Fueling Strategy: Please fill as needed today/tonight – Be Safe
NYMEX Crude $ 46.43 UP $.2100
NY Harbor ULSD $1.4556 UP $.0190
NYMEX Gasoline $1.5178 UP $.0132
NEWS
Oil futures tilted higher Monday, staging a modest rebound after last week’s sharp losses, as comments from major producers hint at a possible extension in crude-output cuts beyond this year.
Prices for West Texas Intermediate crude had climbed to around $47 a barrel after Saudi Arabia’s oil minister said a deal to cut production could be extended into 2018. The election of Emmanuel Macron, a pro-free trade centrist, as France’s next president also helped to assuage concerns that the European economy may see further headwinds.
June WTI crude tacked on 21 cents, or 0.5%, to settle at $46.43 a barrel on the New York Mercantile Exchange, after losing more than 6% last week. July Brent on London’s ICE Futures exchange rose 24 cents, or 0.5%, to $49.34 a barrel. Both crude benchmarks settled Friday at their lowest levels since late November.
Saudi Arabia’s oil minister Khalid Al-Falih said on Monday at the Asia Oil and Gas Conference in Kuala Lumpur that he’s confident the deal to limit production will be extended into second half of the year, and possibly into next year as well, according to media reports. Reuters, citing on industry source, reported that members of the Organization of the Petroleum Exporting Countries are discussing the possibility of extending the output curbs until the end of the first quarter of 2018.
OPEC plans to make a decision on whether to extend the production-cut agreement at its next meeting in Vienna on May 25. The current agreement by OPEC and some major non-OPEC producers to slash output by 1.8 million barrels a day, led came into effect on Jan. 1 and is slated to run until the end of June. Following the steep decline for prices last week, OPEC has “responded as expected,” with Saudi Arabia, as well as non-OPEC Russia, signaling potential cuts into 2018, said Robbie Fraser, commodity analyst at Schneider Electric. “However, OPEC’s ability to talk prices higher remains decidedly limited, particularly as the current production deal continues to encourage U.S. oil output growth,” he said.
Data from Baker Hughes Friday showed an increase in the number of active U.S. rigs drilling for oil, the 16th week in a row—implying that output is set to continue its climb.
“As OPEC prepares to meet later this month to formalize a potential extension, expect U.S. oil production to continue charting steady gains,” said Fraser.
The closely watched monthly U.S. Energy Information Administration short-term energy outlook is due Tuesday. “The market is anticipating the EIA to raise its U.S. oil production projections again and if confirmed, it would be very bearish to sentiment,” said Vivek Dhar, a commodities strategist at the Commonwealth Bank of Australia. Last month, the U.S. government raised their crude output estimates for this year to 9.2 million barrels a day and to 9.9 million barrels a day in 2018.
Have a great day,
Loren R. Bailey, President
FUEL MANAGER SERVICES INC
“Serving the Trucking Industry Since 1992”