Fueling Strategy: Please fill as needed tonight – Be Safe Today

NYMEX Crude $ 48.84 UP $.4900
NY Harbor ULSD $1.4878 DN $.0194
NYMEX Gasoline $1.5272 DN $.0209

NEWS
Oil prices logged their lowest finish in about five weeks Monday, on concerns that rising U.S. crude output would offset efforts by OPEC and other large crude producers to cap a nagging global oil glut.

The price drop extends a downbeat tone in crude trade into May after futures contracts registered a second straight monthly decline. June West Texas Intermediate crude fell 49 cents, or 1%, to settle at $48.84 a barrel on the New York Mercantile Exchange. WTI prices lost about 2.5% in April. July Brent on London’s ICE Futures exchange declined by 53 cents, or 1%, to $51.52 a barrel.

Both crude benchmark settled at their lowest settlements for a most-active contract since March 28, according to FactSet data. “With the future of OPEC policy unclear, the trend of rising U.S. production remains the single biggest headwind for oil prices in the medium term,” said Tyler Richey, co-editor of the Sevens Report.

Analysts noted skepticism that any extension of global production cuts at current levels would be enough to move global inventories to more normalized levels. The Organization of the Petroleum Exporting Countries, which agreed late last year with other big global exporters to curtail global production by about 1.8 million barrels a day, is expected to make a decision May 25 on whether to extend the pact. “An extension would be mildly supportive of oil, but because of the recent rise in U.S. production, the effect of OPEC policy on global inventories has been limited and deeper cuts to member production are likely needed to really ignite a rally through the mid $50 [a] barrel level,” said Richey.

On Friday, data from Baker Hughes showed a rise in active U.S. oil rigs for a 15th week in a row, implying that further gains in domestic production could be ahead.

OPEC Secretary-General Mohammed Barkindo, in weekend comments, suggested the supply cuts have had some success, with U.S. inventories falling for the past three weeks, while global inventories increased less than normal during the first quarter, reported ANZ Research. The recovery in Libyan oil production is also weighing on sentiment, said Tim Evans, energy analyst at Citi Futures, in a note. “Like the recovery in U.S. shale oil production, any sustained recovery in Libyan and/or Nigerian production limits the impact of the OPEC-led production cuts.”

Have a great day,

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