Fueling Strategy: Please wait to fill until after midnight if possible, Wednesday AM wholesale prices will drop 1 cent – Be Safe Tonight
NYMEX Crude $ 46.26 DN $.6630
NY Harbor ULSD $1.4711 DN $.0151
NYMEX Gasoline $1.4483 DN $.0186
NEWS
Oil futures settled at a two-week low on Tuesday, as strong consumer confidence data helping to lift the dollar and traders awaited reports that are expected to show a weekly increase in U.S. crude inventories.
October West Texas Intermediate crude fell by 63 cents, or 1.3%, to settle at $46.35 a barrel on the New York Mercantile Exchange after tapping highs above $47. The settlement was the lowest since Aug. 15, according to FactSet data. The October contract for global benchmark Brent crude lost 89 cents, or 1.8%, to $48.37 a barrel. “The petroleum markets have tipped from plus to minus with the help of a firmer U.S. dollar in book squaring ahead of U.S. weekly inventory data,” said Tim Evans, an energy analyst at Citi Futures and OTC Clearing.
The expiration of the futures contracts for October ICE Brent and October gasoline and heating oil on Nymex have also contributed to the recent market volatility. Prices turned lower Tuesday after data showed the U.S. consumer confidence index rose to 101.1 in August from a revised 96.7 in July. That’s the highest level since September 2015. “Consumer confidence came out strong, causing a surge in the dollar and causing longs in crude to cover,” said Phil Flynn, senior market analyst at Price Futures Group. The ICE U.S. Dollar Index was trading about 0.5% higher as oil futures settled. A stronger dollar can pressure prices for commodities traded in the greenback.
Meanwhile, the day’s news headlines show “contrasting story lines of interest,” with a report showing that “oil discoveries dropped to the lowest level in decades during 2015 as producers slashed exploration spending,” Evans said. “This should come as no surprise, since to find oil it is generally necessary to look for it, and this costs money.” New oil discoveries are at a roughly 70-year low, reports said, citing consulting firm Wood Mackenzie. “That bodes well for a long-term bullish outlook” on oil, said Flynn. In the shorter term, the U.S. Federal Reserve and the dollar is “providing headwinds but like ‘Brexit’, those fears about oil may be overblown,” Flynn told Market Watch. “We do have a lot of supply but at some point the market starts looking at record demand as well and the possibility of declining production.”
Energy traders were also eyeing a tropical depression in the vicinity of the Gulf of Mexico for any impact on oil and natural-gas production there. The National Hurricane Center said a tropical storm watch was likely to be issued for part of the Florida Gulf Coast later Tuesday.But the oil market is also starting to bet that major oil producers won’t reach a deal to stabilize output when the Organization of the Petroleum Exporting Countries holds an information meeting late next month. For now, traders await the week’s latest updates on U.S. supplies. The American Petroleum Institute releases its forecast late Tuesday, with official data from the Energy Information Administration to follow on Wednesday. Analysts polled by S&P Global Platts are looking for an increase of 600,000 barrels for crude stockpiles for the week ended Aug. 26. Gasoline inventories are also expected to be down by 1.1 million barrels.