Fueling Strategy: Please fill as needed tonight – Be Safe
NYMEX Crude $ 47.03 UP $1.0300
NY Harbor ULSD $1.5128 UP $0.0297
NYMEX Gasoline $1.5348 UP $0.0211
NEWS
Oil prices notched an eighth-straight session gain Monday, the longest such streak of wins for U.S. crude in more than seven years, as the first weekly decline in U.S. oil-drilling activity since January buoyed expectations that domestic production will see a lasting retreat.
August West Texas Intermediate crude rose $1.03, or 2.2%, to settle at $47.07 a barrel on the New York Mercantile Exchange, ahead of the U.S. Independence Day holiday Tuesday. WTI prices tallied an eight-straight session gain. That was the longest since the 10-session streak of gains from between Dec. 22, 2009 to Jan. 6, 2010, according to data from Dow Jones, tracking the continuous most-active contract. September Brent crude on London’s ICE Futures exchange tacked on 91 cents, or 1.9%, to end at $49.68 a barrel. Both WTI and Brent ended at their highest levels in almost four weeks. Crude prices lost just over 14% for the first six months of 2017, as concerns that production cuts lead by the Organization of the Petroleum Exporting Countries will fail to bring balance to the market’s supply and demand. Some key producers, including the U.S., which isn’t part of OPEC, continue to show strong output.
But Friday’s session had already marked WTI oil’s first seven-session winning streak since August, capping gains of 7% last week for the U.S. oil benchmark and 5.2% for Brent. The fall in Baker Hughes’ weekly oil-rig count reported Friday, after a record 23-straight weeks of rising numbers of active rigs, helped stoke sentiment that shale producers may have hit a bottleneck amid prolonged low prices. That helped the energy space “catch a big in thin, holiday trading,” said Tyler Richey, co-editor of the Sevens Report.
The data followed a report from the Energy Information Administration released Wednesday, which revealed a weekly fall of 100,000 barrels in total U.S. crude production to 9.25 million barrels a day. “The combination of the falling rig count, along with the drop in U.S. oil production is signaling to the market that maybe we will see [an extended] pullback in U.S. production,” said Phil Flynn, senior market analyst at Price Futures Group. Upbeat U.S. economic data Monday also boosted sentiment for oil, raising prospects for demand. U.S. manufacturers grew at the fastest pace in almost three years, with the Institute for Supply Management’s manufacturing index rising to 57.8% in June from 54.9%. Still, some analysts say last week’s U.S. output data are hardly compelling as activity was impacted by a tropical storm in the Gulf of Mexico.
Traders and investors are also eyeing the continuing fracas between Qatar and fellow Arab States. On Monday, the Saudi press agency says the kingdom-led bloc has given Qatar two more days—until Wednesday—to comply to the group’s demands. Qatar remains defiant that it isn’t aiding Iran-based terrorism movements, as alleged by the bloc. Even though the quarrel will likely remain on verbal and political levels, an escalation of tensions could yet jeopardize the OPEC deal, said Stuart Ive at OM Financial. The cartel’s output agreement will end after the first quarter of next year.
Have a great day,
Loren R. Bailey, Founder & Owner
FUEL MANAGER SERVICES INC
“Serving the Trucking Industry Since 1992”