Fueling Strategy: Please partial fill “only” tonight, Wednesday AM wholesale prices will drop 2 cents – Be Safe Today
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NYMEX Crude $ 53.18 UP $.4300
NY Harbor ULSD $1.6415 UP $.0150
NYMEX Gasoline $1.5759 UP $.0092
NEWS
Oil prices climbed higher on Tuesday ahead of weekly U.S. inventory data on evidence the global market is tightening as lower production by OPEC and other exporters drains stocks. Increased drilling in the United States, however, could keep a lid on prices.
U.S. light crude settled up 43 cents, or 0.8 percent, to $53.18. Benchmark Brent crude was up 17 cents at $55.40 a barrel by 2:33 p.m. ET (1933 GMT).
Ministers from the Organization of the Petroleum Exporting Countries and big producers outside the group said on Sunday that of the almost 1.8 million barrels per day (bpd) they had agreed to remove from the market starting on Jan. 1, 1.5 million bpd had already been cut. “The petroleum markets are bobbing back to the upside on light volume, with the January production cuts from OPEC and cooperating non-OPEC producers as the primary support,” Tim Evans, Citi Futures’ energy futures specialist, said in a note.
The push by Republicans in the U.S. House of Representatives for a shift to border-adjusted corporate tax (BTA) could push WTI prices higher than Brent, triggering large-scale domestic production, according to analysts at Goldman Sachs. “We expect WTI could move to a $10 per barrel premium to Brent from a $3 discount – a $13 (+25 percent) relative move immediately.” Brent’s premium to WTI narrowed on Tuesday. The appreciation in WTI could be an incentive for producers to sharply increase output, the bank said, warning that the ramp up in U.S. production in a market only starting to rebalance would create a renewed large oil surplus in 2018, which could lead to an immediate sharp decline in global oil prices.
Bernstein Energy said global oil inventories declined 24 million barrels to 5.7 billion barrels in the fourth quarter of last year from the previous quarter. This amounts to about 60 days of world oil consumption. “This is the biggest quarterly decline since the fourth quarter of 2013, confirming that inventory builds are now reversing as the market shifts from oversupply to undersupply,” Bernstein analysts said in a note to clients.