Fueling Strategy: Please keep tanks topped tonight, Thursday AM wholesale prices will jump UP 5 cents – Be Safe Today!!

NYMEX Crude $ 44.75 DN $2.0500
NY Harbor ULSD $1.3809 DN $0.0823
NYMEX Gasoline $1.3784 DN $0.0517

NEWS
Oil futures fell more than 4% Wednesday, giving up just about all of their gains from a day earlier, after a government report revealed that U.S. output edged higher in the latest week, and supplies of gasoline and distillates saw sizable gains.

The report from the Energy Information Administration also showed that crude stockpiles fell a bit less than some analysts expected. August West Texas Intermediate crude dropped $2.05, or 4.4%, to settle at $44.75 a barrel on the New York Mercantile Exchange, after rallying by 4.6% a day earlier. It was trading at around $46.25 before Wednesday’s EIA supply data. September Brent crude slid $2.21, or 4.6%, to end at $46.26 a barrel—the lowest finish since mid-May.

Early Wednesday, the EIA reported U.S. crude supplies fell by 2.5 million barrels for the week ended July 8. That was in contrast to the 2.2 million-barrel climb reported by the American Petroleum Institute late Tuesday, and less than the decline of 3.25 million barrels expected by analysts polled by S&P Global Platts. The EIA figures also showed that total domestic production, which includes Alaska, climbed by 57,000 barrels a day to 8.485 million barrels a day, though stocks in the lower 48 states edged down by 14,000 barrels to 8.074 million barrels a day. Gasoline supplies rose 1.2 million barrels, while distillate stockpiles jumped by 4.1 million barrels last week, according to the EIA. Analysts polled by Platts looked for a fall of 125,000 barrels for gasoline and a rise of 375,000 barrels for distillates. “In the peak of summer driving season, we normally see a draw in gasoline,” said Tariq Zahir, a managing member at Tyche Capital Advisors. “To see a build there this week was very surprising and [heating oil saw] a much larger build than expected.” As for distillates, which include heating oil and diesel, stockpiles of the product rose “despite a small decline in refinery utilization,” said James Williams, energy economist at WTRG Economics. Refiners are “putting out a higher percentage of diesel because the refiner margin is higher than gasoline.”

On Wednesday, the August contract for heating oil fell 8.2 cents, or 5.6%, to $1.381 a gallon, but ended above the $1.378-a-gallon price for August gasoline which lost 5.2 cents, or 3.6%, for the session.

Looking forward, Zahir said the crude-product markets are likely to lead the way to lower oil prices. The return of Canadian and Nigerian oil to the market and additional strength in the U.S. dollar may also put pressure on prices, said Zahir. “The overall picture we see is lower prices ahead, especially since we have seen U.S. rig counts build in 5 out of the last 6 weeks. Separately, the International Energy Agency said Wednesday that global oil markets have undergone an “extraordinary transformation,” but that record high oil stocksthreaten the recent stability in prices. “We may well see crude-oil stocks fall back but there is a risk that, unless demand turns out to be stronger than we currently anticipate, products stocks could rise still further and threaten the whole price structure,” the agency said.

In China, crude imports hit a five-month low in June of 30.62 million tons, or around 7.5 million barrels a day, according to preliminary data from the General Administration of Customs.