Fueling Strategy: Please partial fill only tonight, Wednesday AM wholesale prices will drop 5 cents – Be Safe Tonight

NYMEX Crude $ 47.64 UP $.2700
NY Harbor ULSD $1.5912 UP $.0200
NYMEX Gasoline $1.5908 UP $.0067

NEWS
Oil prices ended higher Tuesday, buoyed by expectations that U.S. government data this week will show that domestic supplies of crude oil fell for an eighth-consecutive week.

The September contract for West Texas Intermediate crude oil which expired at Tuesday’s settlement, rose 27 cents, or 0.6%, to settle at $47.64 a barrel on the New York Mercantile Exchange, after slumping 2.4% on Monday. The new front-month October contract advanced 30 cents, or 0.6%, to finish at $47.83 a barrel. October Brent rose 21 cents, or 0.4%, to $51.87 a barrel on the ICE Futures Europe exchange, recouping part of Monday’s 2% slump. That weakness came amid a lack of major news from a meeting between members of the Organization of the Petroleum Exporting Countries and non-cartel producers about compliance with the output-cut agreement.

Media reports, citing sources close to OPEC, said compliance with the agreed production targets has fallen to 94% in July, compared with 98% in June. “OPEC punted at their technical meeting and put off a decision to extend [the output-cut agreement] until their November meeting,” said Phil Flynn, senior market analyst at Price Futures Group. Kuwait’s oil minister Essam al-Marzouq said on Kuwait TV Monday that OPEC will discuss whether to end or extend the production-cap deal at a meeting in November, according to media reports. With the expiration of the September WTI futures contracts, prices climbed, but pulled back from the session’s highs as traders “look to the heart of the shoulder season when gasoline demand dips and refineries go into maintenance,” said Flynn.

But the weekly drop in the U.S. oil-rig count reported Friday, as well as news that BHP Billiton is getting out of the U.S. shale business is “raising questions about the level of U.S. oil production going forward,” he said. And the market will have to prepare for “another big drop in U.S. crude supply,” Flynn said.

The American Petroleum Institute will issue its weekly supply data late Tuesday, while the Energy Information Administration’s report will be released Wednesday morning. Last week, the EIA reported an 8.9 million-barrel drop in crude supplies—the biggest such drop in almost a year and the seventh weekly fall in a row.

Analysts polled by S&P Global Platts expect the EIA to report another decline for the week ended Aug. 18. On average, they forecast a fall of 3.7 million barrels. They also look for a drop of 1.3 million barrels in gasoline stockpiles and a decline of 500,000 for distillates, which include heating oil.

Have a great day,

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