Fueling Strategy: Please fill as needed today, Saturday AM wholesale prices will go up slightly = Be Safe Tonight

NYMEX Crude $ 50.60 UP $.2500
NY Harbor ULSD $1.5736 UP $.0154
NYMEX Gasoline $1.7001 UP $.0189

NEWS
Oil futures settled higher Friday, with U.S. prices holding ground at a more than three-week high, but still logging a loss of almost 6% for the first quarter. Traders questioned the sustainability of the OPEC-led production cut agreement and prospects for U.S. output growth.

West Texas Intermediate crude futures gained roughly 5% in the previous three sessions after prices last week hit their lowest levels since before the pact between the Organization of the Petroleum Exporting Countries and other heavyweight producers such as Russia. May WTI crude rose 25 cents, or 0.5%, to settle at a more than three-week high of $50.60 a barrel on the New York Mercantile Exchange. Prices, based on the settlement of the front-month contract finish at $53.72 on Dec. 30, finished about 5.8% lower for the first quarter and year to date. They’re down more than 6% for the month, but up about 5.5% for the week, according to FactSet data.

May Brent oil on London’s ICE Futures exchange fell by 13 cents, or 0.3%, to $52.83 a barrel, after a volatile trading session that ended with the contract’s expiration. Compared with the settlement of $56.63 for the front-month contract at the end of last year, prices have lost about 6.7% for the quarter. The June contract ended at $53.53, up 40 cents, or 0.8%.

“The largest bearish factor over the first quarter has been noncompliance from producers subject to the OPEC agreement,” said Troy Vincent, an oil analyst at ClipperData. “Our export data continue to show volumes hold up from key global suppliers like Saudi Arabia, Venezuela and Iraq,” he said. “This will continue to be the hottest topic heading into Q2, as an extension of OPEC’s agreement will likely grow further scrutiny given how little supposed production cuts have filtered through to global waterborne supply.” There has been a 94% compliance rate from OPEC members, but doubts on the effectiveness and sustainability of the deal kept prices in a narrow range for much of the year before the breakdown earlier in March. “Throughout Q1, crude inventories in the U.S. continued to climb, which started to raise concerns about the impact of the OPEC cuts,” said Mark Watkins, regional investment manager at the Private Client Group at U.S. Bank in Utah. “March hit the oil markets like a lion, with WTI falling approximately $5 dollars a barrel.”

On Friday, Baker Hughes reported that the number of active U.S. oil rigs, which offers an indication of oil activity, rose by 10 to 662 this week. The oil-rig count has risen every week this year but one.

Still, increasingly supportive rhetoric from OPEC nations to extend the cuts into latter part of 2017 has helped brighten market sentiment. OPEC is expected to announced it’s decision at its May 25 meeting. “In Q2, it will be important for OPEC to continue to comply with their stated quota numbers and extend the agreement past the June expiration date,” said Watkins.