Fueling Strategy: Please partial fill tonight, Wednesday AM wholesale prices will drop 4 cents – Be Safe Tonight!

NYMEX Crude $ 29.88 DN $1.7400
NY Harbor ULSD $1.0109 DN $0.0256
NYMEX Gasoline $1.0008 DN $0.0822

NEWS
WTI oil prices slid again Tuesday to settle under $30 a barrel, as expectations for cuts in crude output from major producers faded and the market readied for weekly data that are expected to show a hefty increase in U.S. supplies.

Gasoline was the biggest loser, plunging close to 8% to settle at its lowest level since late 2008, as the recent blizzard in the East was seen contributing to lower demand and an expected fresh record in U.S. stockpiles of the fuel. March West Texas Intermediate crude fell $1.74, or 5.5%, to settle at $29.88 on the New York Mercantile Exchange. That was the lowest settlement since Jan. 21. The April contract for Brent crude fell $1.52, or 4.4%, to $32.72 a barrel on London’s ICE Futures exchange, for its lowest finish in about a week.

“The constructive dialogues between the [Organization of the Petroleum Exporting Countries] and non-OPEC countries has broken once again and we have less hopes that we will [have a] happy ending,” said Naeem Aslam, chief market analyst at AvaTrade. “The fact is that OPEC can see from their lens that their [market-share] strategy is working and BP, the giant oil producer, has confirmed how bad and ugly” it is, he said. BP PLC on Tuesday reported a sharp loss for the fourth quarter on the back of the steep slide in oil prices.

At the same time, the prospect of Russia striking a deal with major producers from OPEC is considered unlikely by most market observers. As Russia’s preliminary government data show production hit a post-Soviet era high, Foreign Minister Sergei Lavrov has gone on record to say Russia is willing to meet top oil producers to talk about stabilizing the market, said Matt Smith, commodity analyst at ClipperData. Russia has reported January production of 10.88 million barrels a day. Looking ahead, the American Petroleum Institute releases its weekly U.S. inventory report late Tuesday ahead of Wednesday’s official figures from the Energy Information Administration. Citi Futures expect the data to show a rise of 5 million to 6 million barrels in crude supplies, along with an increase of 1 million to 2 million for gasoline stockpiles. Distillates, which include heating oil, are seen down 1 million to 2 million barrels.

On Nymex Monday, March gasoline suffered the biggest hit, down 8.2 cents, or 7.6%, to end at $1.0008 a gallon, the lowest settlement since December 2008. The fuel saw pressure based on the “psyche of U.S. oil inventories hitting 500 million barrels for the first time, continued economic weakness in China … [and] anemic gasoline demand as we sag through winter,” said Patrick DeHaan, senior petroleum analyst at GasBuddy.com.

The EIA report is likely to show poor gasoline demand due to the snowstorm and aftermath in the East late last month, as well as a large build in gasoline supplies, said Denton Cinquegrana, chief oil analyst at the Oil Price Information Service. He thinks this is the start of the purging cycle for the winter gasoline grades of fuel.