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Tuesday, August 23, 2016

Price changes for Thursday, August 25, 2016

Hi to all,

As predicted, there's not much change in the numbers.

All are up.

Here's what I have for this week's price changes:
*Heating and stove oils to increase by 3.9 cents a litre.
*Diesel fuel to increase by 3.8 cents a litre, and...
*Gasoline shows an added 4.8 cents a litre at the pumps.

Market highlights

Iran to join talks in Algeria
*In a surprise to the markets today, Iran is said to have written a letter to fellow OPEC members letting them know that they will join talks with other OPEC and non-OPEC members in the possibility of instituting a production freeze.
     World oil producers are still trying to deal with an excess of supply in the markets, and it is widely believed that a freeze in worldwide oil production will help alleviate the present drop in prices.
The news today help take oil prices out of negative territory and oil ended with a gain on the day.

Oil inventories lower
Last week's inventory news out of the US was for some a surprise as buth oil and gas supplies took a dip last week all against market expectations.
    Gasoline inventories took a drop of 2.7 million barrels in last week's report with oil also down by 2.6 million barrels.

I'll leave it at that for this week.

Regards to all,

George Murphy
Twitter @GeorgeMurphyOil

That was the release I sent out a little while ago...

The news out of Iran today was a little surprising, I will admit.

In case you missed it, the Iranians are now talking about attending the "freeze" meeting set for Algeria in late September...

Curious though is the effect of making an announcement like that today a full month ahead of the scheduled meeting. Perhaps the Iranians now know what kind of influence the now hold in the markets, but even more curious knowing that they have been taking on the Saudi's at their own game with discounting to their favorite Asian customers almost a side-act.

Be that as it may, Iraq still enters a new realm in the markets with their announcement the other day that they have reached an export deal with the Kurds in the north where exports have been shut in from the Kirkuk fields. With oil down yesterday on the immediate addition of upwards of 200,000 barrels a day in output, it was no surprise to see Iran respond with their own "influence" shot to gain back some attention again.

But keep looking south, but not just south...

With rising oil, US rig counts have again increased for the tenth week out of eleven measured. The fact that oil is still supported close to $50 Brent and $48 WTI, tells me to expect another week of a double-digit increase in rig counts in the next week or two. Resiliency is showing itself in the US and may turn out to be the factor that shuts down any increase (or prospects of) in the price of a barrel of oil.



Tuesday, August 16, 2016

Price changes for Thursday, August 18, 2016

Hi to all,

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

*Heating and stove oils show an added 3.2 cents a litre.

*Diesel shows an increase of 2.7 cents a litre, and...

*Gasoline shows just a 1/10th of a cent a litre increase.

Market highlights

As oil prices rise, affects can be seen and are all the focus of the update this week...

With OPEC talking about taking another extraordinary measure to freeze production, speculators are betting that, this time, the move to impact on the abundance of oil in the markets will work this time.

    *OPEC will meet in Algeria on September 28th to discuss the possibility of a production freeze. Other non-OPEC producers like Russia, have shown an interest in cutting back or freezing production in an effort to support oil prices and increase revenues.

    *Oil prices have increased a rough 12 percentage points since the last price setting, an increase of $5.65 over the last week as a result.

     *The Canadian dollar has increased in value against the US greenback, rising close to three cents from $1.30.6 cents to today’s noon rate of $1.28.6 as oil prices have increased.

     *What is obvious by the numbers this week is a market focus on distillate fuels that have shown a major increase this week, and numbers that are also pointing towards a potential  increase again for next week ahead o the fall season.

      *With attention now off the gasoline selling season in the US, gasoline numbers are showing a barely visible increase at the pumps this week. You can see where refiners have been losing in the game this past summer with gasoline spot prices remaining relatively steady against the increase in oil prices this week.

I’ll leave it at that for this week!


George Murphy

Twitter @GeorgeMurphyOil

Tuesday, August 09, 2016

Price changes for Thursday, August 11.2016

Hi to all,

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

*Heating and stove oils show an added 1.1 cents a litre.

*Diesel fuel shows an additional 2.1 cents a litre at the pumps, and...

*Gasoline also shows an added 1.1 cents a litre.

Market highlights

OPEC talks about holding production cuts meeting

Some OPEC members are again talking about the possibility of putting “further” production cuts in place after watching the fall of oil again this week. Member countries like Venezuela are struggling in the tide of falling oil with the Mediterranean OPEC member swimming in a mounting tide of debt because of faltering oil prices.

     Russia is also keeping in mind how low oil has cost their own economy and are again also keeping the possibility of production cuts in mind for a possible September meeting.

     But the possibility of cuts doesn’t seem to hold water in some circles...

     Both Iran and Iraq have been discounting oil prices to their Asian customers against their fellow OPEC member Saudi Arabia. After an initial rise in oil prices, markets were again in retreat today.


US domestic rig count rises again

     For the ninth week in ten, US domestic rig counts were up again, in spite of oil’s fall. With oil still showing all the signs of sliding further into bear territory, the number of small oil companies returning to the oil patch continues to show slow but steady growth in spite of low oil, and it’s the biggest bone that the OPEC dog has to contend with. Any discussion of talks cannot happen, or round of cuts stick, without seeing any kind of return of the power that US domestic resources holds.

      With rising rig counts worldwide, OPEC runs the risk of losing their own market-share, and thusly, their former world economic influence. Any gap in production will be quickly met with industry response.

US inventories

Last week’s US inventory report out of the Energy Information Administration showed a surprise draw against gasoline inventories of 4.3 million barrels. While ample gasoline inventories remain well over the five year average, a surprise draw was enough to bolster speculators into boosting gasoline prices this week.

That’s it for this week!


George Murphy

Twitter @GeorgeMurphyOil

Tuesday, August 02, 2016

Price changes for Thursday, August 4, 2016

Hi to all,

Final numbers...

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

*Heating and stove oil predicted to decrease by 3.3 cents a litre.
*Diesel fuel to decrease by 3.2 cents a litre, and...
*Gasoline to drop by 1.6 cents a litre.

Market highlights

Saudi Arabia discounts
Saudi Arabia has started again to discount to it's Asian customers as the selling war against Iran has again escalated. Since Iran's return to the open markets after the lifting of sanctions, I predicted then that it wouldn't take long before Iran starts to pick a fight in an effort to gain back its own lost customers from the first placement of sanctions a few years back.
     Looks like this fight is going to be worth keeping an eye on for its European connection!
     Read on!

Libya back in it
Libyan production is coming back on with the end of violence in four key export centers from the North African nation. Analysts are saying to expect anywhere between 150,000 barrels to 450,000 barrels immediately into the world markets with an increase to 900,000 barrels of oil almost certainly directed at the European and Asian markets.
      Let there be no mistake that, in a few weeks time for exports to reach Europe, and excess supplies will be certain to hit Brent prices more so than West Texas Intermediate. There will be some discounting in Europe to come!

Nigeria back in
With the Nigerian government agreeing to start paying rebels a share of oil royalties (it's not that unusual), expect to see an increase mostly to the US of light sweet crude into the US eastern seaboard. With production showing some resilience in the US in spite of retreating prices, look for the US to build oil inventories that might show a continued glut will carry on in spite of any producers best efforts.
      It was November of last year that it was estimated that the world had in excess of three billion barrels of oil to be consumed before we were free of the oil glut.
      Just a few reasons why we won't see any recovery in prices anytime soon.

That's it for this week!

George Murphy
Twitter @GeorgeMurphyOil

Tuesday, July 26, 2016

Price changes for Thursday, July 26, 2016

Hi to all,

Here's what I have for price changes for this week!

*Heating and stove oils show a slight drop of 8/10ths of a cent a litre....
*Diesel fuel shows a slight drop as well of 6/10ths of a cent a litre, and...
*Gasoline is also down this week, but just by 3/10ths of a cent a litre.

Market highlights

Crude drops again
      Monday this week saw another drop in crude oil as market analysts have a renewed fear over crude oil over-supply continues to sway oil prices.
Latest API inventory data from the industry-led group shows a less than expected drawdown on crude oil inventories.
      No surprise here, but the real confirmation may come from the US Energy Information's Administration's inventory data when it is released tomorrow noon our time. Another reported build in inventory, or smaller than expected drawdown on inventories of crude, may very well extend the recent slide in crude oil prices.
     Weak demand for gasoline and indications of a huge surplus in gasoline and distillate supplies has also played in to the latest drop in crude oil prices.

Canadian dollar moves lower
      With lower oil comes a lower Canadian dollar, with the Canuck Buck dropping a full two cents against the US greenback over the past three days since oil's slide.
      The Canadian dollar was measured at $1.3209 against the US dollar at noon today.

Rig counts up again
      The US rig count was up again last Friday, and it is probably a huge indicator of just how robust the smaller producers have become in the face of lower prices. The rig count rose another 15 rigs last week, up again for the seventh week in a row.

That's it for this week!

George Murphy
Twitter @GeorgeMurphyOil

Tuesday, July 19, 2016

Price changes for Thursday, July 21, 2016

Hi to all,

Final numbers for this week are actually not far off from last night's posting. Here's what I have:

*Heating and stove oils show a drop of 2.1 cents a litre....
*Diesel fuel shows a drop of 1.5 cents a litre, and...
*Gasoline shows an increase of 7/10ths of a cent a litre.

Market highlights

Gasoline to drop next week?
     An after hours American Petroleum Institute inventory report sent gasoline futures lower as the industry report showed a build in gasoline inventories that lends further support to weaker demand for gasoline than industry speculators thought. When the industry starts sending out signs of weak demand, you know there's a "problem" with demand.
     Inventory reports out of the US Energy Information Administration in recent weeks has been showing the same sign of weak summer demand that has played well into lower prices (except here because of the added tax).

Distillate drops ahead of September buying contract
     Distillate prices in the trading markets are down again this week, ahead of the September buying contract. Inventories of heating, stove oil and diesel fuels are all well above last years levels for this time of the year and show promise of potentially lower prices for those fuels to consumers if the trend keeps going.
     Stocks are presently about twelve million barrels ahead of last year's mark. With refinery capacity close to 93 percent, I expect there to be more additions to inventories of distillate that will mitigate any increase to consumer prices...At least for the time-being!

That's it for this week!


George Murphy
Twitter @GeorgeMurphyOil

Tuesday, July 12, 2016

Price changes for Thursday, July 14, 2016

Hi to all,
Here's what I have for this week's price changes in what has been a very volatile week!

*Heating and stove oils show a drop of three cents a litre....
*Diesel fuel also shows a drop of three cents a litre, and...
*Gasoline shows a drop of 3.4 cents a litre on the way.

Market highlights

*Gasoline inventories remain high
       As reported by the US Energy Information last week, "product supplied" versus "product used" remains about 250,000 barrels above where refiners feel the numbers should be to maintain prices. The result played heavy in the markets last week as demand was seen to be weak and inventories for gasoline will remain high through the summer.
       Gasoline inventories are a strong 21 million barrels above last year's numbers. Refiner capacity is close to 92 percent as they just keep refining!

*Early winter outlook
       While the US EIA reports inventories for gasoline up, distillate inventories are also up, but not to the same degree. As of last week, distillate inventory is just above 11 million barrels for the same timeframe last year, and that number may be important to see maintained in the long term.
If inventories remain above the seasonal we are seeing this week, it may prove that the industry may be able to keep up with any anticipated demand over the winter, and this may keep prices relatively steady as compared to last winter.
       Any drop in refiner capacity or uptick in demand for distillate will, however, impact inventories and may help to increase prices. But for now, it's looking like "steady as she goes".

I'll leave it there for this week!

George Murphy
Twitter @GeorgeMurphyOil