Fueling Strategy: Wholesale prices are down 3.5 cents so please keep tanks topped today/tonight, Saturday AM look for a small move upward in wholesale markets – Be Safe
NYMEX Crude $ 44.23 DN $1.2900
NY Harbor ULSD $1.4482 DN $0.0337
NYMEX Gasoline $1.4984 DN $0.0303
NEWS
Oil prices ended sharply lower Friday to tally a loss of nearly 4% for the week, as a rise in U.S. crude production and a weekly climb in oil rigs provoked concerns that OPEC-led efforts to bring balance the market are doomed.
The number of active U.S. oil rigs climbed by 7 to 763 rigs this week, according to data from Baker Hughes released Friday. The data contradicted some expectations that the rig count would continue to fall, following the previous week’s retreat, which marked the first decline since January. That combined with the weekly rise in total U.S. crude production reported by U.S. Energy Department Administration Thursday to pull benchmark U.S. oil prices toward their lowest finish in nearly two weeks.
August West Texas Intermediate crude tumbled $1.29, or 2.8%, to settle at $44.23 a barrel on the New York Mercantile Exchange. That was the lowest finish since June 26, according to FactSet data. For the week, prices were down roughly 3.9% to mark their sixth such loss in seven weeks. “No surprise that more rigs were added this week, and it would take a prolonged period of $35 to $40 per barrel prices to really put the brakes on this,” Richard Hastings, macro strategist at Seaport Global Securities, told Market Watch.
On Thursday, the EIA reported that crude levels in U.S. storage fell by 6.3 million barrels in the week ended June 30, but total domestic production also edged up by 88,000 barrels to 9.338 million barrels a day. Hastings said the rebound in U.S. crude production last week is a key reason why oil prices headed lower Friday. “Some observers maybe thought the big decline in production in the EIA data two weeks ago was all about low prices ruining the production party,” he said. “That might be the case in a few months from now, assuming we continue to see very low $40s.” But “continued news that auto makers are swapping into EVs and hybrids only, and the news from France regarding the gradual phasing out of internal combustion engines should not be underestimated,” said Hastings.
Globally, bearish dynamics remain in play as world inventories hold above five-year averages, with increased production from countries like the U.S. and Libya offsetting the effects of the cuts lead by the Organization of the Petroleum Exporting Countries. According to a report from The Wall Street Journal, OPEC is considering putting a limit on how much oil members Nigeria and Libya can produce. The news, however, failed to provide a boost to oil prices.
Have a great day,
Loren R. Bailey, Founder & Owner
FUEL MANAGER SERVICES INC
“Serving the Trucking Industry Since 1992”