Fueling Strategy: Please fill all tanks tonight and keep’em topped Saturday, Sunday AM wholesale prices will go UP 4 cents – Be Safe

NYMEX Crude $ 50.33 UP $.9800
NY Harbor ULSD $1.5827 UP $.0374
NYMEX Gasoline $1.6523 UP $.0460

NEWS
Oil futures settled Friday at their highest level in a month, scoring a more than 5% weekly gain as investors expressed optimism about possible price-supportive outcomes from a closely watched OPEC meeting next week.

Prices, however, settled below the session’s best levels as a weekly report revealed an 18th weekly increase in the number of active U.S. oil rigs. June West Texas Intermediate crude tacked on 98 cents, or 2%, to settle at $50.33 a barrel after touching a high of $50.49. The settlement was the highest since April 19, according to data from Dow Jones. The June WTI contract, the U.S. benchmark, expires at the end of Monday’s session and it ended roughly 5.2% higher for the week. July Brent crude on London’s ICE Futures exchange gained $1.10, or 2.1%, to $53.61 a barrel. It also settled at a one-month high, about 5.5% higher for the week.

Up for final discussion by the cartel on May 25 is whether to extend the current six-month production-cut deal beyond the mid-2017 expiration and whether agreed-upon reductions should be increased. It is widely expected production-limit extension will occur, and energy officials from Saudi Arabia and Russia this week signaled they back a nine-month extension. “A six-month extension to current cuts had been the baseline of expectations,” said Colin Cieszynski, chief market strategist at CMC Markets. Recent reports “suggest an OPEC committee is also looking at deeper supply cuts to shore up the market and reduce the inventory overhang,” he said.

Analysts at Secular Investor said Friday that if the block of oil producers are as “efficient with their production cap as last time, there’s no reason why the oil price shouldn’t move up to a $55-$60 trading range.” That “would be high enough to ‘save’ balance sheets and budgets, but still low enough to avoid new high-cost and marginal oil projects being commissioned,” they said.

On Friday, weekly data from Baker Hughes Inc. revealed an 18-straight week of growth in active U.S. oil-drilling rigs, raising the prospects for more oil production. But government figures on Wednesday showed the first week-to-week drop in domestic oil production since February, a development which also helped lift crude prices this week.

Meanwhile, the presidential election in Iran was also grabbing oil trader’s attention Friday. Commerzbank analysts said the result could have “major consequences for the oil market” if conservative cleric Ebrahim Raisi wins the vote. Raisi and reform-oriented incumbent Hassan Rouhani are leading the polls. An election victory for Raisi would “drive oil prices up noticeably,” according to Commerzbank analysts.

Looking further ahead, “driving season is about to start and while this might merely compensate for the lower heating-related oil demand, it will help to reduce the inventory levels of crude oil and oil derivatives,” said the team of analysts at Secular Investor.

Have a great day,

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