Fueling Strategy: Please fill as needed tonight – Be Safe

NYMEX Crude $ 46.80 UP $2.0400
NY Harbor ULSD $1.4632 UP $0.0469
NYMEX Gasoline $1.4301 UP $0.0466

NEWS
Oil futures settled higher Tuesday, rebounding from a two-month low as a report from the Organization of the Petroleum Exporting Countries revealed forecasts for higher oil demand and lower production next year.

On the New York Mercantile Exchange, August West Texas Intermediate crude rose $2.04, or 4.6%, to settle at $46.80 a barrel. That was the highest finish since July 6, according to FactSet. September Brent crude gained $2.22, or 4.8%, to $48.47 a barrel on the ICE Futures exchange in London. OPEC said oil output from its members, based on secondary sources, rose 264,000 barrels to 32.86 million barrels a day in June—above the average 31.9 million barrels-per-day demand for OPEC oil in 2016. But the cartel estimated that demand for OPEC-pumped crude will climb to 33 million barrels a day in 2017. “This is in line with the Saudi view that the markets will be in balance sometime in the second half of the year. So, you have to call this a bullish report,” said James Williams, energy economist at WTRG Economics. Non-OPEC oil supplies are also expected to fall by 900,000 barrels a day in 2016 to average 56 million barrels a day, mainly due to lower oil output from Canada in the second quarter due to the wildfire back in May, while non-OPEC oil supply in 2017 is seen down 100,000 barrels a day to 55.9 million barrels a day, the OPEC report said. Still, the market could see additional production from Libya, said Williams. “We have to wait to see whether they will accomplish their stated goal of opening the export terminals within a week.”

The OPEC report also warned that the U.K.’s vote to leave the European Union poses risks to global economic growth and oil demand in Europe. A S&P Global Platts survey on OPEC output out released Monday showed production in conflict-torn countries like Nigeria and Libya are rebounding, prompting an OPEC-output climb to a nearly eight-year high of 32.73 million barrels a day.

Separately, S&P Global Platts reported early Tuesday that China’s apparent oil demand fell by 2.7% to average 10.88 million barrels a day in May, compared with a year earlier. Oil traders will be watching for the weekly U.S. petroleum supply data due from the American Petroleum Institute late Tuesday and the Energy Information Administration early Wednesday. Analysts polled by S&P Global Platts expect crude stocks to have dropped by 3.25 million barrels in the week ended July 8, while gasoline stocks are seen down by 125,000 barrels.

In a monthly report issued Tuesday, the EIA raised its 2016 and 2017 forecasts for WTI and Brent crude prices, but it left its outlooks for U.S. production unchanged. Monthly oil data from the International Energy Agency is due Wednesday.

“I agree with the consensus view that crude oil supply and demand are getting more balanced,” said Tom Kloza, global head of energy analysis at the Oil Price Information Service. But “the greatest risk is that crude becomes more balanced, while gasoline gets sloppy in the autumn, as it always seems to do.”