Fueling Strategy: Please keep tanks topped tonight, Saturday AM wholesale prices will jump up another 2.5 cents then look for wholesale prices to drop about 3 cents Sunday AM- Be Safe Today!
NYMEX Crude $ 45.92 DN $.1100
NY Harbor ULSD $1.3779 DN $.0267
NYMEX Gasoline $1.5848 DN $.0132
NEWS
Oil futures finished Friday with a modest loss following news of a monthly climb in production from the Organization of the Petroleum Exporting Countries. But prices still tallied a nearly 20% gain for the month on expectations that U.S. output will continue to slow. Volatility was high on Friday. Prices found support early in the session from a drop in the U.S. dollar to its weakest in about 11 months. They turned lower after separate media surveys showed a monthly rise in OPEC crude output, then pared most of those losses after data showed a sixth straight weekly decline in the number of U.S. rigs drilling for oil.
June West Texas Intermediate crude fell 11 cents, or 0.2%, to settle at $45.92 a barrel on the New York Mercantile Exchange. For the month, prices finished roughly 19.8% above the $38.34 front-month contract settlement on March 31. On its expiration day, June Brent crude shed a penny to $48.13 a barrel on London’s ICE Futures exchange, with prices seeing a monthly gain of more than 21%. Phil Flynn, senior market analyst at Price Futures Group, attributed the price move lower Friday to a Bloomberg survey, which showed that April OPEC output rose 484,000 barrels to 33.217 million barrels a day, the highest on record at the news agency.
Separately, a Reuters survey that showed that OPEC’s April output rose to 32.64 million barrels a day from 32.47 million barrels a day a month earlier. The data caused “traders to book profits,” said Flynn. Data from Baker Hughes then showed that the number of active U.S. rigs drilling for crudefell by 11 to 332 as of Friday. There was no sign of recovery in the oil-rig count, despite the climb in oil prices, Flynn said. The drillers are “cash-strapped and they might not come on as quickly as some think.”
Declines in production and a weaker dollar also limited oil’s losses. “Production is down to October 2014 levels and the almighty U.S. dollar hits an 11-month low,” Daniel Holder, commodity analyst at Schneider Electric, remarked in a note. The ICE U.S. Dollar Index fell 0.7% on Friday. As oil is traded in dollars, a weaker greenback makes crude a more attractive buy for traders holding other currencies.
Meanwhile, U.S. output is slowly declining, down below 9 million barrels a day from a peak of 9.7 million barrels a day last April. Production outages from Nigeria to Venezuela have also taken barrels out of the oversupplied market. Some analysts, however, aren’t buying the rally, which has sent oil up more than 70% from the decade lows hit earlier this year. Still, with oil prices having come from over $100 per barrel in 2014 down to under $30 earlier this year, “investors anchor to the higher price, making the recent jump to the upper $40s less than noteworthy in many eyes,” said Jonathan Citrin of CitrinGroup, a financial advisory practice at Ameriprise Financial. “Whether the recent rebound in crude oil has legs remains to be seen.” Tyler Richey, co-editor of The 7:00’s Report, told MarketWatch that WTI prices hit some technical resistance near the $46.75 level and could see some further profit taking early next week, though that would “just be a pullback in an otherwise upward trending market.”