Fueling Strategy: Please partial fill only today, Wednesday wholesale prices will drop 2 cents – Be Safe Tonight!
NYMEX Crude $ 44.65 DN $.5900
NY Harbor ULSD $1.3841 UP $.0063
NYMEX Gasoline $1.3757 DN $.0115
NEWS
Oil futures fell Tuesday, with the U.S. benchmark settling at a 10-week low.
Traders fretted over ample inventories of crude and petroleum products and the potential for a slowdown in energy demand on the back of a lower global economic outlook from the International Monetary Fund. August West Texas Intermediate crude fell 59 cents, or 1.3%, to settle at $44.65 a barrel on the New York Mercantile Exchange, after losing 1.6% a day earlier. That’s the lowest close since May 9. The August WTI contract expires at Wednesday’s settlement, which often fuels trading volatility. September Brent crude on London’s ICE Futures exchange fell 30 cents, or 0.6%, to end at $46.66 a barrel.
“With the post-Brexit and now Turkey’s failed coup weighing on demand expectations, supplies look a lot larger,” said Phil Flynn, senior market analyst at Price Futures Group. The U.K.’s decision last month to exit the European Union had sparked worries that the economies in Europe would suffer—and on Tuesday, the IMF cut its global economic outlook for both 2016 and 2017, citing increased uncertainty caused by the decision.
Oil futures fell Monday after it was confirmed the attempted coup in Turkey over the weekend didn’t impede the flow of oil and natural gas. Any supply disruptions in the currently well-supplied market would have been taken as welcome relief to the current glut.
A mismatch in supply and demand has haunted oil prices for two years, dragging prices sharply down from above $100 per barrel in mid-2014. Even though prices have risen since hitting $25 a barrel in February, the gain hasn’t been fast enough to tighten the market amid sagging demand. There is also growing anxiety that the recent rise in prices is prompting some U.S. shale producers to crank up output, a view underscored by the steady, albeit marginal, increase in the number of active rigs digging for oil in the U.S. in the past six out of seven weeks. Troy Vincent, oil analyst at ClipperData, said he expects U.S. production to bottom next month as “offshore production continues to offset marginal losses from shale basins.” “This outlook for domestic production, coupled with our outlook for slowing Chinese crude demand and the growing trend of a crude-glut-turned-product-glut that has depressed gasoline crack spreads should serve to keep market balance at bay into 2017,” he said.
A monthly report from the Energy Information Administration released Monday showed that oil output from seven major U.S. shale plays is forecast to decline by 99,000 barrels a day to 4.55 million barrels a day in August from July, but that was smaller than the forecast decline of 118,000 barrels in July from June. For the week ended July 15, S&P Global Platts estimates U.S. crude stocks to have fallen 1.25 million barrels. The decrease, if confirmed by EIA data on Wednesday, will mark the eighth consecutive weekly contraction. The American Petroleum Institute will release its own weekly data on petroleum supplies late Tuesday. S&P Global Platts also tips a drop of 625,000 barrels in gasoline stocks and 875,000 barrels decrease in distillate stocks in the same week. Despite the fall in product stocks, inventories remains elevated and weaker margins have already driven some refiners to reduce their refining rate, the firm said.
AAA on Monday reported that the national average for regular gasoline at the retail level has fallen for 35 out of 36 days to $2.21 a gallon, which was the lowest mark for this time of year since 2004. It attributed the price declines to “abundant fuel supplies and declining crude-oil costs.”