Fueling Strategy: Please fill as needed tonight – Be Safe

NYMEX Crude $ 51.36 DN $.1100
NY Harbor ULSD $1.6063 DN $.0004
NYMEX Gasoline $1.6526 DN $.0088

NEWS
Oil prices fell Wednesday to register their first decline in six sessions, as traders weighed potential outcomes for a much-anticipated meeting of major oil producers that will help decide the fate of global crude production levels.

A joint committee of members and nonmembers of the Organization of the Petroleum Exporting Countries on Wednesday recommended a nine-month extension to the production-cut agreement that expires in June. Some news reports Wednesday afternoon, however, said there was talk of a potential one-year extension, to the end of June 2018—but that failed to offer much support to oil prices. Separate data Wednesday, meanwhile, revealed that U.S. crude supplies fell a seventh week in a row.

Following the supply data, the price action became “a function of positioning ahead of the OPEC meeting tomorrow,” Tyler Richey, co-editor of the Sevens Report, told Market Watch. “Oil futures rose over 5% since the chatter of a nine-month extension began late last week and we are starting to see some speculative profit-taking and repositioning” ahead of Thursday’s meeting, he said.

July West Texas Intermediate crude shed 11 cents, or 0.2%, to settle at $51.36 a barrel on the New York Mercantile Exchange. July Brent crude the global benchmark, fell 19 cents, or 0.4%, to $53.96 a barrel.

Data from the U.S. Energy Information Administration Wednesday showed that domestic crude supplies fell by 4.4 million barrels for the week ended May 19. That was the seventh weekly drop in a row reported by the EIA.
The American Petroleum Institute late Tuesday reported a fall of 1.5 million-barrel, according to sources, while analysts polled by S&P Global Platts forecast a fall of 2.8 million barrels. “Strong refinery runs, which are over a million barrels per day higher than year-ago levels, have combined with a drop in Canadian imports to encourage a draw,” said Matt Smith, director of commodity research at ClipperData. The week’s main event, however, remains the Thursday OPEC meeting. The cartel and other major producers were widely expected to agree to an extension of the agreement to trim production, even before the joint committee’s recommendation Wednesday. “There are still some potential catalysts that could make the decision both bullish or bearish tomorrow,” said Richey. “Deeper cuts would definitely be the bullish wild card to look for, as that is not priced into markets at current levels.”

In a statement Wednesday, the joint committee of OPEC members and nonmembers recommended that the agreement to cut roughly 1.8 million barrels from global production be extended by nine months past its end-of-June expiration. But analysts already view an agreement extension as the most likely scenario outcome for the OPEC meeting Thursday. Meanwhile, data from the EIA also revealed declines in U.S. petroleum product stockpiles. Gasoline supplies fell by 800,000 barrels—down about double what analysts polled by S&P Global Platts forecast, while distillate stockpiles were down 500,000 barrels last week, matching expectations.

Have a great day,

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