Fueling Strategy: Please top your tank tonight, wholesale prices are down 2.5 cents, Thursday AM look for a small bump up of less than one penny – Be Safe Today

NYMEX Crude $ 45.72 DN $2.4700
NY Harbor ULSD $1.4162 DN $0.0500
NYMEX Gasoline $1.4913 DN $0.0632

NEWS
Oil prices settled to their lowest level in about a month Wednesday after data showed that U.S. crude stockpiles unexpectedly climbed for the first time in nine weeks.

July West Texas Intermediate crude fell $2.47, or 5.1%, to settle at $45.72 a barrel on the New York Mercantile Exchange—the lowest finish for a most-active contract since May 4, according to FactSet data. The Nymex settlement was later than usual on Wednesday, with a CME spokesman citing a “technical issue that delayed dissemination” of the WTI settlement prices. August Brent crude on the ICE Futures Europe exchange shed $2.06, or 4.1%, to $48.06 a barrel. That was the lowest finish for a most-active Brent contract since late November.

Early Wednesday, the U.S. Energy Information Administration reported that domestic crude supplies rose by 3.3 million barrels for the week ended June 2. The unexpected rise followed eight consecutive weeks of declines. The American Petroleum Institute late Tuesday had reported a drop of 4.6 million barrels, while analysts polled by S&P Global Platts forecast a fall of 3.5 million barrels. “A combination of a drop in refinery runs, rising imports and a shifting of crude from the [Strategic Petroleum Reserve] into commercial inventories, has yielded a surprise build to crude inventories,” said Matt Smith, director of commodity research at ClipperData. “Despite the drop in refining activity, lower implied demand for the products has meant we have seen a full house of bearish builds.”

Gasoline stockpiles also climbed by 3.3 million barrels, while distillate stockpiles were up 4.4 million barrels last week, according to the EIA.

On Nymex, July gasoline fell 6.3 cents, or 4.1%, to $1.491 a gallon, while July heating oil lost 5 cents, or 3.4%, to $1.416 a gallon. Both products finished at their lowest levels since early May. Meanwhile, natural-gas futures fell after a 2% gain a day earlier, as the market braced for weekly U.S. supply data Thursday. July natural gas ended at $3.02 per million British thermal units, down 2.2 cents, or 0.7%.

Crude production last week edged lower, with total output down 24,000 barrels a day to 9.318 million barrels, the EIA data Wednesday showed. However, in a monthly report issued Tuesday, the EIA said it expects U.S. crude production in 2018 to average 10 million barrels a day, exceeding the previous annual record of 9.6 million barrels a day in 1970. Strong production out of the U.S. has been the main challenge facing the Organization of the Petroleum Exporting Countries, which together with a handful of non-cartel producers such as Russia, have pledged to reduce their output by 1.8 million barrels through March. OPEC’s own rising production has also weighed on prices. Despite the reported high level of compliance to the cut deal, the cartel’s output likely rose by 270,000 barrels a day in May to 32.12 million, according to S&P Global Platts. Meanwhile in the Middle East, investors continued to keep an eye on the diplomatic rift between Qatar and neighboring Persian Gulf countries.

Have a great day,

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