Fueling Strategy: Please fill as needed today/tonight – Be Safe!
NYMEX Crude $ 44.83 UP $.3900
NY Harbor ULSD $1.4085 DN $.0011
NYMEX Gasoline $1.3164 UP $.0148
NEWS
Oil futures settled on a mixed note Tuesday, with West Texas Intermediate crude ending at a one-week high and Brent crude finishing with a loss as traders eyed a pact between the world’s two largest crude producers, Russia and Saudi Arabia, aimed at stabilizing the market.
October West Texas Intermediate crude rose 39 cents, or 0.9%, to settle at $44.83 a barrel on the New York Mercantile Exchange, after trading as low as $43.84 during the session. WTI settled Friday with a gain of 3% at $44.44 and had climbed past $45 in electronic trading Monday, which was a holiday for U.S. financial markets. November Brent crude meanwhile, fell 37 cents, or 0.8%, to end at $47.26 a barrel after settling Monday up 1.7% at $47.63.
Russian and Saudi officials on Monday said they would set up a working group to monitor the oil market and come up with recommendations to promote stability. The announcement gave a lift to crude prices on Monday, though those gains faded by Monday afternoon as the news underwhelmed traders who had been hoping for a production freeze. “Although, of course, Russia and Saudi Arabia (and all other producers) want higher crude prices, what they really want is higher prices at a given market share,” Troy Vincent, an oil analyst at ClipperData told MarketWatch. “It’s easy to agree that prices would ideally be higher, but not nearly as easy to agree on who will cede market share and by how much.” Given that, “we are still in the same place we were during the last ‘freeze’ discussions [last Spring]: the biggest producers want higher prices but don’t want the return of U.S. shale production that would accompany these higher prices,” he said. “The quagmire continues for oil-revenue-dependent nations.” There has been speculation over a potential pact to freeze production, with members of the Organization of the Petroleum Exporting Countries expected to hold an informal meeting on the sidelines of an energy forum in Algeria later this month. “While the short-term gains from freeze deal speculations have been impressive, the commodity remains pressured with further losses expected if September’s informal OPEC meeting concludes without an effective deal,” said Lukman Otunuga, an FXTM analyst, in a note on Tuesday.
After meeting with OPEC Secretary-General Mohammed Barkendo, Iran’s Oil Minister Bijan Zangeneh said Tuesday that his country would support any OPEC decision that seeks to stabilize the oil market, state TV reported, according to the Associated Press. He said most members of the oil-producing group want to see the price of oil at $50 to $60 a barrel. The comments apparently clashed with comments from a director at the National Iranian Oil Company. Iran’s PressTV reported Monday that Mohsen Ghamsari, the nation’s director for International affairs of the NOIC, said that NOIC may lift its output capacity to 4.3 million barrels a day in the first quarter of next year and eventually reach 5 million barrels a day in two to three years. A proposal among major oil producers to freeze output last Spring failed after Iran refused to join in as it attempts to reach its pre-sanctions output level of 4 million barrels a day.