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Tuesday, July 19, 2016

Price changes for Thursday, July 21, 2016


Hi to all,

Final numbers for this week are actually not far off from last night's posting. Here's what I have:

*Heating and stove oils show a drop of 2.1 cents a litre....
*Diesel fuel shows a drop of 1.5 cents a litre, and...
*Gasoline shows an increase of 7/10ths of a cent a litre.

Market highlights

Gasoline to drop next week?
     An after hours American Petroleum Institute inventory report sent gasoline futures lower as the industry report showed a build in gasoline inventories that lends further support to weaker demand for gasoline than industry speculators thought. When the industry starts sending out signs of weak demand, you know there's a "problem" with demand.
     Inventory reports out of the US Energy Information Administration in recent weeks has been showing the same sign of weak summer demand that has played well into lower prices (except here because of the added tax).

Distillate drops ahead of September buying contract
     Distillate prices in the trading markets are down again this week, ahead of the September buying contract. Inventories of heating, stove oil and diesel fuels are all well above last years levels for this time of the year and show promise of potentially lower prices for those fuels to consumers if the trend keeps going.
     Stocks are presently about twelve million barrels ahead of last year's mark. With refinery capacity close to 93 percent, I expect there to be more additions to inventories of distillate that will mitigate any increase to consumer prices...At least for the time-being!

That's it for this week!

Regards,

George Murphy
Twitter @GeorgeMurphyOil

Tuesday, July 12, 2016

Price changes for Thursday, July 14, 2016

Hi to all,
Here's what I have for this week's price changes in what has been a very volatile week!

*Heating and stove oils show a drop of three cents a litre....
*Diesel fuel also shows a drop of three cents a litre, and...
*Gasoline shows a drop of 3.4 cents a litre on the way.


Market highlights

*Gasoline inventories remain high
       As reported by the US Energy Information last week, "product supplied" versus "product used" remains about 250,000 barrels above where refiners feel the numbers should be to maintain prices. The result played heavy in the markets last week as demand was seen to be weak and inventories for gasoline will remain high through the summer.
       Gasoline inventories are a strong 21 million barrels above last year's numbers. Refiner capacity is close to 92 percent as they just keep refining!

*Early winter outlook
       While the US EIA reports inventories for gasoline up, distillate inventories are also up, but not to the same degree. As of last week, distillate inventory is just above 11 million barrels for the same timeframe last year, and that number may be important to see maintained in the long term.
If inventories remain above the seasonal we are seeing this week, it may prove that the industry may be able to keep up with any anticipated demand over the winter, and this may keep prices relatively steady as compared to last winter.
       Any drop in refiner capacity or uptick in demand for distillate will, however, impact inventories and may help to increase prices. But for now, it's looking like "steady as she goes".

I'll leave it there for this week!

Regards,
George Murphy
Twitter @GeorgeMurphyOil

Tuesday, July 05, 2016

Price changes for Thursday, July 7, 2016

Hi to all,

Here's what I have for price changes this week:

*Heating and stove oils are up by 1.2 cents a litre....
*Diesel fuel is up by a penny even, and...
*Gasoline shows a penny down.


Market highlights

*US drilling rig count rises
        The US drill rig count rose again last week, partly sparking the markets to look again at rising oil prices and sparking fears that the US domestic production has hit a level where they can show clear profits at lower oil prices.
        The count rose by eleven rigs last week, with news hitting the markets only today as markets remained closed over the US Independence Day holiday.
        With rig counts rising again, the possibilities of added oil to US domestic supplies saw oil prices again in retreat, falling close to five percentage points from Friday's market close.

*Gasoline demand takes a tumble
        As predicted here a few weeks ago, US demand for summer gasoline has taken an "expected" shift downwards in a late report from the US Energy Information Administration.
        Last week's inventory report saw the markets force gasoline prices on the New York Mercantile Exchange to "freefall" by close to eight cents a US gallon as reality of rising production and rising inventories of gasoline midway through the US summer driving season bites home.
        Latest trends in the US reports show refinery capacity rising and exceeding US consumption of gasoline by close to 250,000 barrels a day and leaving inventories over 20 million barrels over the same timeframe from last year.
        The sell-off was on and oil prices paid for it.

*Don't expect big changes...
        While both oil and gasoline prices were down today, don't expect big changes to prices this week as a few days trading are needed to bring prices down. The latest hit on the markets will most likely play into prices next week, if the downward trend continues.

That's it for this week!

Regards,

George
Twitter: @GeorgeMurphyOil

Tuesday, June 28, 2016

Price changes for Thursday, June 30th, 2016

Hi to all,

Here's what I have for this week's price changes:

*Heating and stove oils show a drop of just 6/10ths of a cent.
*Diesel fuel shows a drop of a half penny, and...
*Gasoline shows an added 1.9 cents a litre.

Market highlights

HST increase this week!
*Remember that this week's increase at the pumps will also see price changes that include an extra 2% increase in the HST, going from 13% to 15%. The increase MAY be reflected in this Thursday's price setting, or there will be a second increase to follow to account for the adjustment directly on July 1st.

Venezuela turmoil takes away barrels
*While unrest in Venezuela continues, crude output from the South American oil giant continues to slip as prices show little sign of a rebound and Venezuela slips further into the economic doldrums. Output there is projected to drop another ten percent as the country slips further into recession and world oil prices remain low.

Brexit weighs...Or it did!
* Interesting to watch oil slip late last week as Britain voted to get out of the European Union. What happened was a huge move by speculators moving dollars from currencies like the Pound, over to other stable commodities like gold or the US greenback. Our own dollar lost a solid two cents against the US dollar as oil fell through the next two days.

I'll leave it there for now!

Regards,

George Murphy
Twitter @GeorgeMurphyOil

Tuesday, June 21, 2016

Price changes for Thursday, June 23, 2016

Hi to all,

Here's what I have for price changes for this week!

*Heating and stove oils show a drop of 6/10ths of a cent....
*Diesel shows a drop of an even penny, and...
*Gasoline shows a drop of 3.5 cents a litre on the way.


Market highlights

Rig count continues to rise
       It may be a painful thing to watch, but the fact that the US drilling rig count was up again last week put some worries back into the markets late last week that US drilling is more resilient to the "Saudi onslaught" of oil that has been dumped into the markets.
      That's the second week in a row that the rig count has been up and probably proves that the US drilling industry itself has learned how to cut some of their costs in order to keep operating.

Return of Alberta crude
      As Alberta crude starts to come back online starting last week, also coming along with it was less of a worry about any implied shortages of oil in the markets. The fires in Alberta's Fort McMurray area took close to 750,000 barrels offline, making some imports to the US Midwest and Oklahoma area a little shy on inventory that helped support prices.

Demand for gasoline slipping?

      While US inventories of gasoline were down again last week, refiner capacity just came over the line of 90%, a bit of a signal to the markets that maybe some refiners are trying to throttle back on gasoline production to help support the price.
      Gasoline and crude oil are both at historically high levels of inventory for this time of the year with gasoline inventories 19 million barrels over the same time period for last year.
I'm thinking that speculators aren't entirely "pleased" with the notion going forward that demand will pick up anytime soon based on that figure.

I'll leave it at that for now!

George Murphy
Twitter @GeorgeMurphyOil

Tuesday, June 14, 2016

Price changes for Thursday, June 16, 2016

Hi to all,

Here's what I have for this week's price changes:

*Heating and stove oils to increase by 4/10ths of a cent....
*Diesel shows an increase of just 1/10th of a cent a litre, and...
*Gasoline shows a drop of 2.5 cents a litre coming.


Market highlights

*Baker Hughes rig count is up
      News from the drilling fields may include some happy points for some as the Baker Hughes rig count is up for the second week in a row.
      The rig count, showing active and new start-ups at various locations across the US and North America, showed an added six rigs back in operation. The rise in oil prices in recent weeks is reason enough why we are seeing a rebound in active rigs.
      Here in Canada, another twelve rigs went back into operation.
      With the rise in active rigs the past two weeks, oil industry people are now looking at the added effect of more pumped oil will have on US domestic production figures.

*Iran oil production
      It was only the middle of January when sanctions were lifted against Iran, a move that many predicted would add an immediate 500K barrels to the markets within six months of the sanctions being lifted.
      News today seems to indicate that Iran has beaten that estimate and is also well on their way to hitting the million barrel day added oil production before year's end.
Latest figures show Iran produced 750,000 barrels more than what they did in the month before sanctions were lifted, quite a remarkable feat!
      But keep an eye to Iran and Saudi Arabia as they both compete for market share. As predicted, that fight will carry on with evidence already pointing to Saudi Arabia discounting prices to European customers, a mainstay market for Iranian crude oil.

That's it for this week!

Regards,

George Murphy
Twitter @GeorgeMurphyOil

Tuesday, June 07, 2016

Price changes for Thursday, June 9, 2016

Hi to all,

Here's what I have for price changes this week, with all data now in:

*Heating and stove oils show a drop of 27/100ths of a cent drop....
*Diesel fuel shows a drop of a half cent a litre, and...
*Gasoline shows a drop of 2.3 cents a litre.


Small consolation for the huge increase in the taxation component last week!

Market highlights

Canadian dollar shows an increase
*A small and disappointing US jobs report showed some weakness in the US greenback last week that allowed the price of oil to rise as a measured response from speculators withdrew from the dollar and invested in oil. Speculators played on oil, helping the Canadian dollar increase against the US greenback as a result, with the Canadian dollar averaging two cents up against the US currency as of market close today.

US gasoline at peak?
*The price of gas has started to drop on most exchanges this past week as the peak of US summer driving season is now upon us. With speculators seeing ample supply of gas to match demand, and most futures markets into the August buying contract, it seems to me at least, that investors won't see prices any higher than right now. Look for prices to remain relatively steady now through the summer.

OPEC meetings a failure?
*Meetings between OPEC members were rather tepid and seemed to be more designed to keep the group together, rather than meant for the imposition of any kind of round of production cuts. While prices have been rising for oil as of late, I believe that this was the excuse that the group needed to not change present levels of production. In the meantime, production as well as exports, keeps climbing in OPEC members' Iraq and Iran in the face of self-imposed production maintenance.

I'll leave it at that for this week!

Regards,
George Murphy
Twitter @GeorgeMurphyOil