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Tuesday, April 09, 2019

Price changes for Thursday, April 11th, 2019


Hi to all,



After last week’s wild change in prices, I have to urge caution in the actual price changes this week. I’ll have a solid set of data for next week when things come back in balance as the new dataset gets built up.



Either way, the numbers are still “up” this week regardless.



Here’s what I have:



*Heating and stove oils show an increase of 1.8 cents a litre.

*Diesel shows an increase of 2.3 cents a litre, and...

*Gasoline shows an increase of 3.3 cents a litre.



Continued low refiner capacity still figures this week as it remains below 87 percentage points. Usual for this time of the year is around 92 to 93 percent. That missing capacity is hurting gasoline stocks as we head toward the summer.



     If there’s any other news here, it’s that prices with this week’s increase will still be close to the actual last year for the same time, being one cent over last year’s $1.34.2 a litre. Regulated maximum in St. John’s right now is $1.32.2 a litre.



     Economically, OPEC cuts, including other non-OPEC nations continue to bite into any remaining over-supply issues as Iran, Venezuela and Libya all weigh on production cuts and add their own weight to prices.



     Brent and WTI crudes has increased by close on $4 US over the past week, making acquisition costs a little higher.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil  

Tuesday, March 26, 2019

Price changes for Thursday, March 28th, 2019


Hi to all,



Here’s what I have for this week’s fuel price changes. Keep in mind that winter blending is still in effect!



*Heating and stove oil show an increase of 1/10th of a cent.

*Diesel shows an increase of 4/10ths of a cent, and...

*Gasoline shows an increase of 2.8 cents a litre.



Market highlights

With gasoline prices set to rise again this week, I ran a comparison with last year’s numbers to see where we are. Gas prices are just below where they were for the same time last  year with the exception that the Canadian dollar was about six cents less than what it was today, and probably part reason why spot prices are almost the same.  Spot price for gasoline this year for this week’s price change I have at 64.8 cents. Last year’s spot was 65.5 cents.

      Price at the pumps last year, as compared to this week’s if the prediction holds?

$1.33.1 last year versus $1.31.1 later this week.

       Oil on March 27, 2018 was at $68.91 US a barrel for Brent



Tightening supplies versus economy

OPEC and non-OPEC members are still sticking to their guns on maintaining production cuts that amount to 1.2 million barrels a day, and other factors also continue to weigh keeping oil prices up.

     The production cuts agreement is in effect until June, but many believe that deadline will be extended.

     Iran sanctions and falling Venezuelan supplies are also helping to add supply constraints to the world market, even as news of a slowing economy worldwide mounts. Iranian production has reportedly dropped below 2.6 million barrels a day, while Venezuelan production has dipped to just a million a day.

     Word of a possible slowdown was leaving oil in the markets as “mixed” as factory data from the U.S, Asia and Europe was seen as being weak. A weaker demand growth possibility also weighed on oil, keeping any overall weekly increase to oil prices this week as limited.



U.S inventory report

The Energy Information Administration’s inventory report last Wednesday was a little startling.

     U.S crude inventories dropped by 9.6 million barrels, while gasoline also dropped 4.6 million barrels.

     Distillate inventories were also down, but by 4.1 million barrels, lending some upwards support to prices.

     Refiner capacity was recorded at 88.9 percent, still not showing a good uptick on refiners getting back to work.



That’s it for this week!



Regards, to all,



George Murphy

Twitter @GeorgeMurphyOil

Tuesday, March 19, 2019

Price changes for Thursday, March 21st, 2019


Hi to all,



Here’s what I have for this week’s price changes. Keep in mind that winter blending is still in effect:



*Heating and stove oil show a drop of 1.2 cents a litre.

*Diesel fuel shows a drop of 1.8 cents a litre, and...

*Gasoline shows an increase of 1.8 cents a litre.



Refiners still offline

While refiner capacity is still lower than normal, inventories of gasoline are under pressure as gasoline stocks are not being replaced as readily as they would be if capacity was up.

     With capacity down to 87 percent, there’s still about six percent of production not entering the markets that probably won’t return until refineries come back from seasonal maintenance.

     I’m watching inventory numbers to see when refineries come back, that should bring some moderation to gasoline as the days go on.



OPEC waits until June for further cuts on production

OPEC has announced it will delay a meeting set for April that would have included a decision to extend cuts, to June, adding more speculation that the group is relatively happy with the performance of oil in response to cuts made in December.

     OPEC believes that the cuts are successfully taking a bite out of a world glut of oil and matched with news March 14th that Venezuelan production dropped by another 142,000 barrels in February, prices have been reasonably stable for the group.

     Venezuelan production is now a rough one million barrels a day.



Distillate prices worth watching

As the International Maritime Organisation deadline of January 1st, 2020 comes close, it’s worth noting that there is a predicted shortfall of “clean distillates” that could play into the markets, raising prices for distillate product like diesel fuel, heating and stove oils.

New IMO 2020 regulations calling for lower sulphur content in marine diesel fuels is causing some speculators out there to think about the availability of distillates. New regulations are setting new sulphur levels from 3.5 percent down to a half percentage point by January 1st of 2020 to combat carbon emissions. Some wonder if the diesel, heating and jet fuel markets will also be under added pressure in pricing as a result even though the new regulations affect marine diesel users, potentially the largest user group next to airlines and consumers.



Federal budget goodie

While I haven’t gone fully into the budget, one detail did stand out to me as a consumer: that the federal government will be allowing for a $5000.00 tax credit for electric or hydrogen fuel cell vehicles under the price of $45,000.00.

     Just might be helpful to those of you who may be looking for that “alternative”.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil

Tuesday, March 12, 2019

Price changes for Thursday, March 14th, 2019


Hi to all,



Here’s what I have for this week’s price changes. Keep in mind that winter blending is still in effect and that it mat throw off the distillate numbers a little.



*Heating and stove oils show an increase of 1.1 cents a litre.

*Diesel fuel shows an increase of 8/10ths of a cent, and...

*Gasoline shows an increase of two cents a litre.



Market highlights



CBS prices drop below Costco-for a short time.

In what may seem to be an oddity to some, for the first time in years, prices in Conception Bay South-went south- to a low of $1.11.9 at the pumps, while Costco, the major St. John’s player remained at $1.12.9 a litre.

        It didn’t take long for Costco to send a message however, that hopefully will be responded to by other St. John’s and northeast Avalon retailers. Costco dropped prices below CBS after a short time to sit at $1.10.9 at the pumps.

        Other retailers are selling at present for $1.17.9 while the majority are at $1.20.9 a litre.

        Keep an eye out for falling prices near you! The regulated maximum is at $1.21.7 a litre. Could mean a savings of up to $8 based on a seventy litre fill!



Venezuelan production falls again

Venezuela continues to feel the effects of economic unrest as crude oil production continues to retreat, this time to fall below 1.1 million barrels a day by another 60,000 barrels as measured for February month.

     The economic unrest has also shut off electricity in some areas of the country, possibly aggravating the situation.

     The figures from S7P Global are the most recent info I have, but OPEC information will also be available in the coming days that will no doubt, highlight both OPEC+ cuts as well as a drop in Venezuelan production.



Iran sanctions starting to kick in

Already under sanction, Iran will most likely start to feel another pinch soon as exceptions were made in exports to other countries as long as those countries took the time to find other suppliers.

     Countries such as China, India and Japan were given upwards of six months to make arrangements from other exporters so there’s an expectation that Iranian production will only start to fall back and start to take a bite out of world supply.

      Expectations are for Iranian exports to fall back from 3.7 million barrels a day in May 2018 to 2.7 million a day by the time sanctions fully take hold May 2019.



US inventories

The Energy Information Administration’s inventory report last week showed a build in crude inventories as some refineries remained down for regular maintenance. Capacity stalled at 87.1 percent while both gasoline and distillates showed a drop, gasoline down by 4.2 million barrels and distillate down 2.4 million.

     U.S domestic production remained at 12.1 million barrels a day.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil

Tuesday, March 05, 2019

Price changes for Thursday, March 7th, 2019


Hi to all,



Here’s what I have for this week’s price changes. Keep in mind that winter blending is still in effect, so it may throw off the numbers a tad.



*Heating, stove oil and Diesel all show no change this week.

*Gasoline shows an increase of 3.6 cents a litre at the pumps.



Market highlights



U.S inventories surprise

The U.S Energy Information Administration’s weekly report on Wednesday last week surprised the markets a little as crude oil was recorded well down from analysts predictions.

     While most predicted a drop, some around 2 million barrels, the actual numbers showed a drop of 8.6 million barrels.

      The surprise was twice over as gasoline supplies dropped 1.9 million barrels while capacity was recorded at 87.1 percent.

      Distillates dropped 300,000 barrels over the last week.

      The next EIA inventory report is due Wednesday.



U.S-China trade talks continue

The U.S and China tariff dispute may be coming to an end, at least that’s the feeling among some speculators as oil prices responded to the news on Friday.

     Refined prices also responded, with gasoline rising sharply as demand was thought to pick up along with anticipated oil demand if the talks prove successful.

     Any removal of tariffs from Chinese goods coming into the U.S will be seen as a spur on demand that would increase consumption.



Canadian dollar slides again

The Canadian dollar lost ground against the U.S Greenback again this week as oil price gains didn’t spur a rise in the Canuck buck.

     Data on Friday showed a stagnation in Canada’s economy with this country recording the slowest growth in almost three years, partly  due to a downturn in oil prices and activity.

     The Canadian dollar lost an even two cents against the U.S Greenback since last Wednesday.



That’s it for this week!



Regards,



George Murphy

Twitter GeorgeMurphyOil

Tuesday, February 26, 2019

Price changes for Thursday, February 28th, 2019


Hi to all,



Here’s what I have for this week’s price changes. Keep in mind that winter blending may throw off distillate prices a little:



*Heating and stove oils show an increase of 1/10th of a cent a litre.

*Diesel fuel shows an increase of 3/10ths of a cent a litre, and...

*Gasoline shows an increase of two cents a litre.



Market highlights



Trump tweet sends oil downwards-Monday

It’s not often you see it, but when the U.S president sees oil rise, and then reacts, it’s amazing to see the markets react as much as they did on Monday.

     Trump tweeted:  “Oil prices getting too high. OPEC, please relax and take it easy. World cannot take a price hike-Fragile”

     Oil prices retreated on Monday, losing over $2 US according to US Energy Information Administration data.

 

Added value to heavy crude could benefit this province

A story I read online on Oilprice.com talking about Venezuela’s heavy crude has me thinking...

    The story at the supplied link talks about a possible shortage of heavy crude oils on the markets that could potentially run short as a result of sanctions and political strife in Venezuela.

     But the article also talks about infrastructure issues here particularly in central/western Canada, but not mention the situation here off the coast of Newfoundland and Labrador.

     We’ve got a fair bit of heavy crude off our shores now.

     But remember, with sanctions against Iran, OPEC production cuts and possibly further disruptions coming from Venezuela and a lack of infrastructure to get it out of central Canada, this province may be in line to benefit by the shortage.

     I’ll keep an eye to further moves in heavies...



U.S inventories

U.S crude inventories were up over the last week ending February 15th with crude adding 3.7 million barrels.

     Inventories of distillate and gasoline both dropped by 1.5 million barrels on 85.9 percent capacity as refineries remained partially shut down for routine maintenance to make ready for spring production of gasoline.

     U.S domestic production added another 100,000 barrels bringing U.S domestic production to an even 12 million barrels a day.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil

Tuesday, February 19, 2019

Price changes for Thursday, February 21st, 2019


Hi to all,



Here’s what I have for this week’s price changes. Keep in mind that winter blending is still in effect, so the distillate numbers may be off somewhat.



*Heating and stove oils show an increase of 3.4 cents a litre.

*Diesel fuel shows an increase of 3.7 cents a litre, and...

*Gasoline shows an increase of 4.3 cents a litre.



Market highlights



Saudi Arabia expands production...cuts

Surprise!

     OPEC member Saudi Arabia announced last week that it would add another 500,000 barrels a day to cuts already made with other OPEC and non-OPEC nations in a move designed to help support oil prices.

     The cuts would start in March and add to the 1.3 million barrel a day cut agreed to by those enations in November. The surprise announcement helped boost oil prices another $3 US over the past week.



Refiner production down

Ironic as it may be, just as prices for gasoline start to ramp up ahead of the spring run-up to the summer driving season, refiners are shutting down for maintenance and to do the switch from mostly distillate production to gasoline.

     It may be February, but with a 45 day delivery time from the oil patch to consumer, there’s really not that much time before we enter spring, or at least south of the border anyway.

     With speculators eying the summer driving season, it stands to reason the same time every year, that a run-up in gasoline spot prices is also quick to follow.



Eye on Venezuela

US sanctioning of Venezuelan imports of crude haven’t had too much effect on Venezuelan production...yet.

      January production of crude oil was measured at 1.1 million barrels a day, down 59,000 barrels from the month previous, but down almost thirty percentage points for the same time period a year earlier.

      US sanctions have helped support the price of West Texas Intermediate as any sour crude from Venezuela has resulted in replacement from American and other sources.

      I’ll be keeping an eye for any other signs of disruptions here as any may cause further increases in price if supply can’t be met through other sources.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil