Fueling Strategy: Please partial fill only tonight due to Saturday AM wholesale prices will drop 1.5 cents – Be Safe Tonight
NYMEX Crude $ 47.66 DN $.7000
NY Harbor ULSD $1.4848 DN $.0169
NYMEX Gasoline $1.5771 DN $.0243
NEWS
Oil ended Friday at its lowest level in more than three weeks, with futures suffering the largest weekly loss in a month as rising U.S. production and President Trump’s withdrawal from the Paris Climate Accord added to fears of a persistent supply glut.
On the New York Mercantile Exchange, July West Texas Intermediate crude slid 70 cents, or 1.5%, to settle at $47.66 a barrel, for its lowest close since May 10, according to Fact Set data. It lost 4.3% for the week, which was the largest weekly decline since the week ended May 5. August Brent the global benchmark, declined by 68 cents, or 1.3%, to $49.95 on ICE Futures Europe—with the contract down roughly 4.9% for the week.
The declines for oil follows Trump’s announcement Thursday withdrawing the U.S. from the landmark Paris Climate Accord, compounding concerns around a continuing global glut in supply, said Enrico Chiorando, a U.K.-based analyst at energy consultancy Love Energy. “With around half of the cuts from OPEC so far being offset by the rise in U.S. production, this latest development threatens yet more support for the U.S. shale sector, further delaying the process of rebalancing the market,” Chiorando said. “However, even with the continued growth in U.S. production, there are signs that the market is beginning to tighten,” he said. “It could be that [Friday’s] fall is more of a knee-jerk reaction to Trump’s radical withdrawal from the Paris Accord, and we may see some correction in the coming days.”
Oil prices have been under pressure because output for years has outstripped demand and created a global supply glut. An output agreement between the Organization of the Petroleum Exporting Countries and other major producers has only recently started to slow the build in global inventories. But at the same time, it incentivized U.S. producers to ramp up output.
The U.S., as a low-cost producer, is likely “to steadily increase its global market share of oil production and eventually make [it] a net oil exporter,” said Jay Hatfield, portfolio manager of InfraCap’s MLP exchange-traded fund For last week, however, a report from the Energy Information Administration Thursday showed strong weekly drawdowns for both crude and gasoline inventories. Those, however, were “countered by another increase to total U.S. crude production, along with a significant rise in refinery activity that could signal further oversupply ahead for refined products,” said Robbie Fraser, commodity analyst at Schneider Electric. In its rig-count report issued Friday, Baker Hughes said the number of active U.S. rigs drilling for oil climbed by 11 to 733 rigs this week. That was the 20th straight weekly rise, a stretch spanning roughly five months, pointing to further gains in oil production.
The Friday weakness in crude added to the sharp drop seen last week, when disappointment that OPEC didn’t deepen the agreed production cuts drove prices firmly lower.
Have a great day,
Loren R. Bailey, Founder & Owner
FUEL MANAGER SERVICES INC
“Serving the Trucking Industry Since 1992”