Fueling Strategy: Please keep tanks filled tonight, Wednesday AM wholesale prices will jump UP 4 cents – Be Safe Tonight!
NYMEX Crude $ 48.31 UP $.5900
NY Harbor ULSD $1.4674 UP $.0273
NYMEX Gasoline $1.6341 UP $.0278
NEWS
Oil futures rose Tuesday for a second straight session, with prices settling at their highest level since early October as traders bet that the recent output disruptions will drawdown the globe’s supply surplus. The market also looked ahead to data on U.S. crude inventories, which is expected to show a weekly decline. June West Texas Intermediate crude rose by 59 cents, or 1.2%, to settle at $48.31 a barrel on the New York Mercantile Exchange — the highest settlement for futures prices since Oct. 9. July Brent ended at $49.28 a barrel on London’s ICE Futures exchange, up 31 cents, or 0.6%.
Supply outages continue to be the key short-term driver for the crude complex, with Canadian and Nigerian production still facing difficulty,” said Robbie Fraser, commodity analyst at Schneider Electric. “The combination of those outages alongside stronger than expected demand growth, particularly from China, has at least temporarily removed excess supply from the market,” he said.
The biggest support for oil prices has been supply disruption caused by continued productions outages in Nigeria and Canada. Analysts believe that continued sabotage to Nigeria’s oil infrastructure means that the West African nation is now producing about 1 million barrels a day, down 1.2 million barrels a day from its 2015 average. Canadian production has been hit by wild fires in the country’s oil rich Albertan province. The area saw fresh evacuations late Monday and threatened to further delay the restart of at least one million barrels a day in oil-sands output.
The think-tank Energy Aspects has forecast that disruptions will account for an average of 3.2 million barrels a day of global production being lost from the market this month. Over in the U.S. Tuesday, the Energy Information Administration released part of its Annual Energy Outlook report. It projects a drop in domestic oil output to 8.6 million barrels a day in 2017, from 9.4 million barrels a day in 2015, mainly because of a decline in prices. Production would then likely grow through 2040 to reach 11.3 million barrels a day, the EIA said.
Investors now await key inventory data. Trade group the American Petroleum Institute releases its figures late Tuesday, while the U.S. EIA report is due Wednesday morning. Analysts polled by S&P Global Platts expect to see a decline of 3 million barrels in crude-oil stockpiles. They also forecast a fall of 1.3 million for gasoline supplies and a drop of 1.4 million barrels for distillates, which include heating oil.