Fueling Strategy: Please fill as needed tonight, look for a small bump in wholesale prices of 1/2 cent Wednesday – Be Safe Tonight

NYMEX Crude $ 45.76 UP $.6400
NY Harbor ULSD $1.4763 UP $.0227
NYMEX Gasoline $1.5183 UP $.0176

NEWS
Oil climbed Tuesday, as a lower 2018 forecast on U.S. crude production and speculation of possible output curbs in Libya and Nigeria fueled the strongest session gain for prices in over a week. Expectations for a second-consecutive weekly decline in U.S. crude supplies also provided support.

August West Texas Intermediate crude rose 64 cents, or 1.4%, to settle at $45.04 a barrel on the New York Mercantile Exchange. That was the largest dollar and percentage gain since July 3, FactSet data show. September Brent crude on ICE Futures Europe added 64 cents, or 1.4%, to $47.52 a barrel.

In a monthly report issued Tuesday, the U.S. Energy Information Administration lowered its WTI and Brent oil-price forecasts for this year and next and cut its 2018 U.S. production forecast by 1% to 9.90 million barrels a day. Still, on an annual basis, 2018 domestic production remains on track to reach a record high. Earlier Tuesday, Enrico Chiorando, a U.K.-based analyst at energy consultancy Love Energy, noted that “investors remain cautious, with several banks cutting their forecasts” on oil.

The Organization of the Petroleum Exporting Countries “faces overwhelming pressure” to curb global supplies, “possibly by bringing Libya and Nigeria, which have been exempt from production cuts, into the fold,” Chiorando said. Oil prices fell roughly 4% last week, but saw a tepid recovery Monday, boosted by news that OPEC could pressure Nigeria and Libya to curb their oil production, which has been on the rise. Both are members of OPEC but exempt from the group-led agreement to cut global output by 2%. The exemption was meant to allow their production to rebound following years of fighting between the countries’ governments and local insurgents. Libya and Nigeria have been invited to attend a meeting of OPEC’s monitoring panel on July 24 in Moscow. Traders and analysts were also looking ahead to monthly oil reports from OPEC and the International Energy Agency, to be released Wednesday and Thursday, respectively.

The American Petroleum Institute’s weekly U.S. petroleum supplies data will be released later Tuesday. Separately, the EIA’s weekly supply report will be released Wednesday. Analysts polled by S&P Global Platts expect the government agency to report a decline of 2.6 million barrels in crude supplies for the week ended July 7. Inventories had dropped by more than 6 million barrels the previous week. The S&P Global Platts survey also calls for an increase of 400,000 barrels for gasoline stocks, and a rise of 1.2 million barrels for distillates.

“Weather forecast revisions have continued to lean bullish over the past 48 hours, with expectations for above average temperatures across the Midwest and western U.S., as well as parts of the east coast, all expected to boost cooling demand and connected gas power burn,” said Robbie Fraser, commodity analyst at Schneider Electric.

Have a great day,

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