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Tuesday, November 12, 2019

Price changes for Thursday, November 14th, 2019


Hi to all,



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

*Heating oil, stove oil and Diesel fuel all show no changes to prices.

*Gasoline shows a drop of 1.4 cents a litre.



Market highlights



US-China trade and tariffs stall the markets

US-China trade talks have stalled and markets are eagerly awaiting word, positive or negative- that may at least give them a sense of direction.

     Markets stalled late last week as President Donald Trump denied earlier thinking that a deal was close, saying instead that “Washington wasn’t going to sign any deal that wasn’t good for the US”. Trump is on record at the Economics Club of New York just today stating that if the US doesn’t get a deal it likes, then tariffs will go up”.

     The next round of tariffs are due to be applied to almost $155 billion in Chinese goods and services on December 15th.



Iran sanctions continue

Iran is finding it harder to sell its oil on the open market because of ongoing sanctions, but it is selling some.

     Iran is running out of storage space that could create further issues in the country as it may have to cut back production.

     Iranian production was reported at 2.2 million barrels a day last month, well down from May 2018 when production was measured at 3.8 million barrels a day. Sanctions have hit hard at Iran’s bottom line with it showing in recent news that Iran needs oil to hit $195 US a barrel for the finances of the country to show balanced books.



U.S inventories

US inventories may singularly be showing signs of a growing glut and a world slowdown in demand of oil if the trend continues much longer.

     Seven of eight of the last sets of inventory data have shown growing crude oil supplies, the latest data still showing crude supply grew by an added 7.9 million barrels last week.

     Gasoline supplied dropped 2.8 million barrels while distillate supplies dropped 600,000 barrels.

     Refiner capacity dropped back slightly to sit at 86 percentage points.

The next release of inventory data happens Thursday, a day later than the usual as a result of Remembrance Day.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil  

Tuesday, November 05, 2019

Price changes for Thursday, November 7th, 2019


Hi to all,



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



*Heating and stove oils show a drop of 1.6 cents a litre.

*Diesel fuel shows a drop of 1.5 cents a litre, and...

*Gasoline shows no change in price this week.



Market highlights



US-China trade optimism

The US and China are said to be close to an agreement that could lead to resolution of the trade dispute that has cost both countries an estimated $100 billion in tariffs and fines.

    China has been asking the US to remove some tariffs that were imposed by the US as late as September as a show of optimism that a deal can be reached going forward. They may do exactly that as a measure to have Chinese tariffs on oil dropped so the US can export more, thus supporting US oil prices.



OPEC+ still mulling production cut

OPEC and non-OPEC members are still playing with the idea of a production cut as their December meeting comes closer, but the spectre of sticking to those cuts remains as pervasive as ever.

     Russia, a participant in the cuts since January has reported that they produced almost 11.3 million barrels a day of oil last month, well ahead of their own production cut as agreed to with OPEC member nations.

      The present agreement is set to end in March, 2020.



Iran rattles nerves

Iran has announced that it has added another 1000 centrifuges to refine uranium  as Iran makes further moves away from the 2015 nuclear agreement.

     Iran wants sanctions to be removed so it can avoid further damage to its economy, and according to officials that say the sanctions have been unduly harsh on the oil exporting country.

     There may be something to that as analysts say that Iran needs oil to hot in excess of $190 a barrel US just to balance the books in 2020.



US inventories

US crude oil inventories increased in the week ending October 25th, adding 5.7 million barrels to crude oil inventories.

     Gasoline lost three million barrels, while distillates dipped a million barrels.

     Refiner capacity was measured at 87.7 percent, up slightly from the last report as some refineries came back online.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil  

Tuesday, October 29, 2019

Price changes for Thursday, October 31st, 2019


Hi to all,



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



*Heating and stove oil to increase by 6/10ths of a cent a litre.

*Diesel to increase by 3/10ths of a cent a litre, and...

*Gasoline shows an increase of 1.5 cents a litre.



Market highlights



Oil prices up

As oil prices have been going in recent months, any increase in oil prices is a celebration for some speculators at a time when there hasn’t been much to celebrate.

      Over the past week, oil prices have risen about $2 US a barrel as speculators  see hopeful signs that the US and China will see an end to their trade and tariff dispute.

      Stock markets have been mostly in record territory again as traders see an increase in demand for oil if trade barriers are lifted off China.



OPEC making moves

OPEC and non-OPEC member oil producers continue to dwell on production cuts as Saudi Arabia is said to be ready to do anything to support prices.

     Already Saudi Arabia has made a preliminary move of checking on production levels in OPEC member nations to make sure they have been complying to their side of production cuts before they formally announce measures or further cuts to production quotas

     Old habits die hard as OPEC members have often been cheating on their own quotas whenever they see a fiscal advantage as prices rise. In the meantime, compliance was itself pretty good in recent months and talk amongst members and non-OPEC members indicates some willingness to institute a further round of cuts.

     Just how much they will end up cutting remains open at this time.



US inventory data

The Energy Information Administration released its weekly report Wednesday that showed a 1.7 million barrel drop in crude stocks as well as a draw in gasoline inventories of 3.1 million barrels.

     Distillate supplies also saw a draw of 2.7 million barrels.

     Refiner capacity was recorded at 85.2 percent for the week as refiners continued maintenance programs.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil  

Tuesday, October 15, 2019

Price changes for Thursday, October 17th, 2019


Hi to all,



Due to the fact that I have not received data for Friday’s market numbers, numbers may be off slightly from the actual that may occur. Here’s what I have for this week’s price changes:



*Heating and stove oil shows an increase of a half cent (5/10ths) a litre.

*Diesel fuel shows an increase of 9/10ths of a cent per litre, and...

*Gasoline shows an increase of 1.5 cents a litre.



Market highlights



US-China trade deal

The US and China are reported to be close to an agreement on tariffs, but you’d hardly think that was true according to oil’s performance the past few days.

     Speculators are laying 50/50 odds of a signed agreement by the end of October that may (or may not) return trade between the two world economic powers back to something more normal.

     Oil markets responded positively on Thursday moving higher as speculators thought an increase in oil demand would result, but it didn’t last very long.

     Chewing into details, speculators found that there wasn’t much detail and that the four foundations of the trade war weren’t even touched. China also made no mention of the agreement and still wants to see December tariffs removed before they sign onto anything.



Iranian tanker attacked

Iran has claimed that one of its tankers was attacked by missiles on Friday that helped support oil prices as tensions continued to weigh on oil markets.

     However, the attacks didn’t raise prices as much as feared, but still showed that Middle East targets abound and risk premiums remain on crude oil anywhere from the Middle East.



IEA makes a cut to forecasted oil growth demand

Just last month the US EIA made projections on lower demand and this past week seemed to be “seconded” by the International Energy Agency (IEA) as they moved downwards their forecast for any growth in demand by another 100,000 barrels a day from an initial projected growth of 1.1 million barrels a day.

     No doubt that the lower forecast signals lower demand due to world economic conditions.



US inventories

The US Energy Information Administration released inventory data again Wednesday that showed another build in overall crude oil stocks.

     Inventories of crude oil increased by 2.9 million barrels while gasoline stocks dropped 1.2 million  barrels as refiner capacity was measured at 85.7 percent for the week as some refineries remained closed for winter maintenance.

     Distillate inventories dropped by 3.9 million barrels as colder weather increased demand for heating product.

     U.S domestic oil production was recorded at 12.6 million barrels last week, an increase of 200,000 barrels.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil  

Tuesday, October 08, 2019

Price changes for Thursday, October 10th, 2019


Hi to all,



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



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

*Diesel fuel to drop by 1.3 cents a litre, and...

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



Market highlights



U.S-China talks

Speculators remain skittish over the possibility of the U.S and China reaching a settlement in their trade dispute when talks resume again on Thursday.

     The U.S has blacklisted more Chinese companies from doing business within U.S borders which may throw another wrench into things.

     The 28 companies were blacklisted for alleged human rights violations. The week previous was with optimism that a deal would be reached with Chinese officials expressing remorse that a better deal couldn’t be reached, but they would sign what was presented up to this point.



US EIA revises oil price forecast lower

The United States Energy Information Administration revised its Short term Energy Outlook (STEO) lower from what was forecast just a month ago citing the world economy and a strong building of world oil inventories as we get closer to 2020.

     Brent prices were forecast to be $5 a barrel lower than the $63 U.S that was forecast just in early September, with Brent dropping to $57 a barrel U.S in 2020. As far as I can read in the report, it doesn’t take into account rising geo-political risk such as that resulting in a production disruption in Saudi Arabia three weeks ago.



U.S inventory report

The latest report shows more refinery facilities have shut down for annual winter maintenance as refinery capacity was reported down to 86.4 percent.

     Crude inventories gained as oil throughputs halted and stocks built as a result.

     Gasoline inventories dipped by 200,000 barrels while distillates dropped 2.4 million barrels.

     U.S domestic production of crude dropped 100,000 barrels to sit at 12.4 million barrels a day.





That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil  

Tuesday, October 01, 2019

Price changes for Thursday, October 3rd, 2019


Hi to all,



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



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

*Diesel to decrease by 2.4 cents a litre, and...

*Gasoline shows a drop of 1.6 cents a litre.



Market highlights



Saudi Arabia recovery continues

Saudi Arabian oil infrastructure continues to recover after attacks by drones and cruise missiles took 5.7 million barrels a day of production capacity offline.

     The outages briefly took oil prices close to $70 US a barrel before retreating to todays close below $60 US.

     Refined prices also increased to consumers, but with this week’s drop in prices, should come close to what they were previous to the attacks.

     Saudi Arabia has announced that oil infrastructure will be ready for full production again by the start of November, and indeed, some are reporting that Aramco, the Saudi Arabian oil company has already reached pre-attack output of 9.9 million barrels a day.
      But really...
      Put this in the perspective of an attack against Saudi infrastructure twenty years ago. 
      With U.S domestic production of 5.8 million barrels a day then as compared to 12.5 million barrels a day just last week, it shouldn't be a wonder why oil prices never hit the roof. That, and the advent of other alternative energies that simply weren't "commercial enough" as what they are today, like solar and wind, have woken up some to the possibility that oil finally has competition.
     If there's any warning there for "Big Oil" from this attack, it's simply that they had better find more secure fields in "secure and stable" countries if oil is to survive as viable. Price matters, and the fact that solar and wind potential exists worldwide simply has shown that an attack against Saudi infrastructure to raise oil prices simply won't do it. There was a lot more at stake with the speed of the repairs than just to bring oil back online.
     A lot more could have been lost than just market share.



World reserves

In the event of outages, it seems the world was prepared for the worst.

     According to the International Energy Agency, world stocks of oil on government oil reserves like the US strategic reserve, amounted to 1.5 billion barrels, while private industrial-owned reserves totaled 2.5 billion barrels.

     These amounts do not include pooled reserves and discovered fields that have been left untapped, or facilities that have been shut down due to price or oversupply.

     There’s plenty out there!



U.S inventories

US crude oil inventories posted another gain last week as the Energy Information Administration said stocks increased by 2.4 million barrels.

     Gasoline stocks gained 500,000 barrels while distillates dropped 300,000 barrels as colder weather prospects increased demand there and gasoline demand tapered down.

     Refinery capacity was recorded at 89.8 percent as refiners continued fall maintenance programs.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil  

Tuesday, September 24, 2019

Price changes for Thursday, September 26th, 2019


Hi to all,



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



*Heating and stove oils to increase by 3.1 cents a litre.

*Diesel fuel to increase by 2.9 cents a litre, and...

*Gasoline to increase by 2.4 cents a litre.



Market highlights



Aftermath of Saudi attacks

Markets continued to rise sharply as continuing disruptions in Saudi Arabian oil production continued to play in the markets.

     Initial reports indicated that 5.7 million barrels of daily production was knocked offline. As this weeks session continued, it appeared, at least by Saudi reports, that the damage was “easily repaired” and that full production of upwards of 12 million barrels a day would be available by December, with 5.7 million lost production to be back online by the start of November.

     Talks of returning quickly to full production started a slow retreat in oil that still supported my predicted increases in refined product prices for this week.

     Oil prices, along with refined product prices, continued to decline as Iran sent signals that it would be ready to make changes to the 2016 nuclear agreement in exchange for the lifting of some sanctions that have hurt Iran and its economy. That, combined with Saudi Arabia’s return to full production helped turn oil prices lower in the session.

     As a side note, Houthis rebels from Yemen are also making peace overtures that have made an uneasy peace in the Middle East in recent days, while at the U.N, Britain, France and Germany all pointed the accusing finger at Iran for the attacks.

     Numbers are showing a slow, gradual retreat for gasoline prices, but still show some support for distillate prices like heating, stove oil and diesel fuel.



U.S inventory data

The latest report from the U.S Energy Information Administration shows that 1.1 million barrels of crude was added to current supplies, while gasoline and distillates also showed gains in inventory.

     Gasoline gained 800,000 barrels while distillates increased 400,000 barrels.

     Refiner capacity was recorded at 91.1 percent as some refiners started Fall maintenance programs.

     U.S domestic production was reported at 12.4 million barrels a day.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil