Fueling Strategy: Please partial fill only tonight, Wednesday AM wholesale prices will drop 3 cents – Be Safe Tonight!

NYMEX Crude $ 47.55 DN $.0400
NY Harbor ULSD $1.5996 DN $.0061
NYMEX Gasoline $1.5795 UP $.0028

NEWS
Oil pared much of their earlier losses on Tuesday, with U.S. prices finishing just a few cents lower and holding ground at their lowest level in three weeks. Concerns over growing U.S. shale-oil production weighed on the market, but prices found some support from the latest forecasts calling for a decline in weekly U.S. crude supplies.

September West Texas Intermediate crude oil fell 4 cents, or less than 0.1%, to settle at $47.55 a barrel on the New York Mercantile Exchange—off the day’s low of $47.02. Prices again settled at their lowest level since July 24, according to FactSet data. They dropped 2.5% on Monday. Brent oil for October settled 7 cents, or 0.1%, higher at $50.80 a barrel on ICE Futures Europe—bouncing off an earlier low of $50.02 a barrel. Prices for Brent had settled Monday at their lowest since late July.

Oil likely saw “some value buying moving into the market,” Robbie Fraser, commodity analyst at Schneider Electric, told MarketWatch as prices pared earlier losses. Oil’s moves are reflective of the “tight trading window we’re in right now,” he said. “The market doesn’t want to take WTI prices over $50 [a barrel] and encourage U.S. production growth, but Brent prices below $50 are viewed as too low, with inventories on the decline and demand showing relative strength.” “Something has to give at some point, but for now there’s enough interest on either side of this market to keep things fairly range bound,” he added.

The oil market will get its weekly data on U.S. petroleum supplies from the American Petroleum Institute late Tuesday and from the EIA early Wednesday. Analysts polled by S&P Global Platts expect the EIA report to show that crude supplies fell 3.6 million barrels for the week ended Aug. 11. That would mark a seventh weekly decline in a row for the government data.

The survey also showed expectations for declines of 400,000 barrels for gasoline stockpiles and 700,000 barrels for distillates, which include heating oil. Back on Nymex, gasoline for September rose less than a half cent to $1.580 a gallon, while September heating oil fell under a penny, or 0.4%, to $1.600 a gallon. September natural gas declined by 2.4 cents, or 0.8%, to $2.935 per million British thermal units.

Oil prices were already on the decline Monday, then worsened after the U.S. Energy Information Administration said it expects to see a climb in crude output from key U.S. shale regions of 117,000 barrels a day in September to 6.149 million barrels a day. The report also showed that the number of drilled, but uncompleted wells, or DUC, climbed by 208 in July from June to 7,059. “This is also bearish because the more DUC wells there are, the more capacity is ready to come online in the face of any sort of price rally,” Tyler Richey, co-editor of the Sevens Report, told MarketWatch Monday afternoon. “So, even if prices rebounded—say on OPEC developments or geopolitics—the subsequent surge in U.S. production would likely spur another decisive imbalance in oil economics as supply would quickly outpace demand.”

Have a great day,

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