Fueling Strategy: Please partial fill tonight due to Friday AM wholesale prices will fall another 2 cents – Be Safe Today!!
NYMEX Crude $ 31.20 UP $.7200
NY Harbor ULSD $ .9808 UP $.0114
NYMEX Gasoline $1.0684 UP $.0156
NEWS
Oil futures rebounded Thursday, settling higher for a second straight session after dips below the key $30 level this week. But market watchers continue to voice concerns over swelling U.S. inventories and the potential for Iranian oil to add to the glut.
Natural-gas futures meanwhile, sank nearly 6% to their lowest settlement of the year so far, as data showed U.S. supplies of the commodity fell less than expected last week. February West Texas Intermediate crude tacked on 72 cents, or 2.4%, to settle at $31.20 on the New York Mercantile Exchange. On its expiration day, February Brent crude traded on London’s ICE Futures exchange also settled up 72 cents, or 2.4%, at $31.03 a barrel. Tyler Richey, co-editor of The 7:00’s Report cautioned against viewing this run-up as a sustained rally, equating the moves to buying that occurs after heavy selling and overly negative sentiment.
WTI prices could see a “violent squeeze carry futures up to the $35 area—or almost 15% higher from current levels,” he said. “Although the fundamentals remain decidedly bearish and we are likely to see another dip into the $20s in the near term, the market is badly oversold and sentiment remains extremely negative right now, which is raising the threat of a short squeeze as we approach the long weekend.” It “feels like the calm before the storm…as the futures market has been ‘coiling up’ since Tuesday’s dip below $30 a barrel” for WTI, Richey said.
Monday is the Martin Luther King, which means U.S. oil and stock markets will be closed.
On Wednesday, the Energy Information Administration reported that U.S. supplies of crude, gasoline and distillates all climbed last week and domestic oil production edged higher. The fundamentals from Wednesday’s data are “just awful,” said Richard Hastings, macro strategist at Seaport Global Securities. “With production at these levels, and the huge volume of crude oil imports associated with tons of floating storage off the Gulf Coast, then the volume of oil going into the system signals constant risks of oversupply of oil and products.”
Meanwhile, the International Atomic Energy Agency is expected to release a report detailing whether Iran has met the requirements under its nuclear deal with the West. News reports suggested sanctions on Iran could be lifted as early as this weekend. In the current market, there is “simply too much oil sloshing around and more looms from Iran,” said Matt Parry, senior oil analyst at the International Energy Agency, told MarketWatch. He expects the fundamental drivers in the oil market to remain bearish, “likely until at least 2017.”