Fueling Strategy: Please partial fill only tonight, Thursday AM wholesale prices will drop 3 cents – Be Safe Today

NYMEX Crude $ 49.59 UP $.4300
NY Harbor ULSD $1.6588 UP $.0175
NYMEX Gasoline $1.6448 DN $.0165

NEWS
Oil futures regained their footing in a choppy session to end modestly higher Wednesday as traders grappled with a smaller-than-expected decline in U.S. crude inventories but encouraging data on domestic demand.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in September rose 43 cents, or 0.9%, to settle at $49.59 a barrel. October Brent crude on London’s ICE Futures exchange gained 58 cents, or 1.1%, to $52.36 a barrel.

Oil had initially drifted to session lows after the Energy Information Administration reported a 1.5 million barrel drop in U.S. crude inventories last week. Analysts surveyed by The Wall Street Journal had penciled in, on average, a 3.1 million barrel decline. But refinery capacity utilization rose to 95.4%, versus expectations for a 0.2 percentage point decline to 94.1%, while refinery inputs rose 123,000 barrels a day to 17.4 million. Gasoline inventories, meanwhile, fell 2.5 million barrels, versus forecasts for a 500,000 barrel drop and demand hit a record above 9.8 million barrels a day, EIA said.

Oil was probably weaker initially because the crude number missed, but didn’t crash due to “pretty strong” demand numbers and a rise in refinery runs, said Phil Flynn, senior market analyst at Price Futures Group, in a phone interview. Oil was left overbought by the rally last week that took WTI above $50 a barrel, he said. Analysts said concerns about the ability of major oil producers to stick with output cuts were also a factor. Concerns resurfaced Tuesday as both Reuters and Bloomberg reported that output among members of the Organization of the Petroleum Exporting Countries jumped in July, partly due to a surge in production in Libya. If correct, that goes against the view that the group is adhering to output caps. The next OPEC monthly oil report is due on Thursday.

Against that backdrop, OPEC is scheduled to hold a two-day meeting next week to review members’ commitments to the production caps they have agreed upon to cut the global glut. Several smaller producers, such as Ecuador, have already voiced their dissension, saying they don’t have economic wherewithal to keep sidelining production amid low prices.

Have a great day,

Loren R. Bailey, President
Fuel Manager Services Inc
“Serving the Trucking Industry Since 1992”