Fueling Strategy: Please keep tanks topped tonight, Thursday AM wholesale prices will go UP 3 cents – Be Safe Today
NYMEX Crude $ 45.96 DN $.0048
NY Harbor ULSD $1.6738 UP $.0083
NYMEX Gasoline $1.8847 UP $.1014
NEWS
Crude-oil futures ended lower Wednesday as gasoline prices rallied to a 2-year high, with traders expecting upcoming government reports to reveal the impact of Hurricane Harvey-related crude production and refinery shutdowns. Traders appeared unfazed by the latest data, mostly covering the time before Harvey hit the Texas Coast, which showed a sizable weekly drop in U.S. crude supplies and gasoline stockpiles that held steady last week. It’s “the calm before the storm—literally,” Matt Smith, director of commodity research at ClipperData, told MarketWatch.
Data from the Energy Information Administration Wednesday have “done little to distract the market from current events, with the data superseded by widespread refinery outages,” he said. “Refinery runs ahead of the storm were exceedingly strong, showing a counter-seasonal increase, and a solid one at that.” “Combine this with higher refining activity and lower imports—as they tailed off at the end of last week due to Hurricane Harvey—and a chunky draw to crude stocks has been seen,” he said.
On the New York Mercantile Exchange, October West Texas Intermediate crude fell 48 cents, or 1%, to settle at $45.96 a barrel—the lowest finish since July 21, FactSet data show. Meanwhile, October Brent crude on London’s ICE Futures exchange fell $1.14, or 2.2%, to $50.86 a barrel.
The EIA said Wednesday that domestic crude supplies dropped by 5.4 million barrels for the week ended Aug. 25, following declines in each of the last eight weeks. Analysts surveyed by S&P Global Platts produced a consensus forecast for a drop of 1.5 million barrels. The American Petroleum Institute had reported late Tuesday a decline of 5.8 million barrels, according to sources. The data don’t show the actual effects from Hurricane Harvey, said John Macaluso, an analyst at Tyche Capital Advisors. Some analysts, however, said the figures do illustrate some of the early preparation made ahead of the storm, including a slowdown in crude production in the Gulf of Mexico. “Due to the situation in the Houston and Louisiana area, multiple refineries have shut down including the nations largest refinery,” Motiva Enterprises’ Port Arthur refinery, said Macaluso. The refinery is operated by Saudi Arabia state oil giant Saudi Aramco. “Next week’s EIA data should see large draws in products due to refinery outages, prompting large builds in oil inventories,” Macaluso said. About 1.4 million barrels of extra oil that “won’t be refined to fuels will be sent to storage as long as refineries are shut-in.”
Gasoline stockpiles were unchanged for the week, while distillate stockpiles edged up by 700,000 barrels, according to the EIA. The data on the products defied survey forecasts for a decline of 1.9 million barrels for gasoline and a fall of 600,000 barrels for distillates.
Refinery shutdowns across Texas due to the weather system mean that crude inventories are likely to rise as refiners no longer have the capacity for further oil intake. That has weighed on crude prices, while gasoline and other refined product prices have soared on fears of fuel shortages across the country.
Have a great day,
Loren R. Bailey, President
Fuel Manager Services Inc
“Serving the Trucking Industry Since 1992”
www.FuelManagerServices.com
Cellular: 479-790-5581
Office: 479-846-2761