Fueling Strategy: Please keep tanks topped tonight, Friday AM wholesale prices will jump UP 2.5 cents – Please be safe tonight!
NYMEX Crude $ 50.35 UP $.8400
NY Harbor ULSD $1.5582 UP $.0157
NYMEX Gasoline $1.6812 UP $.0092
NEWS
Oil prices rose for a third straight session Thursday, with U.S. benchmark crude topping $50 a barrel to finish at a more than three-week high. Larger-than-expected drawdowns in U.S. petroleum-product stockpiles and gains in refinery activity raised expectations of stronger demand for crude. Growing expectations that the Organization of the Petroleum Exporting Countries would agree to extend its production-cut agreement also contributed to oil’s price climb. Natural-gas prices, meanwhile, extended earlier declines after a weekly decline in domestic inventories of the fuel was in line with market expectations.
On the New York Mercantile Exchange, West Texas Intermediate crude for May delivery added 84 cents, or 1.7%, to settle at $50.35 a barrel. Prices settle at their highest level since March 7, according to FactSet data. May Brent crude on London’s ICE Futures exchange rose 54 cents, or 1%, to $52.96, with the contract set to expire at Friday’s settlement. Both WTI and Brent trade more than 6% lower year to date, according to FactSet data.
Data from the U.S. Energy Information Administration released Wednesday revealed an increase in domestic-crude supplies to another record, but also showed larger-than-expected declines in gasoline and distillate supplies and refiners processing oil at a higher rate. “Underpinning the U.S. inventory numbers was a turn in the industrial data, indicating the seasonal ramp in refiner capacity is accelerating,” said Chris Kettenmann, chief energy strategist at Macro Risk Advisors. “This is supportive of total crude-product drawdowns and, at the margin, should help alleviate the inventory overhang on crude oil and related energy securities.”
On Nymex Thursday, April gasoline nearly a penny, or 0.6%, to $1.681 a gallon, while April heating oil rose 1.6 cents, or 1%, to $1.558 a gallon. The April contracts expire at the end of Friday’s session.
The strong uptrend in U.S. crude production, meanwhile, is keeping investors from placing bullish bets. Data showed that despite the recent pullback in prices, domestic output rose for a fifth-straight week. JBC Energy said given that prices have been bobbing in a narrow range, the growth in U.S. oil-drilling activity seen so far this year may lose steam over the next few months. But that doesn’t mean less production because new rigs are much-more efficient as they can drill more oil in less time. This comes as the market awaits word on whether recent production cuts led by OPEC will be extended beyond the initial six-month term when the cartel meets to review the pact at the end of May.
Elsewhere in the energy market, prices for natural gas extended their decline after the EIA Thursday reported that U.S. natural-gas supplies fell by 43 billion cubic feet for the week ended March 24. That matched the decline expected by analysts polled by S&P Global Platts.