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Tuesday, September 11, 2018

Price changes for Thursday, September 13th, 2018


Hi to all,



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



*Heating and stove oil to increase by 1/10th of a cent a litre.

*Diesel fuel shows no change, and...

*Gasoline shows a drop of 3.3 cents a litre.



Market highlights



No damage from Gordon

With last week’s speculation over Hurricane Gordon came the possibility of supply disruptions and refinery shutdowns.

     But in the aftermath of Gordon coming ashore near the Louisiana-Mississippi border, no damage was realised from the storm and spot prices for gasoline started to retreat. That’s one reason for the price drop in gasoline this week.

     No worries here about Florence as this storm is predicted to hit the mid-Atlantic coastline somewhere in the area of South Carolina. There are no major oil processing facilities centered in the area in question, just mainly pipeline infrastructure.

      What might cause some rise in gasoline in the coming days is hoarding of the product as any storm brings the possibility of a shortage of any supplies, including from mass purchases of gasoline.

     Check this link for oil infrastructure in the U.S along with the predicted path of Florence: https://www.eia.gov/special/disruptions/



OPEC supplies come into question again.

A remarkable scene unfolding in Venezuela as a mass exodus has started from the OPEC member and South American country.

     Last reports from Venezuela show a huge drop in exports from the country, with amounts dropping to as low as 1.3 million barrels a day from last month’s 2.3 million barrels.

     Speculators are also worried about a continued wave of violence in Libya where extremists attacked the headquarters of the Libyan national oil company yesterday causing a brief interruption to exports.

     Sanctions against Iran are also starting to take effect ahead of November as more nations back out of oil purchase agreements with Iran.

     Iranian exports continue to drop off according to the Wall Street Journal with exports dropping an additional 660,000 barrels in August. Iran exported 1.6 million barrels a day for the month.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil

Tuesday, September 04, 2018

Price changes for Thursday, September 6th, 2018


Hi to all,



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



*Heating and stove oils to increase by 1.7 cents a litre.

*Diesel to increase by 2.2 cents a litre, and...

*Gasoline to increase by 1.6 cents a litre.



Market highlights



Hurricane Gordon first to affect pricing

Speculators first started making moves in the markets as early as Thursday last week as then tropical storm Gordon was first forecast to hit the Gulf of Mexico.

      Gordon is now classed as a class one Hurricane as it’s projected path takes it ashore between Louisiana and Mississippi close to some refinery infrastructure.

      Some offshore platforms, mainly natural gas, have been shut down as a precaution.

      Rain is the principle worry along with tidal surge that has the power to shut down refinery production. While Katrina in 2005 and Rita close behind it devastated output from the region, fears have been easing a bit knowing Gordon to be a force one storm rather than 2005.

       We’ll keep an ear out for any outages if they get critical.



OPEC production up

OPEC keeps on adding production as it’s fellow member, Iran puts up with dropping exports.

     OPEC produced close to 32.7 million barrels of oil a day in August, adding 420,000 barrels a day in total production as Iran’s exports fell from 2.2 million barrels to 1.5 million barrels a day.

     Iran is subject to a round of sanctions from the U.S that has led European Union countries, Japan and India to also join in dropping Iran as a source of oil.



Newfoundland and Labrador holds off on carbon tax plan

The government of the province has said it received an extension to its deadline to file a carbon tax plan.

     Alberta recently backed out of the plan, while Ontario is laying a challenge out to Ottawa on it’s right to impose one.

     While the plan has received an extension, perhaps the province could lower the gas tax that was supposed to be removed this fall as it may be some time before a final plan comes into being.

     The final four cent portion of the gas tax from the 2016 budget remains to return the gas tax to 16.5 cents a litre, pre-budget levels.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil  

Tuesday, August 28, 2018

Price changes for Thursday, August 30, 2018


Hi to all,



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



*Heating and stove oil to increase by 3.6 cents a litre.

*Diesel fuel shows an increase of 3.2 cents a litre, and...

*Gasoline shows an increase of 2.9 cents a litre.



Market highlights



Competition takes a step backwards with Ultramar sale

Consumers have lost a lever of competition and cheaper gasoline prices in Newfoundland and Labrador this week with the sale of most Ultramar stations to Irving this past week.

     With little to no notice, the markets here in the immediate northeast Avalon area lost the second lowest retailer of gasoline products. Ultramar’s Valuemax program was an added incentive to consumers here that helped save a few more pennies for consumers, but the program has been all but erased with the sale of retail stations to Irving.

     No word yet on whether Irving will step up and have a program to replace it.

     Question for me is whether the Federal Competition Bureau stepped in to have a look at the sale of the stations between the companies to see how consumers would possibly be affected.

     That’s a question I’ll be asking “sooner rather than later”.

    



Inventories drive oil, gasoline and distillate

Last Wednesday’s inventory report from the U.S Energy Information Administration was all that was needed to light up the price of oil this past week as inventories of crude oil were seen to have dropped by 5.8 million barrels.

     Oil prices increased a rough $4 U.S in the week after the report which also saw gasoline and distillate prices increase, with speculators starting to put added pressure on distillate fuels with summer drawing to a close.

     Refineries operated at 98.1 percent of overall capacity.



That’s it for this week!



Regards,



George Murphy
Twitter @GeorgeMurphyOil

Tuesday, August 21, 2018

Price changes for Thursday, August 23rd, 2018


Hi to all,

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

*Heating and stove oil to drop by 9/10ths of a cent a litre.
*Diesel fuel to drop by 1.1 cents a litre, and...
*Gasoline to drop by 1.3 cents a litre.

Market highlights

U.S draws from strategic reserve
While oil markets this week were fixed on Iran sanctions and a possible shortfall, the U.S answered back to that possibility by dipping into it’s strategic reserve, allowing an added 11 million barrels to flow into the markets to address any shortfalls that may arise should Iran sanctions take hold.
     The move is to ensure consumers don’t get hurt as a result of any shortage in supply come this fall.
     The U.S strategic reserve contains almost 6660 million barrels of crude to use in the event of any national emergency.

Sanctions start to kick in. But will they be effective?
Iran is starting to feel the pinch of sanctions that will come into full force starting this November, with nations from the European Union, Japan and India already cutting imports from the Middle East country.
      But questions swirl from China, who only recently, placed U.S imports into China under a 25 percent tariff.  With China being one of Iran’s largest buyers, the switch is already being made by China to have Iranian crude brought in.
      While Iran has it’s treasury under threat as a result, Iran itself an OPEC member, is coming out against the oil organization, expressing concern that other OPEC members will step in and take market share from Iran to its customers in the E.U and other nations it exports to.
       The question then may very well be how long Iran will tolerate other OPEC members hijacking its market share and what would they do to prepare for such an eventuality. Could Iran leave OPEC as a result?

API reports a draw on crude supply
The American Petroleum Institute has reported a larger than expected draw on its measure of crude inventory, but the inventory report everyone is waiting on will come from the U.S Energy Information Administration’s inventory numbers noon Wednesday.
      The API data reports a draw of 5.1 million barrels, along with a reported 990,000 barrel draw on gasoline inventories.
      No word on refiner capacity numbers, however.

That’s it for this week!

Regards to all,

George Murphy
Twitter @GeorgeMurphyOil

Tuesday, August 07, 2018

Price changes for Thursday, August 9th, 2018


Hi to all,



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



*Heating and stove oils to drop by 1.3 cents a litre.

*Diesel fuel to drop by 9/10ths of a cent a litre, and...

*Gasoline to drop by 1.9 cents a litre.



Market highlights



U.S inventories

U.S inventories again weighed on the markets early in this session as the Energy Information Administration’s data showed crude inventory building against expectations of a drop.

     U.S crude gained 3.8 million barrels even though U.S refiner capacity gained during the week, rising to 96.1 percentage points as refiners tried to take advantage of an “end of the season rush”.

     Distillate inventories also increased by 3 million barrels while U.S domestic dropped slightly to 10.9 million barrels a day.



Energy East on again?

The ongoing dispute between Saudi Arabia and Canada on Friedland’s human rights tweet earlier this week has some wondering what would happen if the Saudi’s pulled the plug on exports to Canada.

     Truth is, is probably nothing...

     More likely is the possibility that some shortages may be felt in Atlantic Canada with an ongoing situation in Venezuela.

     But while these threats are out there, it reinforces the fact that they could happen and the discussion needs to happen of asking “Now what?”

      With plenty of supply in Western Canada, some are again talking about a renewed drive to make Energy East pipeline a reality instead of a dream. Security of supply should be a central concern to our country and the issue cannot be ignored. But it also means the door for opportunities in this province for the future as concerns mount on where we get our oil resources from, and what those answers could/should be.

      By the way...Saudi Arabian imports into this country amount to about nine percent, according to Natural Resources Canada.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil

Tuesday, July 31, 2018

Price changes for Thursday, August 2nd, 2018


Hi to all,



Here’s what I have for this week’s price changes, all data in:



*Heating and stove oil to increase by 1.9 cents a litre.

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

*Gasoline shows an increase of 2.7 cents a litre.



Market highlights



U.S inventories

U.S inventories of crude oil and gasoline both took hits last Wednesday as supply concerns played into markets.

     Gasoline also dropped in supply as refiner capacity also dropped to 93.8 percentage points, barely keeping up with a strong read on demand last week.

     Inventories of gasoline also dropped a full percentage point closer to their five year running average. Gasoline inventories were a full five percentage points over the five year average from the previous week.



OPEC supply up

Latest figures from OPEC show that output by OPEC member countries rose in July month, adding 70,000 barrels a day to production of over 32 million barrels.

     Oil dropped today on the news after rising on supply concerns after a Houthi rebel rocket attack on two Saudi tankers last week closed a Saudi Arabian port to exports that initially increased oil prices through the pricing session.



Gas taxes. Time to make the downward move?

Budget 2016 saw a full doubling of the gas tax to gasoline as well as an added increase to some diesel fuels.

     While most of the gasoline tax has been removed, a full four cents remains before it falls back to it’s starting point of 16.5 cents pre-budget 2016.

      Consumers have done their fair share and have carried the burden long enough, so this extra four cents should be returned back to consumers who have been fighting an uphill battle in their part to balance the books.

      It would also be a great boost to anybody finishing up holidays, giving them a break to do more summer travel as the season wanes.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil

Tuesday, July 24, 2018

Price changes for Thursday, July 26th, 2018


Hi to all,



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



  • Heating and stove oils show a decrease of 6/10ths of a cent a litre.
  • Diesel fuel shows an increase of 1/10th of a  cent, and...
  • Gasoline shows an increase of 1/10th of a cent a litre



Keep in mind that my margin for error is 3/10ths of a cent.



Market highlights



Trump keeps pushing buttons

While market focus remained mostly on possible over-supply concerns, Donald Trump’s comments on Iran to be cautious didn’t alarm the markets into raising prices-at least this time out.

     Speculators are still concerned with over-supply of the markets as Saudi Arabia was reported to have extended production well past it’s own production levels as Libyan crude also starts a slow return to the markets.

      With Saudi Arabia producing close to 10.7 million barrels a day in June month, Libya also started to send crude exports to European ports at a steady 700,000 barrels a day, adding to the over-supply concerns.

       Those concerns helped to keep Brent prices down to a rough $72 US a barrel this past seven days.



End of the driving season?

With the end of July fast approaching, speculators are now starting to turn toward the September buying contracts when focus starts to come off gasoline. With deliveries for these contracts set for thirty to forty five days out, speculators bets on summer pricing will soon start to show and consumers may start to see a steady decline in prices to “pre-summer” pricing.

     Some signs to watch for?

     Look for a steady addition to gasoline inventories in August as holidays end and school comes closer. It will be interesting to watch distillate fuels such as diesel and heating oils to see where prices may start to rise as we get closer to Fall.

      While it may appear that the gasoline season may be over, weather could still play an important role as hurricane season always brings the chance of disruption as well as rising prices in August/September.

       But another good sign comes from the U.S Energy Information Administration report from last week that showed gasoline inventories about five percent over inventories over a five year average for this time of year.



That’s it for this week!



Regards to all.



George Murphy

Twitter @GeorgeMurphyOil