Fueling Strategy: Please keep tanks topped tonight, Friday AM wholesale prices will go back up 2 cents – Be Safe Today!!

NYMEX Crude $ 45.14 DN $2.2900
NY Harbor ULSD $1.4106 DN $0.0605
NYMEX Gasoline $1.3631 DN $0.0698

NEWS
Oil futures dropped by nearly 5% Thursday to settle at their lowest level in two months after U.S. government data showed a smaller-than-expected weekly decline in crude-oil inventories.

That, combined with ongoing worries about a potential slowdown in energy demand, pulled prices sharply lower even though the data also revealed a seventh-straight weekly fall for crude stockpiles and a sizable drop in daily domestic oil production. Natural-gas futures, meanwhile, tracked oil’s move lower. They pulled back from an earlier rally fueled by a weekly climb in U.S. supplies that came in under market expectations and was roughly half the average increase for this time of year.

August West Texas Intermediate crude fell $2.29, or 4.8%, to settle at $45.14 a barrel on the New York Mercantile Exchange, after climbing 1.8% a day earlier. Prices, which were trading at $47.85 before the supply data, saw their lowest finish since May 10, according to FactSet. Brent crude lost $2.40, or 4.9%, to $46.40 a barrel on London’s ICE Futures exchange, also ending at a two-month low.

The U.S. Energy Information Administration reported Thursday that domestic crude supplies declined by 2.2 million barrels for the week ended July 1. The fall paled in comparison with the 6.7 million-barrel drop reported by the American Petroleum Institute said late Wednesday. Analysts polled by S&P Global Platts expected a larger fall of 2.6 million barrels. The data were delayed by a day following the Independence Day holiday on Monday. “Once again, the API set up the EIA for disappointment,” said Tyler Richey, co-editor of The 7:00’s Report told MarketWatch. Oil prices fell even though the report also showed that total domestic production declined by 194,000 barrels a day to 8.428 million barrels a day in the latest week. The decline appears to be the largest pullback in total weekly U.S. output since the week ending Oct. 11, 2013, according to Richey. “This is a mildly supportive underlying development, but zooming out to the longer-term production trends, the pace of U.S. output declines is still largely continuing to moderate so far in 2016,” he said. That’s “bearish as the U.S. is the world’s de facto swing producer, while [the Organization of the Petroleum Exporting Countries] continues to practice a ‘full throttle’ production policy.” Gasoline supplies edged down by 100,000 barrels, while distillate stockpiles fell 1.6 million barrels last week, according to the EIA.

August gasoline fell 7 cents, or 4.9%, to $1.363 a gallon, while August heating oil declined by 6.1 cents, or 4.1%, to $1.411 a gallon. James Williams, energy economist at WTRG Economics, pointed out “gasoline consumption is still higher than last year, so [data were] bullish across the board with the strongest signal [coming] from the production data.” The EIA said that over the last four weeks, motor gasoline product supplied was up 2.5% from the same time a year ago. But oil remains vulnerable to further price declines as the market continues to digest news of the U.K.’s plan to leave the European Union. Dollar-priced commodities are also suffering from a stronger U.S. currency, with the ICE U.S. Dollar Index rising over 2% since the U.K. referendum. The recent weakness in currencies in Britain, the eurozone and China could dampen their demand for oil. And The Wall Street Journal reported that Royal Dutch Shell plans to resume exports from a 200,000 barrels-per-day Nigerian terminal following the reopening of a pipeline that was shut down in May.