Follow by Email

Tuesday, November 13, 2018

Price changes for Thursday, November 15th, 2018


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.



Market highlights



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!



Regards,



George Murphy

Twitter: @GeorgeMurphyOil

Tuesday, November 06, 2018

Price changes for Thursday, November 8th, 2018


Hi to all,



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



*Heating and stove oils to drop by 3 cents a litre. (3.5 cents)

*Diesel fuel to drop by 3.1 cents a litre (3.3 cents), and...

*Gasoline to drop by 3.8 cents a litre (3.6 cents).



            This is the last week where I will have seven day data ahead of price changes to be put out every Tuesday evening.

            This is the dataset that cost a pricey $635 US a month, the cheapest that I have found. Mind you, they have since offered to discount it 25%. Still pricey!



            Instead, as the second set of data I found is free, I will publish data based on six days data to be published on a Tuesday with a reconciliation for seven days of data later by noon Wednesday via Twitter and Facebook.

           Data basically comes a day later than what I have previously had.

           This week’s price changes shows how close the data can be based on seven days data with six day data in parentheses ().

            Where there are days that we have a “Monday” holiday, it may go on a five-day report with a follow-up based on six days.



             It’s probably the best I can do at this point, but I do hope it works out for those who avail of the information.



             We’ll know more on the accuracy in the next two weeks or so as I can compare price change data with that which will be the actual change that occurs.



Regards, and thanks for your patience!



George Murphy

Twitter @GeorgeMurphyOil

Tuesday, October 16, 2018

Price changes for Thursday, October 18, 2018


Hi to all,



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



*Heating, stove oil and Diesel all show down by two cents a litre.

*Gasoline shows a drop of five cents a litre.



*Keep in mind that winter blending may throw off the distillate numbers somewhat.



Market highlights



Saudi’s and Russians sign on to up production

When I said a couple of weeks ago that there was soft support for oil at $85 US a barrel, the news that the Saudi’s and Russians had entered into an extended production agreement confirmed it.

     With both countries in an “unofficial, secret” agreement to add production that was agreed to in September, traders saw it as a move that would only add to widening speculation of building supply worldwide, and all in spite of dropping production from Venezuela and coming sanctions against Iran.



Saudi threat over Khasoggi incident proves empty

Blogger and journalist Jamal Khasoggi remains on the missing list and Trump is appearing to back away as the Saudi’s also back down from a threat to cut it’s own production.

     Both sides now appear to use any excuse to downplay the fact that a man has gone missing in the interests of diffusing an explosive situation. A cut in production would have raised prices, but it had the potential to cause an increase in internal Saudi unrest and economic damage to the U.S, who seem to have toned down their rhetoric on Khasoggi.

     Market traders continued to send oil downwards in spite of the “threat”.



U.S crude inventories increase

The latest U.S crude inventory report last week showed a build of six million barrels, while gasoline also increased by one million.

     Distillate inventories were down by 2.7 million barrels on 88.8 percent refiner capacity, a sign that U.S refiners were heading into maintenance mode.

     With capacity down, gasoline also started to drop as demand was seen to be lower with the inventory build.



That’s it for this week!



Regards,



George Murphy

Twitter GeorgeMurphyOil

Tuesday, October 09, 2018

Price changes for Thursday, October 11th, 2018


Hi to all,



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



*Heating and stove oils to increase by 1.8 cents a litre.

*Diesel fuel to increase by 1.9 cents a litre, and...

*Gasoline to increase by 3/10ths of a cent a litre.

**Winter blending is now in effect, so distillate prices may be off slightly from the actual that will occur until springtime!



Market highlights



Irving refinery outage a warning

Consumers were given a scare this week when the Irving refinery in New Brunswick was faced with a shutdown due to an explosion and fire that caused minor injuries, but thankfully, no loss of life.

     The fact that the refinery was already in a partial shutdown mode for routine maintenance also alleviated some fears over any shortage that could have resulted in the markets of Atlantic Canada and the U.S northeast. However, there may be some possible issues if the refinery has to close for any extended period of time in the event of extensive repairs.

      The closure of the refinery that supplies most of the Maritimes and the U.S northeast also serves as a warning on what could happen if reciprocal sales arrangements that lead to the future closure of any more refineries is allowed to occur.

      The same could be said for the need for another refinery to service the region of Atlantic Canada to protect consumers and industry from any further cuts of supply. Certainly if our energy security is to be held at risk of such a possibility.



Sanction day: November 4th

Sanctions are due to kick in fully against Iran three weeks from now as pressure mounts on other countries to curtail imports of Iranian crude. The policy of sanctions by the U.S on the OPEC oil exporting country seems to be working as CNBC is reporting that exports during the first week of September have dropped again to less than 1.1 million barrels a day.

       Venezuela has also experienced a further drop in production as its economy faces almost total collapse and inflation runs amuck.

        Oil also gained as questions remain around Saudi Arabia’s ability to increase production with the Saudi’s pumping out just shy of 10.7 million barrels a day and Russia also breaking production records.



IEA warns of high oil price damage

The International Energy Agency is also putting out a note and a call to OPEC to immediately increase production before high oil prices start to cause economic damage.

     The IEA calls it a “red zone” where some say happens when U.S prices hit $3 US a gallon for consumers. The IEA is warning that higher oil prices will cause damage to growth in some of the world’s fastest growing economies.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil

Tuesday, October 02, 2018

Price spike warning: Price changes for Thursday, October 4th, 2018


Hi to all,



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



*Heating and stove oils show an increase of 3.9 cents a litre.

*Diesel adds 4.4 cents a litre, and...

*Gasoline shows an added 3.1 cents a litre.



Market highlights



Can OPEC meet demand?

With oil hitting $85 US a barrel yesterday, some are seeing further strength in oil as Iran sanctions get set to fully kick in the first week of November. While Iran is still producing, numbers are showing that output has dropped further with 1.7 million barrels a day produced from the OPEC member.

     Iran dropped close to 250,000 barrels a day since August.

     Venezuela also dropped production another 50,000 barrels a day with latest figures showing 1.25 million barrels a day.

     With OPEC production now at 32.8 million a day, some questions arose in the markets this week on whether the consortium can produce more if the markets needed it.

      The short answer may be “no”, but some are calling it a “soft ability” to respond to market needs.

       Libya remains volatile, but has maintained a million barrel a day output the last few weeks, while Russia, a non-OPEC producer, has put out almost 11.3 million barrels a day, a post-Soviet record.

        The ability of other non-OPEC producers is coming into play and that may be why some are thinking that it may be a “soft support” for $85 a barrel oil.

         Adding to the soft increase is the fact that, up to now, U.S domestic production has been stalled at 11 million barrels a day. Will we see some further growth now that oil prices have increased markedly?

         Of course, with rising oil comes higher refined product prices, and with oil increasing by almost $6 US since the third week of September, it is reflected in the numbers this week.



NAFTA 2.0 kicks in

Spurred by the signing/ratification of the new USMCA agreement, market forces had their say as speculators saw “business as usual” continuing as agreement was reached.

     Optimism amongst traders also spurred hopes that demand for oil will pick up as any shortfall felt in the economy before the agreement was reached will quickly swallow reserves and help support prices.

      The Canadian dollar has risen close on two cents against its U.S counterpart since the agreement was reached, absorbing some of the hit of rising prices this week.



That’s it for this week,



Regards,



George Murphy

Twitter @GeorgeMurphyOil  

Tuesday, September 25, 2018

Price changes for Thursday, September 27th, 2018


Hi to all,



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



*Heating and stove oils show an increase of a half cent a litre.

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

*Gasoline shows an increase of 1.2 cents a litre.



Market highlights



OPEC surprise

OPEC announced this week that their members will not step in and pick up production that will be lost from sanctioning actions against Iran.

     Unusual to see OPEC members supporting Iran by all appearances, but the move by OPEC sparked an increase to oil prices whose members said previous to this, that they would be happy to see oil prices sustained over $80 U.S a barrel.

     In the meantime, this sets up the prospect of a further rise in oil prices as production in Venezuela remains uncertain and has been falling further with political troubles in the South American country.



Trouble ahead?

With word from OPEC this week came along speculative buying that has also increased spot prices for refined products leading possibly into next week as well as oil prices have been trading over the $80 US mark for the second day in a row.

     Spot prices for heating, stove oil and Diesel are all up heading into the next session showing possible increases of two cents a litre.

      Gasoline spots are also up, showing an added 1.3 cents into next week so far.

     With Iran sanctions set to cut Iranian oil altogether, falling Venezuelan output and stalled U.S domestic output, the stage may already be set for “sustained” prices above $80 U.S a barrel oil as well as for higher refined product prices.

      OPEC is not likely to increase production with fears of creating another glut of oil in the markets, and even if sanctions were lifted tonight in Iran and the political situation in Venezuela suddenly solved its problems, production from these areas will not return quickly to solve the dilemma for consumers.

       Exactly how does anyone overcome a loss of close to four million barrels of production from the markets without someone having to pay a price for it?



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil

Tuesday, September 18, 2018

Price changes for Thursday, September 20, 2018


Hi to all,



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



*Heating and stove oils show a decrease of 1.4 cents a litre.

*Diesel shows a drop of 1.2 cents a litre.

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



Market highlights



U.S inventory data shows a little good news

At a time when there started to be some concern for rising distillate prices, there is finally good news that consumers have been waiting for: A gain in distillate inventories.

     With the onset of the fall season just around the corner, distillate prices for heating, stove oil and Diesel all took a drop at the time of year they always rise.

     But it was the startling figure of a 6.2 million barrel gain in inventories for distillates that influenced a larger than expected drop in these fuels this week as any gain in inventories this time of year would be a positive for consumers.

     Gasoline also showed a gain in inventories of 1.3 million barrels.

     Crude oil showed a loss of 5.3 million barrels on 97.6 percent refiner capacity.



$80 U.S versus trade wars

Saudi Arabia has put word out in the markets that they “would be happy to see prices for oil over $80 U.S”.

       But will that stick?...

      The signals from the Middle East country helped spark oil prices late today as oil prices rose, but later lost some of those gains.

      Concerns still mount as  to where oil prices are headed as this person sees some volatility ahead with no clear direction in pricing. An ongoing tariff “back and forth” between China and the U.S sees the possibility of China facing a slowing economy as U.S gets set to add more tariffs to Chinese imports. That means less demand for a country that is a huge factor in determination of world crude prices.

      And while all this goes on, Iran still exports product to China while the Chinese have placed tariffs on U.S crude oil coming into its borders. If China still remains as a major customer of Iran, then could we be looking at a failure in part of sanctions placed by the U.S?



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil