Fueling Strategy: Please fill as needed tonight, Friday AM wholesale prices will go UP 3 cents – Be Safe Today!
NYMEX Crude $ 48.22 UP $1.4300
NY Harbor ULSD $1.5260 UP $0.0368
NYMEX Gasoline $1.4897 UP $0.0392
NEWS
Oil futures stretched their streak of gains to a sixth session in a row Thursday to settle at their highest level in nearly two months—lifting crude into a bull market.
A larger-than-expected weekly decline in U.S. crude stockpiles and a weaker dollar lifted prices by more than 20% from their recent lows—meeting the definition of a bull market—as some traders held out hope that major oil producers will ease output. September West Texas Intermediate crude rose $1.43, or 3.1%, to settle at $48.22 a barrel on the New York Mercantile Exchange. WTI prices are now 22% above their recent low on Aug. 2 of $39.51. October Brent crude on London’s ICE Futures exchange gained $1.04, or 2.1%, to $50.89 a barrel, with prices also up 22% from their low earlier this month.
WTI marked its highest settlement in about seven weeks, according to data from Dow Jones, while Brent finished at a roughly eight-week high. Both crude grades have now posted gains for six sessions in a row. “Oil futures continued to charge ahead to fresh highs, not because of any materially bullish fundamental news, but rather a short sellers strike as traders focus on the potential freeze that OPEC and Non-OPEC producers will discuss at a meeting next month,” said Tyler Richey, co-editor at The 7:00’s Report.
The Organization of the Petroleum Exporting Countries announced earlier this month that it would hold an informal meeting on the sidelines of an energy forum in Algeria in late September to talk about ways to stabilize the market, which may include possibly freezing production levels. Chances for an output freeze “remain slim,” said Richey. “If they were to disappoint this time though, the reaction could potentially be much more bearish than back in April because the underlying trend in U.S. production is increasing (bearish), while in Q2 it was decreasing (bullish).” Oil producers last spring had tried, and failed to agree on stabilizing production.
Weakness in the U.S. dollar versus its major currency rivals provided support to oil Thursday, which is traded in the greenback. The U.S. ICE Dollar Index was down 0.6%, losing 1.6% week to date. Minutes from the Federal Open Market Committee’s July meeting released late Wednesday “didn’t clear up the divided opinion between raising interest rates or leaving them unchanged,” said Darin Newsom, DTN senior analyst. “Most opinions now seem to be leading toward the latter in September (pre-election), with any increase (if any) not occurring until December.” “This has investment traders continuing to buy into key commodities like gold and crude oil,” he said.
Data from the Energy Information Administration Wednesday showed weekly declines for both crude and gasoline inventories, prompting prices that day to settle higher for a fifth session. The report also showed that total weekly domestic production rose by 152,000 barrels a day to 8.597 million barrels a day. The EIA later explained that the figure incorporates a “re-benchmarking”—a monthly adjustment the agency may make to address a “disconnect” between the weekly and monthly petroleum supply report and other data. Still, “in an absolute sense, the revision showed an increase in production suggesting that previous weekly reports were underreporting the true data,” said Richey.