Fueling Strategy: Tonight partial fill only due to Friday AM wholesale prices will drop 3 cents – Be Safe

NYMEX Crude $ 42.74 UP $.2100
NY Harbor ULSD $1.3716 UP $.0068
NYMEX Gasoline $1.4345 UP $.0240

NEWS
Oil finished modestly higher Thursday, with a second weekly decline in U.S. crude supplies helping prices recoup some of their recent losses. But prices were still stuck in a bear market, defined as a decline from a recent peak of at least 20%, on lingering worries about strong domestic production growth.

August West Texas Intermediate crude advanced 21 cents, or 0.5%, to settle at $42.74 a barrel on the New York Mercantile Exchange. It fell 2.3% on Thursday to $42.53, the lowest most-active futures price settlement since Aug. 10, according to FactSet data. Brent crude for August delivery on London’s ICE Futures exchange added 40 cents, or 0.9%, to $45.22 a barrel.

Prices fell Wednesday as data from the Energy Information Administration showed a weekly climb in U.S. crude production, feeding concerns that efforts by other major producers to cut down global supplies down to a five-year average will fail. The report, however, also showed that crude stockpiles declined for a second week in a row. Tariq Zahir, managing member of Tyche Capital Advisors, said he believes oil prices “can get weaker or at least we feel rallies will be sold into” because of several reasons, including a continued rise in U.S. production, poor demand for gasoline and gains in active U.S. oil-rig counts.

On Nymex Thursday, July gasoline tacked on 2.4 cents, or 1.7%, to $1.435 a gallon and July heating oil added under a cent, or 0.5%, to $1.372 a gallon.
Data show U.S. shale-oil producers churning out 9.35 million barrels last week, almost 8% higher than the same period last year. While production growth rates showed signs of petering, the data reaffirmed market fears that U.S. producers have become more efficient to weather low prices. While the Organization of the Petroleum Exporting Countries and its allies have pared back output since January, the void created by the cuts have been filled by the “relentless drilling in the U.S. and more output in Libya,” said ANZ Research.

Energy investors will be monitoring Friday’s weekly U.S. oil rig count to gauge the future production rate there.

Meanwhile, ING Commodities expects the impact from tropical storm Cindy in the Gulf of Mexico, which has already closed some oil rigs and platforms, will likely push crude inventories lower next week. The storm had prompted the shut in of 17.2% of oil production and 0.3% of natural-gas output in the Gulf by Wednesday afternoon, according to the U.S. Bureau of Safety and Environmental Enforcement. But on Thursday, the shut ins fell to 16.5% for oil and to virtually zero for gas as Cindy was downgraded to a tropical depression.

Have a great day,

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