Fueling Strategy: Please partial fill only tonight, Thursday AM wholesale prices will go down 1.5 cents – Be Safe Today!

NYMEX Crude $ 41.71 DN $1.0600
NY Harbor ULSD $1.3184 DN $0.0123
NYMEX Gasoline $1.3014 DN $0.0448

NEWS
Oil futures settled Wednesday at their lowest level in a week after U.S. government data showed a weekly climb in crude inventories and a report from OPEC revealed record production from Saudi Arabia in July.

The news follows an announcement by Organization of the Petroleum Exporting Countries earlier this week that its members will hold an informal meeting on the sidelines of an energy forum in Algeria in late September to discuss ways to stabilize the oil market. September West Texas Intermediate crude lost $1.06, or 2.5%, to settle at $41.71 a barrel on the New York Mercantile Exchange. Trading was volatile, with prices posting gains in the immediate wake of the U.S. supply data, topping the $43 level—up from $42.98 before the data. October Brent crude on London’s ICE Futures exchange fell 93 cents, or 2.1%, to end at $44.05 a barrel. WTI and Brent crude futures finished at their lowest levels since Aug. 3, according to Fact Set data.

“The market is very choppy…as there are a lot of moving parts at work but inventory data is the primary focus,” said Tyler Richey, co-editor of The 7:00’s Report.

“The EIA headlines today, on balance, were not anything shocking as the numbers were at least in-between the expectations and the [American Petroleum Institute] figures for the most part,” he said. The U.S. Energy Information Administration reported early Wednesday that domestic crude supplies climbed, but inventories of gasoline and distillates, which include heating oil and diesel, declined in the week ended Aug. 5. Crude supplies rose 1.1 million barrels, the EIA said. That was contrary to the 1.75 million-barrel fall expected by analysts polled by S&P Global Platts, but the API late Tuesday reported a larger climb of 2.1 million barrels. The EIA report also showed that total U.S. crude production fell by 15,000 barrels a day to 8.445 million barrels a day last week. Gasoline supplies, meanwhile, fell 2.8 million barrels, while distillate stockpiles, which include heating oil, declined by 2 million barrels last week, according to the EIA. Analysts surveyed by S&P Global Platts were looking for a draw of 1.6 million for gasoline and a rise of 400,000 barrels for distillates.

On Nymex, September gasoline fell by 4.5 cents, or 3.3%, to $1.301 a gallon, while September heating oil shed 1.2 cents, or 0.9%, to $1.318 a gallon.

“In recent weeks, it seems the market has been reacting closer to the weekly product data from the EIA,” said John Macaluso, an analyst at Tyche Capital Advisors. “Despite a build in crude oil inventories and a build [at the crude storage hub] in Cushing, Okla., some [temporary] strength was shown in the market, likely from the draws seen in gasoline and distillates.” Following a test below $40 last week, the oil market appears to be “establishing a new range to trade,” he said, adding that he expects to see a test below $40 level again before the month’s end.

Saudi Arabia has said that its oil output hit a record in July, with production at 10.67 million barrels. That news followed expectations earlier this week that OPEC may reach a pact next month to stem output. Also, in a report released Tuesday, the EIA raised its output expectations for this year and next. “Bottom line fundamentally, with OPEC clearly still pumping at ‘full-throttle,’ underscored by the news that Saudi Arabia hit a new output record in July, declines in U.S. production are the only path to balanced market,” said Richey. “So, output levels stabilizing in the U.S. is the most important underlying influence on the oil market right now, and it is a bearish one.”