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Tuesday, July 17, 2018

Price changes for Thursday, July 19th, 2018


Hi to all,



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



*Heating and stove oils to drop by 2.6 cents a litre.

*Diesel fuel to drop by 2.7 cents a litre, and...

*Gasoline to drop by 1.4 cents a litre.



Market highlights



Saudi Arabia turns on the taps

A week ago it wasn’t thought possible that we would see a dramatic reversal in the markets as Saudi Arabia was found to have already broken it’s deal with fellow OPEC and non-OPEC producing nations. But according to last week’s production numbers, the Saud’s produced more oil onto the markets that helped send oil prices down.

     Saudi Arabia produced more than 10.7 million barrels a day in June month, according to figures released by OPEC, and all in spite of reaching an accord with other members to add just 600,000 barrels a day to the markets in an “effort” to prevent prices from rising. That news played into the markets through late last week.

     Also adding to the downwards pressure on prices was the news out of Libya that showed an uneasy peace agreement that would start exports from the African country amounting to 700,000 barrels a day, just shy of half its original production, a move that forced Brent prices lower.



Trump adds weight

Meanwhile, on this side of the world, Donald Trump talked about the possibility of releasing crude oil to the markets from the U.S strategic petroleum reserve, a move that some see as a quick attempt to get other OPEC members to fall in line with adding production. The reserve contains a rough 660 million barrels of oil held in the event of use during a national emergency.

     The idea weighed heavily on the markets this week as oil lost ground, WTI losing about $6 US over the past week and Brent dropping by close on $7 US.



U.S inventory report largely ignored

In spite of a U.S Energy Information Administration report that saw a draw of over 12 million  barrels, oil prices moved the opposite way as concerns over shortages disappeared in minutes.

      The report also showed a balance between refiner capacity of 96.7 percentage points and a drop in gasoline inventories of just 700,000 barrels of product.



That’s it for this week!



Make it a good one...



Regards,



George Murphy

Twitter @GeorgeMurphyOil

Tuesday, July 10, 2018

Price changes for Thursday, July 12th, 2018


Hi to all,



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

*Heating and stove oils to drop by 1.2 cents a litre.

*Diesel fuel shows a drop of 1/10th of a cent a litre (no change) and...

*Gasoline shows a slight drop of 8/10ths of a cent a litre.



Market highlights



Saudi’s turn on the taps

OPEC member Saudi Arabia surprised everyone, including fellow OPEC member with the release of production figures earlier this week that caught even the markets off-guard.

      Saudi Arabia produced almost 10.7 million barrels a day during June month, up from 9.98 million barrels in May, and most of it ahead of the June 22nd meeting of OPEC and non-OPEC members who only then agreed to increase production.

      Venezuela was the big loser of production amidst internal problems as production there slipped below 1.4 million barrels a day from an average daily production of 2.91 million barrels a day in 2017.

       OPEC still has a long way to go to meet the shortfall in oil worldwide, but it is widely believed that only the Saudi’s can meet any needed production immediately to the markets.



Oil markets remain mostly “neutral” this week

The latest U.S Energy Information Administration inventory report, while nothing to cheer about, at least didn’t give speculators reason to celebrate.

      With refiner capacity down slightly by 4/10ths of a percentage point, crude oil inventories showed a slight increase of 1.2 million barrels all amidst market chatter of significant crude shortfalls and supply outages.

       Also, with the drop in capacity came a very slight decrease of 1.5 million barrels of gasoline, showing that production is close to meeting any demand for product out there.

       Prices remain at a balance at a critical time however, as any drop in refiner capacity will have to be met with an increase in product in order to avoid any increase to consumer prices. That may be hard as consumers hit the roads for the holidays.



Canadian dollar up slightly

The Canadian dollar increased slightly against it’s U.S cousin over the past week, rising  close on 1.5 cents against the greenback.

      With prices for refined product also staying mostly fixed over the past seven days, the dollar increase translated to a corresponding drop in prices, mostly affecting heating oil and gasoline prices.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil

Tuesday, July 03, 2018

Price changes for Thursday, July 5th, 2018


Hi to all,



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



*Heating and stove oils to increase by 2.5 cents a litre.

*Diesel fuel to increase by 2.3 cents a litre, and...

*Gasoline to increase by 3.5 cents a litre.



***



Consumers to get hit at the pumps this week



Conception Bay South, NL, July 3rd, 2018 – “Consumers in Newfoundland and Labrador, Nova Scotia and New Brunswick can all expect another hit at the pumps this week as shortfalls in oil and pressure on gasoline supplies mount”.

      That news from George Murphy, group researcher with the Consumer group for fair Gas Prices.



     “A quick look at the inventory data for last Wednesday was enough to put some added pressure on oil and refined commodities this past week as oil inventories took a hit as supplies from Alberta to the U.S were curtailed due to an outage at the Syncrude facility there. It took 350,000 barrels offline. Match that with doubts around Saudi Arabia’s ability to keep ahead of supply disruptions from both Libya and Venezuela, and we have another recipe for rising prices”. Murphy said.



     “To complicate matters further, we haven’t even considered the costs with Trump’s sanctioning of Iran in November taking an additional 500,000 barrels a day offline from U.S imports.



     “Gasoline inventories, while up slightly last week, were still tempered with the fact that refiner capacity was recorded at well over 97 percentage points, barely keeping ahead of demand. The capacity number also sucked a lot of crude through the pipes, dropping supplies by over nine million barrels in the last week. We’ll see new inventory data tomorrow to see if this trend continues. If it does, I’d be extremely worried!



     “Numbers aren’t looking good for Heating and stove oil users as spot prices are a rough thirty cents a litre than the same time in 2017. What cost a rough 47 cents on the New York markets last year now cost 72 cents today. That, and taxes adds up to a lot of money, or almost $270 to fill the oil fuel tank. If that doesn’t say something to consumers, then I don’t know what will. Gasoline numbers are no different seeing an increase in spot prices by close on the same, this time by 26 cents over last year, or a rough $16 based on a sixty litre fill-up”.



     “All of a sudden, there’s trouble ahead. If supplies don’t return to normal, inventories don’t climb and the dollar stays low, then consumers will have trouble for the foreseeable future. It could be a colder than usual winter.”



-30-



For more information, contact:



George Murphy

Twitter @GeorgeMurphyOil

Tuesday, June 26, 2018

Price changes for Thursday, June 28th, 2018


Hi to all,



Here’s what I have for price changes for Thursday, June 28th, 2018:



*Heating and stove oil to increase by a cent even.

*Diesel fuel to increase by 6/10ths of a cent per litre, and...

*Gasoline shows an increase of 9/10ths of a cent a litre.







Markets show a slight increase in the works



“Expect to see a small increase in prices across the board as markets react to shortfalls of oil in the last days of the pricing session.” That word from George Murphy, group researcher with the Consumer Group for Fair Gas Prices.



“For the first time since the U.S Memorial Day holiday weekend, consumers here will see a slight increase in prices due mainly to sudden shortfalls in expected crude oil output.” Murphy said. “OPEC and non-OPEC suppliers got together last weekend and agreed to supply the markets with an additional million barrels a day to help keep prices at the $70 U.S range where OPEC wants it, but they’re having problems just getting 600,000 barrels back online.”



      Latest word with Libya and Venezuela also spells trouble as they are having issues getting crude into the markets; Venezuela because of civil unrest and Libya, because of fighting that has closed its two major ports for oil export.



      “Enter Donald Trump who has expectations for all European Union nations to adhere to Iranian sanctions that Trump says will be brought in by November 4th, removing another 500,000 barrels from U.S imports,, and you have a recipe for rising prices. To top it all off, draws are expected against U.S West Texas Intermediate crudes as a electrical fire has caused a major disruption of exports of crude from Alberta with the shutdown of Syncrude’s 350,000 barrel a day refinery in Alberta.



      “In very short order, over the past week, we have a shortfall in crude oil that is real, and shows just how sensitive the oil markets really are. While some crude prices have risen sharply, I expect that refined prices will follow soon, but only if inventories of refined products are affected. The truth being that, as some crude oil supply has been hit, consumers may also be at risk in the coming days as supply cannot meet demand in the major refining areas-and it is summer, the time of greatest gasoline demand.”



-30-



For more information, contact:



George Murphy

Twitter @GeorgeMurphyOil

Tuesday, June 19, 2018

Price changes for Thursday, June 21st, 2018


Hi to all,



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



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

*Diesel fuel to drop by 2/10ths of a cent a litre, and...

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



Market highlights



Canadian dollar keeps slipping

The Canadian dollar lost almost three cents against the U.S greenback as Trump’s tariffs on this country weighed on our currency.

     That, higher interest rates and a strong U.S unemployment number of 3.8 percent reported last week has thrown strength behind the U.S greenback raising it to levels against our currency not seen in a few years. The fall of the dollar has cost consumers about 2.5 cents at the pumps this week alone.



OPEC meeting June 22nd on production cuts

Both OPEC and non-OPEC members will meet in Vienna, Austria to discuss the return to the markets a 1.8 million barrel a day cut to production that was meant to erase a perceived glut in oil stocks.

      OPEC now wants to add in their end of cuts amounting to 1.2 million barrels first announced in November of 2015. Russia and Azerbaijan also added to the overall production cut by adding 600,000 barrels to the move.

      But some member nations of OPEC aren’t so hasty in adding the full 1.2 million. Some are seeking an addition of between 300,000 barrels and 600,000 barrels as a more positive move to support oil, while Saudi Arabia worries about the loss of Venezuelan production as a need to add the full 1.2 OPEC end of production.

      The ‘back and forth’ over what the actual addition will be has added both up and down volatility to the oil markets this past week.

      We’ll find out on Friday what they will do.



U.S inventory report

U.S domestic production increased by another 100,000 barrels a day to hit 10.9 million barrels a day as higher prices have led to new rigs back in the oil patch.

      U.S crude oil saw a drop in supplies by 4.1 million barrels and gasoline also dropped by 2.1 million barrels as consumers started buying again as prices fell at the pumps.

      Refiner capacity was gauged at 95.7 percentage points as refiners saw good margins.



That’s it for this week!



Regards to all,



George Murphy

Twitter: GeorgeMurphyOil

Tuesday, June 12, 2018

Price changes for Thursday, June 14th, 2018


Hi to all,



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



*Heating and stove oils to drop by 6/10ths of a cent a litre.

*Diesel fuel to drop by 8/10ths of a cent, and...

*Gasoline shows another drop of 1.4 cents a litre.





Prices to drop across the board



“Consumers in Newfoundland and Labrador, New Brunswick and Nova Scotia should see a rarity in the world of oil prices and refined products: a third week in a row of dropping prices.”

     That’s from George Murphy, group researcher with the Consumer Group for Fair gas prices.



    “U.S inventories reported last Wednesday, the first day of the pricing session, showed what appears to be the impact of higher prices on consumers in the form of building gasoline inventories as consumers conserve as a result of high prices. We’re optimistic that prices will keep dropping, but consumers will eventually get used to a high price and turn back to buying again. I’m hoping that they will continue to impact inventories by going light on the gas pedal!”

       “It’s what I like to call ‘enforced conservation’, where consumers revolt for a short period of time as prices for refined product become unaffordable.”

        As reported by the U.S Energy Information Administration, gasoline inventories climbed an unexpected 4.6 million barrels, while crude oil also climbed by 2.1 million barrels as domestic production also hit 10.8 million barrels a day in the U.S.

        Distillate fuels also reported increases of 2.2 million barrels, a fuel group that includes heating oil, stove oils and Diesel fuel.

       U.S domestic production of crude oil hit 10.8 million barrels in the data last week.



-30-



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil

Tuesday, June 05, 2018

Price changes for Thursday, June 7th, 2018


Hi to all,



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



*Heating, stove and Diesel fuel all predicted to drop by 1.9 cents a litre, and...

*Gasoline to drop by two cents a litre.



Market highlights



OPEC to meet June 22nd

OPEC and non-OPEC producers will meet towards the end of the month to discuss formally increasing production back to more “normal” production levels.

     OPEC and non-OPEC producers met in November 2015 and agreed to institute a production cut that added up to 1.8 million barrels a day in an effort to absorb a glut in world oil estimated to be close to 3 billion barrels of supply. The move to cut production, OPEC believes, has worked to “return the market to balance” and now they want to add production to prevent oil prices rising past the $70 U.S a barrel mark in an effort to keep other producers, particularly shale producers from entering the market.

     Because of political turmoil in Venezuela, production has dropped to 1.4 million barrels a day from a recorded high of 3 million barrels a day in 1997 to today’s 1.4 million barrels a day. OPEC also wants to meet the shortfall in production there and Nigeria in order to “control rising prices”.



Market watching

*U.S EIA inventory report for Wednesday. Watch for signs of building crude as more domestic production is added. Second factor worth watching as a signal of consumer sentiment will be gasoline inventory numbers. As prices have risen, we’ll get a better sense of consumers’ feelings on prices at the pump. A build in inventory will send a strong signal that consumers are reigning back on consumption and could signal further signals that prices will retreat.

*Baker Hughes Friday rig count: If the number of rigs increase, it will signal new entrants into the oil patch, sending further signals of growing U.S domestic production.

*OPEC monthly production: Any signals that OPEC production may have already been signaled to members could have been detected in May total sales. If not, a robust growth in production should be picked up in the next report during the first week of July for June month.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil