Fueling Strategy: Please keep tanks topped today/tonight, Wednesday AM wholesale prices will jump UP 2 cents – Be Safe Today

NYMEX Crude $ 51.47 UP $.3400
NY Harbor ULSD $1.6067 UP $.0046
NYMEX Gasoline $1.6614 DN $.0012

NEWS
Oil prices finished higher Tuesday, buoyed by expectations that OPEC will decide later this week to extend production cuts for at least another six months.

Traders also weighed President Trump’s plan to sell some crude from the U.S. Strategic Petroleum Reserve as part of his broader budget proposal.

July West Texas Intermediate crude rose 34 cents, or 0.7%, to settle at $51.47 a barrel after taking over as a lead contract at Monday’s close. July Brent crude gained 28 cents, or 0.5%, to $54.15 a barrel. Prices for both benchmarks ended at their highest levels in more than a month. Oil prices have now tallied their fifth session climb in a row, with July WTI crude rebounding by around 11% over the past two weeks, as expectations grow for an extension to the production cut agreement led by members of the Organization of the Petroleum Exporting Countries who will convene on Thursday.

“The most likely is the extension of the cuts for nine months. Sounds like everyone is on board there,” said Denton Cinquegrana, a chief oil analyst at the Oil Price Information Service. “That should also go a long way toward balancing out supplies.” “The tricky part is going to be if things get balanced after the nine months, avoiding a production free for all and there is no discipline amongst producers,” he said. “The other two are much less likely though, I would give the nod to a deeper cut versus abandoning all together,” he added. “The deeper cut theory has gotten some play recently and considering the discipline with production cuts has been a bit of a surprise.”

Meanwhile, oil prices briefly saw a pull back following news early Tuesday of the 2018 U.S. budget proposal, which includes the sale of nearly half of the U.S.’s strategic reserves over the course of 10 years. Even if the proposal is passed, oil sales from the SPR wouldn’t start until 2018 and the overall amount of sales would be “small,” Anas Alhajji, an independent energy expert and former chief economist at NGP Energy Capital Management, told MarketWatch. And over the course of the decade of sales, the world will probably need that extra oil anyway, he said, adding that he expects global oil demand to eventually exceed 100 million barrels a day.

Back on Nymex, June gasoline fell less than 1%, to $1.661 a gallon, while June heating oil added 0.3% to $1.607 a gallon. June natural gas settled at $3.219 per million British thermal units, down 11.1 cents, or 3.3%.

Rising U.S. oil production has been a key concern. The oil market will get updates on U.S. supplies from the American Petroleum Institute late Tuesday and the Energy Information Administration early Wednesday. Analysts polled by S&P Global Platts forecast a decline of 2.8 million barrels in crude-oil stocks for the week ended May 19. They also forecast a fall of 400,000 barrels for gasoline inventories and a drawdown of 500,000 barrels for distillates.

Have a great day,

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