Fueling Strategy: Please partial fill only today/tonight, Saturday we’ll see about a penny drop in wholesale prices – Be Safe Today

NYMEX Crude $ 45.77 DN $1.1500
NY Harbor ULSD $1.5152 DN $.0284
NYMEX Gasoline $1.5633 DN $.0429

NEWS
Oil ended at its lowest level in a bout a week on Friday, with expectations for a rise in OPEC output pressuring prices ahead of coming meeting of major producers.

Tanker-tracking firm Petro-Logistics said Friday oil production from the Organization of the Petroleum Exporting Countries is set to rise by 145,000 barrels a day this month to more than 33 million barrels a day, according to a report from Reuters. The news sent prices to fresh intraday lows. But prices finished just above those lows after Baker Hughes released weekly figures showing that the number of active U.S. rigs drilling for oil edged down by 1 to 764 this week. The count, which is often seen as proxy for the outlook on domestic production, had climbed in each of the last two weeks.

September West Texas Intermediate crude lost $1.15, or 2.5%, to settle at $45.77 a barrel on the New York Mercantile Exchange after a low at $45.71. That was the lowest since July 12, according to FactSet data. For the week, the contract saw a loss of roughly 2.1%. Based on the front-month August contract finish of $46.54 last Friday, prices have lost about 1.7% for the week. September Brent crude on London’s ICE Futures exchange fell $1.24, or 2.5%, to $48.06—down about 1.7% from a week ago. The international benchmark had tapped the $50-a-barrel level for the first time in more than a month on Thursday before giving up gains in a move that some attributed to profit-taking.

The moves in crude come ahead of a meeting Monday of OPEC oil ministers with some other producers who are not members of the group, including Russia. They are set to review the production-cut deal, which is set to expire at the end of March next year. They are also scheduled to discuss possible output limits for OPEC members Nigeria and Libya, which have been exempt from the cuts and have been raising their production sharply this year. “The market has increasingly lost confidence in the [output] deal’s ability to rebalance the market,” said Robbie Fraser, commodity analyst at Schneider Electric. “Several sources point to June being a particularly weak month for overall compliance, with expectations that July compliance will suffer further.” “That continues to combine with U.S. fundamentals, which despite stock draws, continue to challenge any bullish move by the market due to ongoing production gains,” he said in a note. Holly Graham, market analyst at oil-and-gas analytics firm Drillinginfo, said that based on her company’s data, monthly rig growth was between 5% and 10% each month from June 2016 to May 2017. “Over the last two months, however, those increases have flattened out as prices have fallen.”

Meanwhile, Li Li, research director at ICIS China, said that while market fundamentals still dominate, automated systems, trade based on trends have become more influential. As such, this year’s negative momentum has been hard to break. Still, there are some bullish factors in play. There have been reports that end-of-May oil storage in Saudi Arabia was at its lowest level since the start of 2012. Also, China is set to significantly loosen restrictions on private firms entering the domestic distribution and storage space. That may “spur an upsurge in private storage-capacity growth,” and boost crude imports, said BMI Research.

Back on Nymex, petroleum-product prices also declined.

Be Safey

Loren R Bailey, Founder & Owner
FUEL MANAGER SERVICES INC
“Serving the trucking industry since 1992”