Fueling Strategy: Please fill as needed today/tonight – Be Safe

NYMEX Crude $ 48.66 UP $1.3700
NY Harbor ULSD $1.7480 UP $0.0012
NYMEX Gasoline $1.6991 DN $0.0488

NEWS
U.S. oil prices saw on their highest finish in three weeks on Tuesday, while gasoline prices dropped by nearly 3% as Gulf Coast refineries powered back up after the disruptions caused by Hurricane Harvey last week.

October West Texas Intermediate crude oil advanced $1.37, or 2.9%, to settle at $48.66 a barrel, marking the highest settlement for a most-active contract since Aug. 11, according to FactSet data. November Brent oil rose $1.04, or 2%, to $53.38 a barrel—topping the $53 level for the first time since May. The global benchmark last week widened its spread against WTI, as Harvey reduced demand for U.S. oil and was seen as increasing the need for imported oil. Meanwhile, gasoline for October slid 4.9 cents, or 2.8%, to end at $1.6991 a gallon, after rallying last week when Hurricane Harvey hit the Texas and Louisiana coast and shut down around 25% of U.S. refining capacity due to severe flooding. There was no settlement for oil and gasoline Monday because of the Labor Day holiday.

“What happens next in the energy markets will be all about how quickly the refineries come back online, and when downstream operations are restored to normal,” Tyler Richey, co-editor of the Sevens Report. “If the damage keeps refineries shut, expect further volatility and notable strength in the refined products, while a return to normal operations would be demand-side bullish for oil, and would see the products’ bid unwind.” As of late Sunday, about 17% of total U.S. refinery capacity remained shut, according to S&P Global Platts. Motiva Enterprises’s Port Arthur, Texas refinery, the nation’s largest, is in the initial phases of a refinery start up, according to a company statement Tuesday. Motiva expects the refinery to initially return to approximately 40% production by the end of this weekend.

Demand for crude is set to rise as refinery capacity recovers, while the shortage that has buoyed gasoline prices is likely to ease. Analysts at Commerzbank pointed out that Labor Day marked the end of the summer driving season in the U.S., “so the market focus is likely to move away from gasoline again.” “Generally speaking, little attention should be paid in the next few weeks to reports of crude and oil product stocks and trade given the numerous short-term disruptions,” they said. Inventory data for last week will be published by the American Petroleum Institute on Wednesday, delayed a day due to the holiday. Official supply figures from the U.S. Energy Information Administration are slated for Thursday.

Meanwhile, Hurricane Irma in the Atlantic is bearing down, “and if the expected track begins to favor a Gulf landfall, expect speculation bids to come flowing into the energy space again, including natural gas, which traded well last week on the weather-related drama and a less-reported bullish development in supply,” said Richey. For now, forecasters expect the storm to affect Florida.

Have a great day,

Loren R. Bailey, President
Fuel Manager Services Inc
“Serving the Trucking Industry Since 1992”
www.FuelManagerServices.com
Cellular: 479-790-5581
Office: 479-846-2761