Fueling Strategy: Fill as needed tonight, Friday we’ll see a very small downward move within the wholesale markets – Be Safe Tonight

NYMEX Crude $ 46.08 UP $.5900
NY Harbor ULSD $1.4917 UP $.0180
NYMEX Gasoline $1.5261 UP $.0053

NEWS
Oil tallied a fourth session of gains on Thursday, settling at a nearly two-week high, with prices finding support from the largest weekly decline for U.S. crude inventories in 10 months and a forecast for stronger growth in demand this year. Traders, however, remained wary of recent reports revealing further gains in global production, particularly after the International Energy Agency said global oil supply rose in June as producers “opened the taps.”

August West Texas Intermediate crude tacked on 59 cents, or 1.3%, to settle at $46.08 a barrel on the New York Mercantile Exchange—the highest finish since July 3, according to FactSet data. September Brent crude added 68 cents, or 1.4%, to $48.42 a barrel.

In its monthly oil report issued Thursday, the IEA was “positive on demand growth, raising their 2017 estimates,” said Bill Baruch, chief market strategist at iiTRADER. Meanwhile, U.S. crude stockpiles registered a decline of 7.6 million barrels for the week ended July 7, according to data from the Energy Information Administration Wednesday. That followed a drop of 6.3 million barrels a week earlier. But “major forecasting agencies including the IEA and OPEC have been forced to reset their expected pace of inventory rebalancing,” said Robbie Fraser, commodity analyst at Schneider Electric, in a note. “While demand growth has generally met expectations, the supply side continues to prove worrisome for oil bulls, with U.S. production forcing upward revisions, and OPEC compliance levels falling off in summer.”

The IEA said Thursday that global oil supply in June rose by 720,000 barrels a day to 97.46 million a day as “producers opened the taps,” with the Organization of the Petroleum Exporting Countries and non-OPEC producers, such as the U.S., increasing output.

OPEC output rose by 340,000 barrels a day “after Saudi flows increased and Libya and Nigeria, spared from cuts, pumped at stronger rates,” the IEA said. The two African nations are exempt from the OPEC-led deal to cut oil production as their oil production has been hurt by internal conflicts. Recently, both countries have ramped up production, feared to offset the cuts implemented by the rest of the group. “OPEC compliance slumped to 78%, the lowest rate this year, and was overtaken by the non-OPEC group whose rate improved to 82%,” the IEA said. The report from the Paris-based agency coms a day after OPEC in its monthly report said its members’ combined average daily output rose 1.4% last month to 32.6 million barrels, partly because of rising production from Libya and Nigeria. Many traders and analysts also say most of the agreement’s benefits are being reaped by U.S. producers, who are flooding the market. Of late, there have also been increasing cries to impose an output cap on Nigeria and Libya. Representatives from the two countries have been invited to a meeting of OPEC and other major oil producers in Moscow on July 24 to discuss whether to include the countries in the curtailment plan, cartel delegates have said.

Elsewhere in the energy spectrum, August gasoline added half a penny, or 0.4%, to $1.526 a gallon, while August heating oil rose 1.8 cents, or 1.2%, to $1.492 a gallon.

Have a great day,

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