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Tuesday, April 25, 2017

Price changes for Thursday, April 27, 2017

Hi to all,

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

*Heating and stove oil show a drop of 2.4 cents a litre....
*Diesel shows a drop of 2.8 cents a litre, and...
*Gasoline shows a drop of 2.9 cents a litre from the regulated maximum.

Market highlights

API reports crude and gasoline inventories as "up"
      The American Petroleum Institute, an industry organization, has released its inventory report for the last week, and it's not good if you're a speculator.
      While crude only showed a growth of 900,000 barrels, gasoline showed a surprising build of 4.4 million barrels over the last week.
      If tomorrow's EIA inventory report also shows a build in inventories, it will be a troubling sign that demand may have weakened ahead of the start of the summer driving season
Doubts about OPEC cut extension
      Speculators must be getting nervous...
      While US domestic output continues to show robust growth, OPEC is now asking itself whether the group's output cuts are having the desired effect with oil prices. Doubts that OPEC will maintain their self-imposed output cuts past May month may be signaling the prospect that OPEC may again open the spigots in an attempt to turn down US growth.
      US domestic oil output has increased by close on 850,000 barrels since the last OPEC meeting on cuts at the end of November, well ahead of the pace that the EIA predicted for 2018.

      Stay tuned. This week could be interesting!


George Murphy
Twitter @GeorgeMurphyOil

Wednesday, April 19, 2017

Price changes for Thursday, April 20th, 2017

Hi to all,

Here are expected price changes for this Thursday:

*Heating, stove oil and Diesel are all expected to increase by 3/10ths of a cent a litre, and......
*Gasoline shows a drop of a cent a litre.

   Keep in mind my margin for error of 3/10ths of a cent a litre.

Market highlights

Saudi's say "too soon"
In what some consider to be a major shift in OPEC's thinking, the Saudi Arabian oil minister says it is "too soon" to talk about extending the cuts OPEC and non-OPEC members agreed to back in November.

   The six month agreement to cut production is a good reason why some have seen the price of oil rise to present levels, but it was expected by most that the agreement would be extended for another six months beyond May.
   Stay tuned as OPEC meets again in Vienna May 25th.

Province to cut back on gas taxes

The budget has some good news for consumers who were hoping to see a retreat in gasoline prices.

   Largely unexpected, the provincial government made the decision to lower gas taxes by 8.5 cents a litre (9.8 taxes in) by June 1st, and a further four cents a litre (4.9 taxes in) as of December 1st, while the remainder of the initial increase will be reviewed in the Fall.

   I was initially hoping that the budget would lower gas taxes by five cents a litre, so, this move was surprising, but at the same time, I was pleased to see the retreat in taxes immediately before summer, and well after the upswing in summer gasoline prices.

   It will also serve to put a little more disposable income into the hands of consumers as well as transportation-based small businesses.

Regards for now,

George Murphy
Twitter @GeorgeMurphyOil

Tuesday, April 11, 2017

Price changes for Thursday, April 13, 2017

Good evening to all,

Here's what I have for price changes this week, and the news is not good. It's just about all geo-political.

While I'm at it, I'll throw in this little disclaimer: "While not the actual price change that may occur, the numbers will be indicative of what direction prices will go."

*Heating/stove oils show an increase of 2.2 cents a litre.
*Diesel fuel shows an increase of 2.4 cents a litre, and...
*Gasoline shows an increase of 4.4 cents a litre.

Market highlights

Libya output weighs markets
Libyan production has once again been almost fully shut in after hitting close to 700,000 barrels a day in output just last month.
      News out of Libya indicates that the largest output terminal at the Sharara field has been cut off reducing Libyan output to just 250,000 barrels a day.

Syrian attacks raise tensions
Tensions between the US and Russia after the US strikes in Syria are on the increase, helping to bolster oil prices.

Demand up again
US inventory reports from both the EIA and API (American Petroleum Institute) indicate an increased demand in gasoline, even as refinery capacity picks up to meet summer production.
I'll get a better indication of increased demand from tomorrow's EIA inventory data.

IS US shale able to keep pace?
While OPEC and non-OPEC cuts are beginning to take hold, hitting the oil markets with close to 1.8 million barrels less in the markets, US shale production has only responded with an increase in 700,000 barrels increase in domestic production.
     That leaves a gap of 1.1 million barrels of growth that must give investors a possible "window for investment". That window may also be complicated by slower than expected growth in production as former oil workers may not go back to work at their previous jobs as fast as when they first went into the industry.
     Nothing like a good oil price collapse to bring an industry back to its own reality.

That's it for this week!


George Murphy

Twitter @GeorgeMurphyOil

Tuesday, April 04, 2017

Price changes for Thursday, April 6th, 2017

Hello to everyone,

Here's what I have for this week's price changes. I expect everyone will share this one!

*Heating and stove oils show an increase of 2,7 cent...s a litre.
*Diesel fuel shows an increase of 2.8 cents a litre, and...
*Gasoline shows an increase of 4 cents a litre.

Market highlights

OPEC to extend production cuts agreement
In what some are considering a surprise to the markets, strong rumours are persisting that show OPEC members in agreement on extending their cuts to production for longer than the six months first agreed to in November.
While the cuts may help to bring prices up, there are some worries amongst members that other non-OPEC producers may not extend their end of the deal, and continue to sign on to self-imposed cuts. Non-OPEC producers agreed to carry out almost 600,000 barrels in production cuts, making total cuts to the market almost 1.8 million barrels a day.

Demand for gasoline on the upswing?
Expectations of a extension to production cuts aren't the only item making news with oil this week.
Expectations of a draw-down on inventories of both gasoline and oil are putting some upwards pressure on prices this week as gasoline shows a draw against inventory at the same time as refinery capacity increased this past week by another two percentage points.
Analysts expect the trend to continue with data from the US Energy Information Administration to be released tomorrow.

US rig counts up again...But can US domestic keep pace?
Oil was also buoyed this week as several key storage areas in the Caribbean are said to have dipped in inventories of crude oil, swallowing up some of the surplus along the US Gulf coast and Eastern seaboard.
The question that needs to be answered now is: Can US domestic drilling and oil output keep ahead, or pick up the pace against cuts made by OPEC? Or, do we see a steady, continued rise in oil prices if and when production meets the level of cuts agreed to in November?
The US rig count increased another 15 rigs last week and should keep rising if oil rises in price.

That's it for this week!

Twitter @GeorgeMurphyOil

Tuesday, March 28, 2017

Price changes for Thursday, March 30, 2017

Hi to all,

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

*Heating/stove oil shows a drop of 1.2 cents a litre.
*Diesel shows a drop of 1/10th of a cent a litre, and...
*Gasoline shows an increase of 6/10ths of a cent a litre.

Libyan crude production drops
     Crude oil increased the last two days of the pricing session as Libyan crude production dropped almost 250,000 barrels a day because of disagreements between factions over control of two key oilfields.
     The Sharara and Wafa fields were part of the total source of oil that helped Libya pump out close to 750,000 barrels a day. The removal of the two fields drops total output down to a half million barrels a day, almost one million barrels less than the 1.5 million a day before the revolution started.

API data weighs
     Latest data from the American Petroleum Institute's inventory shows another modest build of 1.9 million barrels, while gasoline shows a "less than expected" draw of just 1.1 million barrels.
     While the EIA data is the chief number I watch, the data on gasoline is showing me that demand remains weak for gasoline.
     Chief number to watch tomorrow will be the refiner capacity number, which should give a better read on any growth in demand, as well as any detected growth in overall US domestic output.

Still watching the numbers!


Twitter @GeorgeMurphyOil

Tuesday, March 21, 2017

Price changes for Thursday, March 23, 2017

Hi to all,

Short and sweet, here's what I have for this week's price changes:

*Heating & stove oils show a drop of 4/10ths of a cent a litre.

*Diesel fuel shows a drop of 7/10ths of a cent a litre, and...

*Gasoline shows no change in price this week.

Market highlights

API report shows another inventory gain

     While not my source of inventory news that influences my way of thinking, new numbers from the American Petroleum Institute shows another increase in crude oil supply, this time by 4.5 million barrels a day

     Gasoline showed a drop in inventories of 4.9 million barrels, while distillate supplies dropped just over 800 thousand barrels.

Canadian dollar steady

     Up to three days ago, the dollar remained steady against the US greenback, but gained almost a penny against its US cousin in the latter half of the week.

     Oil, in the meantime, lost a dollar US this past pricing session.

     Brent was priced at $40.67 a barrel March 21st last year.

Upcoming provincial budget

     With oil prices close to $51 US a barrel Brent right now, it is obvious that the government will show some added revenue from oil royalties.

     It may be wishful thinking, but it may be time for the government to roll back the heavy increase that was levied onto gas taxes, if only just in part. While government may have thought it "prudent" to increase taxes, it became heavy-handed to levy an added 16.5 cents in added gasoline tax.

     Additional taxes resulted in an increased take as well from HST with the result being a twenty cent a litre hit at the pumps.

     We all could use the break!

That's it for this week!


George Murphy

Twitter @GeorgeMurphyOil

Tuesday, March 14, 2017

Price changes for Thursday, March 16, 2017

Hi to all,

Here’s what I have for this week’s price changes, baring in mind that winter blending mat throw off the distillate numbers slightly from the actual that may occur.

*Heating and stove oils show a drop of 3.1 cents a litre.

*Diesel shows a drop of 3 cents a litre, and...

*Gasoline shows a drop of just 2/10ths of a cent a litre.

Market highlights

Focus off distillate turning to gasoline

     If you were a speculator in the distillate market, you didn’t make a pile of money, but you didn’t really lose either. Both ways you look at it, prices were moderate, even to some consumers.

     But it’s time to pull out now, and as you do, you turn to the gasoline markets where, hopefully, you’ll see a rise in demand as spring and early summer comes on.

     So, while consumers should start to see some expected drops in distillate prices here into the summer, those same consumers begin to see some support for gasoline: just part of the reason why no big drop in the gasoline markets this week.

     But don’t expect too much pressure yet, mind you!

     Until consumers see an uptick in demand, expect no immediate growth in gasoline prices this summer. With near-record inventories of gasoline out there this spring ahead of the switch-over from distillate to gasoline, there’s going to be reason for concern for refiners and Big Oil when refineries begin turning out more gasoline for consumption.

     What’s bad for them though, is not necessarily a bad thing for consumers...

OPEC blinks

     OPEC member Saudi Arabia reported today that they secretly increased production upwards from January adding another 260,000 barrels a day to production.

     The Saudi’s produced 10.1 million barrels a day, from 9.8 million barrels a day in January.

     Now, if I were a betting man, I’d put my money on one simple reason: That U.S shale has become a bigger influence on OPEC oil policy than anyone realised. My guess is that, adding a little oil to the markets is an attempt to “taper off” US growth in domestic oil and still allow them to survive.

     It’s a “warning”...

     What OPEC does in the next two months will be determined by what U.S domestic in the next two weeks with domestic production figures when they are released by the US Energy Information Administration.

     That’s it for this week!


George Murphy

Twitter @GeorgeMurphyOil