Fueling Strategy: Please top all tanks tonight, Saturday AM wholesale prices will go up again 1.5 cents then another 3 cents Sunday AM – Be Safe

NYMEX Crude $ 46.04 UP $1.1100
NY Harbor ULSD $1.4755 UP $0.0295
NYMEX Gasoline $1.5152 UP $0.0296

NEWS
Oil prices rallied Friday to register a seventh-straight session gain, as data showing the first decline in the number of active U.S. oil rigs in 24 weeks fed expectations for further reductions in crude production.

West Texas Intermediate oil on the New York Mercantile Exchange notched its longest run of session climbs since the seven-week stretch ended Aug. 19, 2016. August WTI crude rose $1.11, or 2.5%, to settle at $46.04 a barrel. Prices shed about 9% for the quarter and tallied a decline of about 14.3% for the first half of the year, according to FactSet data, based on the most-active contracts. They ended down 4.7% for the month, but saw a weekly rise of 7%.

Data Friday from Baker Hughes showed that the number of active U.S. rigs drilling for oil declined by two to 756 rigs this week. That marked only the second time the weekly oil-rig count fell this year. Oil-rig numbers had climbed for 23 weeks in a row. Prices were already rebounding after official data released Wednesday showed total U.S. crude production dropped by 100,000 barrels a day last week, though some saw the fall as a temporary in the wake of a storm that passed through the Gulf of Mexico. Other analysts, however, believe that the trend of rising output may soon abate and the weekly fall in the U.S. oil-rig count backed that up. “The record breaking steak of rising rig counts has ended,” Phil Flynn, senior market analyst at Price Futures Group, told Market Watch after the rig data. “This could be another signal of a pullback in the shale patch.”

Jay Hatfield, portfolio manager of InfraCap’s MLP exchange-traded fund also believes that U.S. oil producers may soon ease drilling activity. “When oil prices recently headed toward the $40 range, retail gasoline prices declined below $2 a gallon in many parts of the country,” he said. And U.S. producers will also cut back on drilling due to lower cash flow from operations caused by the drop in prices,” Hatfield said. “We believe these two effects [will] cause oil to rally off the lows back toward the $50 area.” Still, investors remain skeptical that oil prices have stabilized because of the potential for stronger output from Libya and Nigeria, members of the Organization of the Petroleum Exporting Countries who aren’t taking part in the cartel-led production-cut agreement. Société Générale cut its price forecasts for both Brent and WTI Thursday, citing higher-than-expected supply growth from those two countries, as well as the U.S. Hatfield said he expects oil prices to remain in the $40 to $60 range for the year, with some potential upside to that range in 2018 as the “global expansion causes a steady increase in demand.”

Have a great day,

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