Fueling Strategy: Please partial fill only tonight, Wednesday AM wholesale prices will drop 1.5 cents – Be Safe Today

NYMEX Crude $ 43.23 DN $.9700
NY Harbor ULSD $1.3949 DN $.0162
NYMEX Gasoline $1.4240 DN $.0266

NEWS
Oil on Tuesday marked its lowest finish since August, with prices sinking into bear-market territory as investors remained concerned that rising output from the U.S. and Libya will offset OPEC-led production cuts. Meanwhile, natural-gas prices got a modest boost as traders eye two tropical storms that have formed in the Atlantic.

July West Texas Intermediate crude declined by 97 cents, or 2.2%, to settle at $43.23 a barrel on the New York Mercantile Exchange on the contract’s expiration day. That was the lowest front-month contract finish since Sept. 16, according to data from Dow Jones. Prices also ended down 20.6% from 2017’s year-to-date high above $54—putting them in bear-market territory. Crude’s last drop into bear-market territory “actually signaled a bottom” for prices, said Phil Flynn, senior market analyst at Price Futures Group. “The bears are driving us lower and if they keep it up, they will drive [U.S.] shale producers into retreat.”

August crude which became the front-month contract at the settlement, lost 92 cents, or 2.1% to $43.51 a barrel. Brent crude for August delivery on London’s ICE Futures exchange slid 89 cents, or 1.9%, to $46.02 a barrel. Prices ended at their lowest since mid November. WTI saw “capitulation” ahead of the July contract’s expiration, with supply-glut fears being fed by expectations of higher Libyan production, said Flynn. Libya, which is exempt from the output-cut accord led by the Organization of the Petroleum Exporting Countries, has ramped up production to 900,000 barrels a day, adding further pressure on the market that is awash with surplus.

Additionally, concerns about higher U.S. output kept prices under pressure. Various energy-monitoring bodies, such as the International Energy Agency, of late have projected U.S. crude output will continue rising through next year—-increases which stand to negate the bulk of the continuing OPEC-led cuts. Weekly U.S. supply data from the American Petroleum Institute are out later on Tuesday, with the much-anticipated Energy Information Administration inventory report due Wednesday. Analysts surveyed by S&P Global Platts expect the EIA data to show that oil inventories fell 2 million barrels last week.

The OPEC-led agreement that went into effect on Jan. 1 has so far failed to cut global production down to five-year averages. Morgan Stanley pointed out that identifiable oil inventories—both oil and products in the Organization for €Economic Cooperation and Development, China and selected other non-OECD countries—increased some at a rate of around 1 million barrels a day in the first quarter.

Have a great day,

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