Fueling Strategy: Please fill as needed today/tonight, Friday AM wholesale prices will go up slightly – Be Safe Today

NYMEX Crude $ 45.52 DN $2.3000
NY Harbor ULSD $1.4123 DN $0.0613
NYMEX Gasoline $1.5812 DN $0.0526

NEWS
Oil prices dropped by almost 5% on Thursday, with expectations for a recovery in Libyan crude production and rising U.S. output sending prices back to levels they hadn’t seen since before the OPEC output cut deal in November. The possibility of power-sharing deal in Libya “adds to the potential for more supply,” said Phil Flynn, senior market analyst at Price Futures Group.

June West Texas Intermediate crude fell $2.30, or 4.8%, to settle at $45.52 a barrel on the New York Mercantile Exchange. July Brent crude on London’s ICE Futures exchange fell $2.41, or 4.8%, to end at $48.38 a barrel. The United States Oil Fund LP an exchange-traded product, dropped 4.5%.

Both WTI and Brent, marked their lowest settlements since Nov. 29—the day before the Organization of the Petroleum Exporting Countries reached an agreement to cutback production levels. For WTI, the $44 level marks key support, and if prices take that level out, they could drop to $38, said Flynn.

Two of the largest factions in Libya have made progress in reaching a deal to resolve the nation’s political and economic crises, BBC News reported late Wednesday. Clashes between armed groups had caused intermittent shutdowns of Libya’s biggest oil field. “A unified Libya could reach 1.5 million [barrels a day] in a few months, and it is excluded from OPEC quotas,” said James Williams, energy economist at WTRG Economics, who pegged current Libyan output at about 700,000 barrels a day. Libya and Nigeria don’t have set production limits under OPEC’s six-month agreement among members to cut output down by a total of roughly 1.2 million barrels from October 2016 levels. In additional to that, some major producers outside of OPEC, including Russia, agreed to cut about 600,000 barrel a day.

OPEC is set to decide whether to extend the pact into the second half of the year, when it meets on May 25 in Vienna. Williams said “Nigeria wants to extend its exemption from quotas, which is a signal it hopes to increase production.” The road to consensus on a new deal remains uncertain and bumpy as just one OPEC member rejecting an agreement would likely be enough to upend the entire effort because the rest of the group would quickly jump back into “market-share-first” mode by pushing their output back up to pre-cut levels. That decision is complicated by growing production in the U.S., which isn’t subject to the agreement.

U.S. government data released Wednesday showed that weekly domestic crude production rose and inventories fell less than expected, deepening skepticism that production cuts from the Organization of the Petroleum Exporting Countries and its allies aren’t making a dent in elevated global stockpiles.

Have a great day,

Loren R. Bailey, President
FUEL MANAGER SERVICES INC
“Serving the Trucking Industry Since 1992”