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Tuesday, November 14, 2017

Price changes for Thursday, November 16, 2017


Hi to all,



Here’s what I have for price changes for Thursday:



*Heating and stove oil to increase by 1.3 cents a litre.

*Diesel fuel to increase by 1.2 cents a litre, and...

*Gasoline to decrease by 1.2 cents a litre.



From the markets



OPEC rethinks demand forecast

OPEC is rethinking it’s forecast for world oil demand and states in it’s release a factor one would have suspected would make a worldwide impact before now: the electric vehicle.

     In it’s demand forecast, OPEC states a lower than expected oil demand because of the electric vehicle and other outside oil producers.

     Today also saw a report from the International Energy Agency that seemed to confirm OPEC’s report that also calls for lower than expected world oil demand.

     The news today sent crude lower from it’s November 6th peak at $64 US a barrel to today’s close around $61 US.



Traders begin to worry over U.S domestic output

Traders are also beginning to worry over the effect of slightly higher oil prices and what that will do to stall the recent rise in oil prices.

     It’s generally seen that with OPEC cuts to production and their initial effect on the price, that there would be some sort of response as U.S small shale producers headed back to the oil patch. Last week’s inventory report from the U.S Energy Information Administration saw a huge build in production with an added 67,000 barrels of oil added on to a record 9.62 million barrel a day output.

     News today also saw a drop in Saudi Arabian imports into North America with the development of “closer” domestic sources.



Futures prices tell a tale

With the province getting some added revenue from higher oil, I saw fit to have a look at what traders are thinking for the future with some of the contracts that are out there.

     For the final quarter of this year, expect $61 US and change as markets rebalance.

     Fiscal 2018 looks the same with oil (Brent) averaging $61 US, but this starts to drop back towards $58 US through to fiscal 2019.



That’s it for me this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil

Tuesday, November 07, 2017

Price changes for Thursday, November 9th, 2017


Hi to all,



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



*Heating/stove oil to increase by 1.7 cents a litre.

*Diesel fuel to increase by 7/10ths of a cent per litre, and...

*Gasoline shows an increase of 2.2 cents a litre.



Saudi Arabia rules the oil news

A heir-apparent has taken the focus in the news this week as Mohammed Bin Salman, the next ruler of Saudi Arabia, had his security forces out on Sunday making mass arrests and detentions of any potential rivals to his throne.

     Oil has risen almost $3 US to hit $64 US for Brent crude since news broke of the mass arrests.

      While not seen as an immediate threat to Saudi Arabian governance, it has been seen as clear evidence that there is considerable unrest in the lead OPEC oil producing nation.

      Riding the tails of a revival in crude prices is a projected increase to US shale output in the coming months as U.S producers capitalize on rising oil prices, but they could be running into a problem...



If shale output can’t keep up...



According to a story through CNBC, U.S shale output may be experiencing a  problem caused by the last collapse in oil prices.

     The problem is simple: they can’t get the drill-bits into the ground fast enough.

     Drillers are simply not willing to take so much financial risk without putting their businesses in order to survive a downturn again. The story from Morgan Stanley also says that U.S production won’t be able to step in and fill the drop in production of 1.8 million barrels a day in production that OPEC is thinking about extending past the March 2018 deadline.

         

There could be hope here...

With the rising price of oil and slower prospects in the U.S, is there hope then for pooled resources such as we have here offshore?

     Pooled resources tend to be longer lasting and with less financial risk involved with field longevity.

     If oil is supported in price by slowing U.S shale output, it stands to reason major explorers will step back into long term projects. Outside of other countries trying to develop shale resources, there’s better hope we can deliver from our own offshore.



     Fingers crossed...



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil

Tuesday, October 31, 2017

Price changes for Thursday, November 2, 2017


Hi to all,



No trick...and definitely no treat, here are the expected price changes for this Thursday, November 2, 2017:



*Heating and stove oil to increase by 3.4 cents a litre.

*Diesel shows an added 3.8 cents a litre, and...

*Gasoline shows an added 4.6 cents a litre at the pumps.



Market highlights



OPEC cuts telling?

OPEC and non-OPEC members have agreed to extend output cuts made in November 2016 well past the March 2018 end of the initial agreement.

    OPEC member Saudi Arabia first introduced cuts but were then joined by non-OPEC members Russia and Azerbaijan to total 1.8 million barrels a day in cuts which have been seen to reduce the world oversupply of crude oil. Prices have been rising in recent weeks on the news to hit $61 US as of today.



Gasoline inventories hit

Gasoline inventories took a hit in last week’s EIA inventory report with the fuel dropping 5.5 million barrels in inventory.

    What made the number even more significant was the fact that refiner capacity was recorded at 87.8 per cent. While capacity on average hits the low 90’s, the missing capacity wasn’t seen as enough to build demand. Could be a good sign of an increase in demand.

     U.S spot price for gasoline has increased five cents a US gallon since the last pricing session ended.



Canadian dollar lower

While the price of oil has risen in recent weeks, the Canadian dollar has lost ground against the US dollar, dropping almost four cents against its US counterpart since October 19th. Almost every cent increase at the pumps equals every 3/4 cent lost against the US Greenback.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil

Tuesday, October 17, 2017

Price changes for Thursday, October 19, 2017


Hi to all,



Here’s what I have for this Thursday’s price changes:



*Heating and stove oil to increase by 1.5 cents a litre.

*Diesel fuel to increase by 1.3 cents a lire, and...

*Gasoline shows an increase of 1.2 cents a litre.



           Geo-political risks have taken the front seat in the markets this week as Donald Trump’s sabre-rattling over the Iran nuclear deal continues to weigh in the markets. While groups such as the European Union say the deal is being adhered to by Iran, Trump wants a stronger deal than is present in the July, 2015 agreement signed in part by the Obama administration.

          One wonders what Trump’s plan is, but instability seems to be a part of his agenda as the Joint Comprehensive Plan of Action is said to be adhered to according to groups like the International Atomic Energy Agency and even the U.S State Department!                 

          Add to that the disruption of exports from Ceyhan, Turkey of oil from the Kirkuk region of Iraq as Kurdish fighters and the Iraqi army tussle over the region rich in oil fields. The fighting has led to an increase in the value of Brent crude and the removal of close to 600,000 barrels a day in exports from the Turkish port city.

          What will be interesting to watch in the coming days and weeks will be the response from U.S domestic production as oil prices see some height above the $50 US per barrel mark.



           That’s it for this week!



Regards,



George Murphy

Tuesday, October 10, 2017

Price changes for Thursday, October 12, 2017


Hi to all,



Here’s what I have for this Thursday’s price changes:



*Heating/stove oils show a drop of two cents a litre.

*Diesel shows a drop of 1.4 cents a litre, and...

*Gasoline shows a drop of just 6/10ths of a cent a litre.



Market highlights



Gasoline inventories climb again

As the markets and consumers recover from the effects of Hurricane Harvey, it’s also worth noting that refineries still haven’t come back to previous capacity levels before the hurricane hit the major Texas and area refining region.

   Generally believed is the fact that some refiners have used the downtime to do maintenance before the winter season hits. It’s just happening a little earlier than normal.

    With capacity still hanging around 88 per cent, capacity was recorded around 93 percent before Harvey hit. If the remaining difference in capacity comes on-line, then the added inventory could help to drop prices and possibly steady the distillate price, which has also been rising again as of late.



OPEC talks with Russia

OPEC member Saudi Arabia and Russia have both been in discussions the last few days and extending agreed-upon cuts are on the agenda.

     OPEC members along with Russia and Azerbaijan, agreed to make almost 1.8 million barrels a day in production cuts to help cut into the world’s excess of crude oil.

     According to them, the cuts are finally beginning to take hold and oil has been seeing a little bit of a boost as of late.

     It remains to be seen how long the cuts will last as previous reports have shown some OPEC members producing a little more than what was initially agreed to and U.S domestic production as well as U.S exports both continue to increase.

     As a side-note, for the third week in a row, Brent crude has been averaging anywhere between $55 and $58 US a barrel.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil

Tuesday, October 03, 2017

Price changes for thursday, October 5th, 2017


Hi to all,



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



*Heating, stove oil and Diesel fuel all show a drop of 3/10ths of a cent a litre.

*Gasoline shows a drop of 2.5 cents a litre.



Consumers to get another break at the pumps



“Consumers in Newfoundland and Labrador, New Brunswick and Nova Scotia can expect to see a break at the pumps again this week when their various regulatory authorities adjust prices”. That’s according to George Murphy of the Consumer Group for Fair Gas Prices.



Newfoundland and Labrador, as well as New Brunswick both set their prices as of Wednesday at midnight, while Nova Scotia adjusts prices Thursday midnight.



“In the wake of Harvey, we’re starting to see refiner capacity climb while gasoline inventories also rise. Gasoline inventories increased last week with refinery capacity still below what it was “pre-Harvey”, Murphy said. “With capacity still not back to those levels, it is reasonable to assume that the markets will be looking at two important factors in the equation, the first being no panic buying ahead of the storms which immediately takes pressure off gasoline, and two, the fact that we’re looking at gasoline being produced in excess while capacity is low. Almost seven per cent lower than before Harvey landed.



“I’ll be watching tomorrow’s inventory data to see if the trend looks to be continuing falling prices as refiners are also into the switch from refining gasoline to the refinement of distillates and winter gasoline blends as the weather cools. Gasoline shows a strong sign of weakening demand here, so hopefully, prices will drop further in the favour of the consumer”.



-30-



For more information, contact;



George Murphy
Twitter @GeorgeMurphyOil






Tuesday, September 26, 2017

Price changes for Thursday, September 28, 2017


Hi to all,



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



*Heating and stove oils show an increase of 1.3 cents a litre.

*Diesel fuel shows an increase of 2.2 cents a litre, and...

*Gasoline shows no changes at the pumps this week.



Market highlights

Gasoline remained relatively steady even as refined gasoline showed gains in U.S dollar terms, there was enough gain by the Canadian dollar these past two weeks to absorb any increase this week to prices.

    However, a sharp rise in gasoline prices today on the New York exchange does lead me to believe that numbers will be up slightly, all contingent on U.S inventory data that is due out tomorrow.

    Right now, gasoline shows up for next week by 1.7 cents. Stay tuned for next Tuesday’s release!



Crude oil turns higher

Crude oil prices were supported this week on two main stories, the first centering around the possible disruption of exports from Ceyhan, Turkey as infighting continues around Iraq’s major northwest oil fields control. That leaves a struggle between Kurdish and Iraqi forces for control of the northwestern located oil fields immediately ahead of a referendum seeking Kurdish independence. Turkey is threatening to close the pipeline if the vote goes ahead.



Word from OPEC also this week that saw some support for oil as they claim that OPEC-led cuts last year are beginning to bite into world supply. OPEC claims that cuts are dropping ahead of some uptick in demand from countries like China.



That’s it for this week!



Regards,



George Murphy
Twitter @GeorgeMurphyOil