Fueling Strategy: Please fill as needed tonight – Be Safe

NYMEX Crude $ 47.05 DN $1.4700
NY Harbor ULSD $1.4864 DN $0.0332
NYMEX Gasoline $1.4842 DN $0.0287

NEWS
Oil futures settled with a drop of 3% on Monday as investors cashed in on a seven-session streak of gains, pressured by expectations of higher global crude production. Bets that major oil producers will agree to stabilize oil output at a meeting late next month fed a rally last week, but expectations for an agreement have faded and the market is eyeing the potential for higher production from Iraq and Nigeria.

September West Texas Intermediate crude slid $1.47, or 3%, to settle at $47.05 a barrel on the New York Mercantile Exchange. That was the largest one-day dollar and percentage decline since Aug. 1.
“The slowed covering of short positions relative to the torrid pace in recent weeks as the prospect of a Saudi-Iran agreement to freeze production grows increasingly unlikely, in conjunction with the potential of increased exports from Iraq and Nigeria are certainly weighing on prices,” Troy Vincent, an oil analyst at Clipper Data told Market Watch. It is also worth noting, however, “that the market was simply overbought from a technical perspective—rallying too much too fast.” October Brent crude on London’s ICE Futures exchange meanwhile, fell $1.72, or 3.4%, to $49.16 a barrel.

Daniel Holder, commodity analyst at Schneider Electric, said “Iraq and Nigeria are expected to increase exports in the coming weeks.” In Iraq, exports from three oil fields in the Kirkuk region in Northern Iraq are expected to increase this week “after arrangements have been made for the oil to flow through pipelines managed by the Kurdish Regional Government,” he said, adding that total Iraqi production is expected to increase by roughly 150,000 barrels a day. Meanwhile in Nigeria, the Niger Delta Avengers have officially announced an end to their attacks on foreign-owned oil infrastructure “in a signal to the Nigerian government that the militia is ready to begin talks, which could increase production over the coming weeks by several thousand barrels a day,” said Holder. Growing expectations that heavyweight oil producers might reconsider a production freeze at their meeting next month had lifted the oil market back into a bull market last week.

However, optimism has fizzled out. Analysts at Morgan Stanley also said a deal remains “highly unlikely,” as there are too many headwinds and logistical challenges. Overproduction, driven by producers’ aim to expand market shares, has caused prices to tank in the past two years to as low as $26 per barrel in February. While prices have clawed back significantly, they are still much lower than the above-$100 threshold seen in mid-2014, a level that analysts say will be hard to reclaim given the overhang of product.

And as prices inch higher, more U.S. shale producers are enticed to head back to oil fields. According to data provided Friday by industry group Baker Hughes the number of active oil rigs in the U.S. rose by 10 last week, bringing the total to 406. The oil-rig count, typically viewed as a proxy for activity in the sector, is up roughly 28% in the past three months.