Fueling Strategy: Please keep tanks topped today/tonight, Saturday AM wholesale prices will go up 1.5 cents then Sunday AM wholesale prices will shoot UP 4 cents – Be Safe Today!
NYMEX Crude $ 35.92 UP $1.3500
NY Harbor ULSD $1.1613 UP $0.0411
NYMEX Gasoline $1.3321 UP $0.0333
NEWS
The U.S. oil benchmark closed at its highest level since early January as traders turned their focus toward signs of falling U.S. production and continued talk of a potential output freeze by other major producers. A drop in the number of active U.S. oil-drilling rigs for the 11th straight week helped cement those gains, with both the U.S. and global benchmark posting weekly advances of more than 9%.
On the New York Mercantile Exchange, April West Texas Intermediate crude added $1.35, or 3.9%, to close at $35.92 a barrel—the highest finish since Jan. 5. For the week, WTI rose 9.6%. May Brent crude the global oil benchmark, added $1.65, or 4.5%, to finish at $38.72 a barrel on London’s ICE Futures exchange. That marked the highest finish since Dec. 10 and a weekly advance of 9.3%.
The number of active rigs drilling for crude in the U.S., viewed as a rough proxy for activity in the oil industry, fell by 8 to 392 rigs as of Friday, according to data from Baker Hughes Inc. The total number of active U.S. drilling rigs fell 13 to 489. The total tally was the lowest since the 488 count recorded on April 23, 1999, which was the lowest number since records began in the late 1940s. The fall in oil rigs “supports the idea that U.S. oil output is going to continue to decline in coming weeks,” said Tyler Richey, co-editor of The 7:00’s Report. While the number of U.S. oil rigs has fallen for 11 weeks straight, oil output hasn’t fallen by as much as some expected because drillers have increased their efficiency and employed new technologies. Still, domestic output has seen a 2.6% year-over-year drop in the week that ended Feb. 26.
Futures also continued to find support on talk of a planned meeting later this month between major oil producers who are expected to discuss a possible freeze in crude production. Ibe Kachikwu, Nigeria’s minister of state for petroleum resources, said Thursday that a meeting will take place on March 20 in Moscow to “fine tune collaborative strategies,” according to a statement from the Nigerian National Petroleum Corp. Big suppliers like Iran, however, have already indicated that they won’t join the freeze plan.
Meanwhile, the Labor Department on Friday showed that the U.S. economy added a more-than-expected 242,000 jobs last month, while the unemployment rate held at 4.9%. “The big demand-growth question marks out there” are in non-Organization for Economic Cooperation and Development countries, while U.S. demand “continues to prove relatively strong and stable,” said Robbie Fraser, commodity analyst at Schneider Electric. Longer term, however, Fraser wasn’t too optimistic. “There’s still the knowledge that this market is…oversupplied with oil, perhaps well into 2017,” he said. “As these various short-term bullish factors are evaluated and placed into context, I would expect the long-term fundamental bearishness of this market to set back in.”