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Tuesday, February 21, 2017

Price changes for Thursday, February 23, 2017


Hi to all,



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



*Heating and stove oils show a drop of 2/10ths of a cent a litre.

*Diesel fuel shows a drop of 4/10ths of a cent, and...

*Gasoline shows a drop of 1.8 cents a litre.



Market highlights



Forget a collapse in oil. How about a collapse in gasoline?

   It may sound funny immediately before the spring run-up in gasoline prices that happens starting this time of the year, but data from the US Energy Information Administration seems to be pointing the way towards an extended drop in gasoline-that is, if demand doesn’t pick up soon.



   Data from the EIA indicates that US gasoline inventories are at their highest since the EIA first started recording gasoline inventory data back in 1990.



    Secondly, while gasoline production hangs around 9.5 to 10 million barrels a day, and with refinery capacity down to 85% due to refinery maintenance, even a drop in capacity to 9.3 million barrels a day still shows a build in inventories. Demand for January hung around 8.2 million barrels a day, itself a strange anomaly in a usually busy US economy, blowing up inventories in the US northeast to record levels.



     So, with those factors, with refineries shortly coming back into production, if demand doesn’t pick up in the interim to swallow up bulging inventories, then prices can’t be expected to climb appreciably heading into late spring and early summer.



     Inventory data is going to be the focus the next few weeks.



US rig count climbs again

     While US domestic production remained steady last week hovering close to 8.977 million barrels a day, the US rig count climbed again last week as more small producers got back into the markets. The rig count showed that another ten rigs went back to work last week with oil holding steady and OPEC compliance registering close to 90%.



     That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil





Tuesday, February 14, 2017

Price changes for Thursday, February 16, 2017

Hi to all,

Here’s what I have for this week’s price changes. Keep in mind that heating oil as well as Diesel numbers may be off slightly due to winter blending.

*Heating and stove oils show a drop of 3/10ths of a cent a litre.
*Diesel shows an increase of 2/10ths of a cent a litre, and...
*Gasoline shows an increase of 1.6 cents a litre.

Market highlights

API reports another huge inventory build
     While some may have been expecting a drop in gasoline and oil prices this week, it was left to the imagination as to why prices didn’t fall with a huge inventory build last week.
     However, the American Petroleum Institute is again reporting a huge build in inventories ahead of the US Energy Information Administration’s report due tomorrow at noon, this time by 9.98 million barrels.
      Last week, in digging down through the evidence, it was found that while there was indeed an inventory build, it was mainly caused by the movement of oil in storage in the Houston shipping channel with that oil coming ashore, as well as a build in imports in the US northeast that caused the issues.
      Sad to say, I fear the markets are running out of excuses for the inevitable fall in oil that will occur with such inventories building as they are. Oil right now is on borrowed time, artificially held up with market excuses like “ a perceived” increase in demand.
      Demand may seem to be up when we see a draw-down in inventories of gasoline, but it’s a hard fact to stick by when you see capacity dropping at such a rate that itself affects inventories. Gasoline inventories from the industry-led group are also up. What will be the excuse next week?
      It’s kind of like buying a used car and not having the down payment. You don’t’ have to have a cent in your pockets, but the papers can be worked so you have it on paper to make the purchase. You still know you’re going to have to pay for it in the end.
      The oil markets may have to get ready for the shock.

US rig count up yet again
     While US domestic production creeps closer to nine million barrels a day, the US rig count is up yet again this week according to Baker-Hughes, this time up by another 12 rigs.
     US domestic oil production should hit the “magical”9 million barrel a day mark either later this week, or next week, that should have OPEC taking a keener eye as they lose a little more market share from US exports.

That’s it for this week!

Regards,

George Murphy
Twitter @GeorgeMurphyOil

Wednesday, February 08, 2017

Price changes for Thursday, February 9, 2017


Hi to all,



Here’s what I have for this week’s price changes. Keep in mind that winter blending may throw off the Heating/stove and Diesel numbers from the actual that may occur:



*Heating and stove oils show an increase of 9/10ths of a cent a litre.

*Diesel shows an increase of 1.1 cents a litre, and...

*Gasoline shows a drop of 7/10ths of a cent a litre.



Market highlights



US shale having an impact

    Recent inventory reports seem to confirm what was predicted months ago, that the US shale and tight oil industries would be quick to respond to any cuts implemented by OPEC and some non-OPEC producing countries. With growing inventories, particularly the last three weeks, oil prices have seen more downwards pressure as inventories have continued to grow.

    Pressure is also coming off gasoline as demand has tailed off, leaving gasoline inventories with growth twice as much as what was expected.

    US rig counts also continue to climb as investors of small-time producers have entered back into the markets to fill the gap left by the November cuts.



API report shows a massive build in inventories

     The American Petroleum Institute, an industry related group released their weekly inventory report which should be quite alarming, if you’re an OPEC member.

     The group’s report showed a massive crude inventory increase of 14 million barrels this evening which should impact prices in electronic trading before the market open.

     Gasoline inventories also showed an increase of 2.9 million barrels, well more than double market expectations, that should impact spot prices for gasoline over the next week.

     A clearer picture of what is happening out there will be drawn from the US Energy Information Administration’s own inventory report which will be released around 12 noon NST.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil

Tuesday, January 31, 2017

Price changes for Thursday, February 2, 2017


Good evening to all,



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



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

*Diesel shows a drop of 9/10ths of a cent a litre, and...

*Gasoline shows a drop of 2.4 cents a litre.



Market highlights



US/Canadian oil continues to rebound

     As I predicted would happen some months back, the US oil industry continues to rebound to fill the gap left wide open by OPEC and non-OPEC production cuts.

     Again this week, US rigs have continued their return to the field with the addition of another 15 rigs back into production and exploration.

     Sources in Alberta also continue to show a good rebound starting within the oil industry there, especially moreso with the stability that oil has shown in recent weeks.



Inventories continue up for oil and gasoline

     Last week’s inventory report from the Energy Information Administration continues to show good builds in gasoline inventories, one of the chief reasons why gasoline prices will see their fourth drop in a row since their peak during Christmas/New Year’s travel demand.

     With refiner capacity again showing retreat, Gasoline inventories climbed by another 6.8 million barrels. That figure is pretty important when you consider the fact that refiners were throttling back on production.



That’s it for this week.



Regards to all.



George Murphy

Twitter @GeorgeMurphyOil

Wednesday, January 25, 2017

Price changes for Thursday, January 26, 2017


Hi folks!

Better later than never, but here's what I have for this Thursday's price changes. Keep in mind that winter blending will throw off the Diesel and heating/stove oil numbers somewhat:

*Heating/stove oils show a drop of 4/10ths of a cent a litre....
*Diesel shows a drop of a cent a litre, and...
*Gasoline shows a drop of 1.8 cents a litre.


Market highlights

US inventories increase
      Last week's inventory read from the US Energy Information Administration saw a 2.3 million barrel increase in crude oil, but the real news to hit the markets was written in the gasoline inventory numbers.
      Gasoline inventories reported a growth of six million barrels last week, much higher than expected, but not a real surprise as it comes at the end of the Christmas travel season.
      What was evident in the report was a noticeable drop in the refiner capacity numbers which saw a three percentage point drop to just shy of 91 percent.
      While refineries throttled back, gasoline increased in inventory.
      The markets immediately responded with a drop that stayed relatively steady through the week to what we have for Thursday.


US rig count shows a sharp increase
      The weekly US drill rig count showed a huge increase last week that proves a lot of smaller producers are getting back in the game.
      The US rig count showed its' largest weekly increase since April, 2013 with the rig count jumping by 26 additional rigs in the field.
      Look for Western Canada to start getting busy again as production costs are slightly lower due to the dollar difference with the U.S.


      I'll leave it at that for this week!

Regards,

George Murphy
Twitter @GeorgeMurphyOil

Tuesday, January 17, 2017

Price changes for Thursday, January 19, 2017

Hi to all,

Here's what I have for this week's price changes. Keep in mind my margin for error of 3/10ths of a cent when you look at that heating/stove number!

*Heating and stove oil shows an added 2/10ths of a cent a litre.
*Diesel fuel shows a drop of a penny a litre, and...
*Gasoline shows a drop of 1.1 cents a litre.

Highlights

Majors moving to land
      In what is probably a sign of the times, large oil companies are beginning to make a move to shore where lower expenses to get into the oil game show more promise.
      A good example of this is a new acquisition of drilling rights by Exxon/Mobil who, with a few billion dollars more, have made a major expansion into the Permian basin in New Mexico.
Estimates are already in showing an estimated 3.4 billion barrels of reserves in the acquired property.

International Energy Agency and a possible flood of oil
       It took them long enough...
      The International Energy Agency is looking at a huge increase in US oil exports to begin just in the next few months that could be the spark to start another oil war for market share with OPEC.
      Because oil prices have hit a level where some profits can be made, the IEA is predicting that US domestic production will be quick in to fill the gap left by OPEC production cuts.

    Look for oil prices to stay "loopy" for the next little while in what could be the lead-up to another price war!

That's it for this week!

Regards,

George
Twitter @GeorgeMurphyOil

Tuesday, January 10, 2017

Price changes for Thursday, January 12, 2017


Hi to all,



Here’s what I have for this week’s price changes, keeping in mind winter blending which may throw off the distillate numbers somewhat.



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

*Diesel fuel shows a drop of 2.7 cents a litre, and...

*Gasoline shows a drop of 3.2 cents a litre.



Media release



Conception Bay South, NL, January 10,2017- “It may be the start of a decline in prices that, if market sentiment sticks around, could lead to steeper drops in price in the next few weeks.“ That’s according to George Murphy, group researcher for the Consumer Group for Fair Gas Prices.



“Speculators for the last six weeks have played up oil prices with the fact that OPEC has stepped in and made substantial cuts to production, but the fact that they left a gaping hole for other producers to step into, may very well be coming back to bite them. As predicted would happen, smaller US domestic producers seem to be coming back into the market, and that is beginning to show in the U.S rig count and worldwide.



“It’s not just from the U.S that I am seeing a quick return to the markets. Worldwide, the rotary rig count increased last week by another 94 rigs, sparked by restarts in Canada and other centres where shale resources were previously being explored. World-wide, that amounts to 1772 rigs operating, with last week’s return of 94 rigs, the highest increase week-on-week that I have seen.



“Doubts about the ability of oil to maintain present pricing levels are permeating the markets, at least for the time-being, and that’s the basis for some relief for consumers this week. OPEC member compliance is also an important factor with both Libya and Iraq exports beginning to climb.



“The Canadian dollar also is a factor this week, rising in value against the U.S greenback in the face of falling oil-at least for the time-being. The Canuck Buck has gained almost three cents in the last two weeks as a result of a mostly positive Canadian jobs report last week. A rising Canadian dollar against the U.S greenback has the tendency to drop prices further.”

                                                                                                        -30-



For more information, contact:



George Murphy
Twitter @GeorgeMurphyOil