Fueling Strategy: Partial fill “only” tonight, Friday AM wholesale prices will drop 5 cents – Be Safe Today!

NYMEX Crude $ 45.68 UP $.9300
NY Harbor ULSD $1.4064 UP $.0255
NYMEX Gasoline $1.4140 UP $.0356

NEWS
Oil futures settled higher on Thursday to recoup nearly half of what they lost a day earlier, as traders held out hope that the recent price declines will help keep crude production at bay.

The dollar-denominated commodity also got an added boost after the Bank of England’s surprise decision to leave its key interest rate at a record low lifted the British pound putting some pressure on the U.S. dollar.

August West Texas Intermediate crude rose 93 cents, or 2.1%, to settle at $45.68 a barrel on the New York Mercantile Exchange. Week to date, it has gained about 0.6% but was down nearly 6% for the month so far. September Brent crude on London’s ICE Futures exchange rose $1.11, or 2.4%, to end at $47.37 a barrel.

The U.K.’s decision to leave the European Union, also known as Brexit, has “weighed on oil prices of late, but may also serve to extend the lag under which oil producers intensify drilling activity, setting the stage for tighter supply conditions in 2017,” said analysts at RBC Capital Markets in a note dated Thursday. But prices of oil slumped to a two-month low Wednesday as traders were spooked by U.S. data showing a weekly rise in output and sizable gains in gasoline and distillate stockpiles.

Adding to the negative view on refined products, total U.S. four-week average product demand growth was less robust than seen previously, said Michael Wittners, an energy analyst at Société Générale. “It is mid-July, but the global oil markets are starting to look ahead to September, when seasonal weakness will begin in crude demand, due to planned refinery maintenance, and product demand, due to the end of peak driving season,” he said.

Meanwhile, the International Energy Agency in its report released Wednesday said “restrained by the ongoing downturn in the Chinese economy, demand stuttered severely in May,” rising by just over 1% on the year earlier. The slowdown in demand growth comes at a time when global inventories of crude oil and refined products held by developed nations are at a record high, the IEA pointed out, saying the large inventories remain “a major dampener on oil prices.”

In its Thursday note, however, RBC Capital Markets raised its outlook on Brent to $47 from a prior forecast of $43 in 2016, and for 2017 to $62 from $60. For WTI, it raised estimates to $45 for this year, and $59 next year. For 2018, it introduced forecasts on Brent at $68 and WTI at $65. “The global oil market appears to have re-established balance in the second quarter of 2016 amid outages in Canada’s oil sands and Nigeria, and firmer demand conditions—and has begun the heavy lifting exercise of chipping away at the inventory overhang,” the RBC analysts said. Still, “there is plenty of wood to chop when it comes to (implied) oil inventory builds that we peg at nearly 1 billion barrels since the beginning of 2014.”