Fueling Strategy: Please fill as needed tonight – Be Safe

NYMEX Crude $ 44.40 UP $.1700
NY Harbor ULSD $1.4536 UP $.0054
NYMEX Gasoline $1.5007 UP $.0023

NEWS
Oil ended modestly higher Monday as news that Libya and Nigeria have been invited to join OPEC’s meeting with other major producers later this month provided support to futures prices, which suffered from a drop of nearly 4% last week.

The two countries had been exempted from the pact among major oil producers, led by the Organization of the Petroleum Exporting Countries, to limit global production and ease a glut of oil that has plagued the industry. “The belief is that rising Libyan and Nigerian output are undermining both the efforts at rebalancing the market and the unity of the OPEC/non-OPEC coalition,” Michael Lynch, president of president of Strategic Energy & Economic Research, told MarketWatch. “Whether the group can extract more than some promises [from Libya and Nigeria] remains doubtful at this point,” he said. “But it is also doubtful whether Nigeria and Libya can continue growing” their production.

On the New York Mercantile Exchange, August West Texas Intermediate crude tacked on 17 cents, or 0.4%, to settle at $44.40 a barrel, after tapping a low of $43.65. September Brent on London’s ICE Futures exchange, also added 17 cents, or 0.4%, to $46.88.

Prices for WTI and Brent settled Friday at their lowest levels since June 26, according to FactSet data. Late last week, oil reversed much of the gains seen during the two-week rally from late June, losing nearly 3% on Friday alone, as global oil output remained robust though demand was flat, leaving inventories near historic highs.

Providing some support for oil prices, however, OPEC is considering putting a cap on how much oil members Nigeria and Libya can pump, cartel delegates said. “It’s quite remarkable how the supply cut exemptions from some OPEC members have come back to punish the cartel, as production in June climbed to the highest level so far in 2017,” said Lukman Otunuga, research analyst at FXTM, in a daily note. “With the increasing output from Nigeria and Libya threatening to disrupt the efforts made by the rest of the group to rebalance the markets and not being something that was priced in, the price of oil could remain under pressure.” Libya’s crude-oil output has surged to more than one million barrels a day, up from 400,000 in October, while Nigeria’s output has risen to 1.6 million barrels a day, up from 200,000 barrels a day in October, according to JBC, a Vienna-based energy-industry consultancy. The two OPEC members have now been invited to a meeting of major oil producers that’s planned for July 24 in Russia, according to The Wall Street Journal Monday. The story cited comments from Kuwait’s oil minister on the sidelines of an Istanbul oil conference.

Still, the main point of concern for investors is rising U.S. production. Data from the U.S. Energy Information Administration showed U.S. production increasing to nearly 9.34 million barrels a day last week, up from 9.25 million barrels a day the week prior. Production was up nearly 11% from a year ago and nearly back at its 10-month high. Friday’s updated rig count from Baker Hughes Inc. also point to production increases. Oil producers added seven more rigs to their working fleet, rising to 763, up more than double from the 351 at work a year ago.

Have a great day,

Loren R. Bailey, Founder & Owner
FUEL MANAGER SERVICES INC
“Serving the Trucking Industry Since 1992”