut of crude.

On the New York Mercantile Exchange, June West Texas Intermediate crude tacked on $1.22, or 2.8%, to settle at $44.66 a barrel. It lost about that same amount on Monday. July Brent crude rose $1.89, or 4.3%, to $45.52 a barrel on London’s ICE Futures exchange. “The market is dealing with a lot of moving parts here and traders are trying to weigh the near-term influences such as the fire in Canada and the uptick in political unrest in the Middle East against longer-term fundamentals like Saudi Arabia’s production plans and trends in U.S. output,” said Tyler Richey, co-editor of The 7:00’s Report.

In a monthly report issued Tuesday, the U.S. Energy Information Administration raised its 2017 forecast for WTI oil prices by nearly 25% to $50.65 a barrel, compared with its previous estimate. The EIA also lifted its estimate for U.S. crude-oil production to 8.19 million barrels a day for 2017, up from a prior estimate of 8.04 million, but left its estimate for 2016 at 8.6 million barrels a day. Output in 2017 is expected to be higher than previously forecast “in response to higher oil prices,” EIA Administrator Adam Sieminski said in a statement. But “higher oil demand in China and India will contribute to a drawdown in global oil inventories during the second half of 2017.”

Meanwhile, wildfires in Canada’s oil-rich Alberta province have knocked off some 1.6 million barrels a day, though fire officials said cooler temperatures have slowed the spread, according to consultancy Energy Aspects. “While wildfires in Alberta appear to have subsided enough to allow some Canadian production to restart, threats elsewhere in the world continue to limit the extent of the current oversupply,” said Robbie Fraser, commodity analyst at Schneider Electric.

In Nigeria, where production has already been affected by pipeline disruptions, “an escalation of hostilities in the Niger Delta has prompted Chevron and Royal Dutch Shell to evacuate nonessential personnel,” he said. Stronger demand for crude may also help to further ease the world’s supply surplus. On Tuesday, the chief executive of Saudi Aramco, Saudi Arabia’s giant state-owned oil company, said that he expects global oil demand to rise by 1.2 million barrels a day this year. Still, Kuwait is targeting an almost 50% increase in oil production over the next four years in a bid to secure future economic growth, a Kuwaiti oil official said Tuesday at the Platts Crude Oil Summit in London.

This week, the focus is turning to U.S. inventory and production data. Private data forecaster Genscape Inc. estimated Monday that inventories at the key U.S. delivery hub in Cushing, Okla., increased by 1.4 million barrels. The American Petroleum Institute will release its inventory estimate late Tuesday, followed by the official supply and output data by the EIA Wednesday. On average, analysts surveyed by S&P Global Platts forecast an increase of 300,000 barrels in crude-oil stocks. They also expect a fall of 800,000 barrels in gasoline inventories and a drop of 1.3 million barrels for distillates, which include heating oil.