Hi to all,
Here’s what I have for this week’s price changes based on SIX days data. These numbers will be updated again via social media and Twitter sometime tomorrow morning when I have the seventh day. I expect these numbers to be more of a drop than what I have here.
Here’s what I have so far:
*Heating/stove oil and Diesel fuel all show a drop of 1.2 cents a litre.
*Gasoline shows a drop of 2.8 cents a litre.
Saudi Arabia to reduce exports
Saudi Arabia didn’t come right out and say it on production cuts, but they did announce a 500,000 barrel a day reduction in exports.
There is a difference...
Now OPEC officials will discuss a possible cut in production of upwards of a million barrels a day starting in 2019 to offset what some are considering as an over-supply issue.
Latest OPEC production figures show the group producing 155,000 barrels more in October month that helped offset Iranian cuts to exports by close on 50,000 barrels a month, signaling that Iran’s shortfall can be more than fulfilled in the oil markets.
Canadian dollar gets pounded
As oil sinks a little lower, the Canadian dollar has lost more ground to a strengthening U.S greenback, losing close on two cents in the last week.
For every penny lost, consumers lose about 8/10ths of a cent at the pumps as a result making a drop at the pumps a little less than what it should be had the currencies been at par.
Lower oil could exacerbate oil availability down the road
While oil prices sink lower, the prospects of supply to the markets starts to come into question as revenues fall off.
Venezuelan production had already dropped off to 1.2 million barrels a day from over two million a few years back, and is widely expected to drop below a million a day as economic and political woes weigh on the South American country. If oil slips further, problems with keeping wells producing start to show and wells begin to shut down, so much so that markets may face a shortfall in the long term
The problem already happened between 2014 as oil prices sank amidst world over-supply, and prices only began a recovery as soon as the over-supply was drawn down. Between a possible OPEC cuts in 2019, faultering production in Venezuela and a possible slowing of U.S domestic growth as a result of lower prices, oil itself may not be on such a slippery slope as some may think.
That’s it for this week!