A Word on Inventories...
It's not often one can view inventory levels of a certain product that is endeared to one's life, but the work of the Energy Information Administration has to be a standout example of the effect an inventory sampling can have on a market.
Today was no such example, but the snapshot released by the Energy Information Administration, along with it's projections on future pricing, will surely have a detrimental effect on oil prices.
As of today, the Energy Information Administration said 387 million barrels of crude oil are now at hand in US stockpiles.That's a record that has stood for something in the order of 82 years...
Think about that for a minute.
Inventory that has broken records the past few weeks is about to impact the markets, and it probably would never have happened if it had not been for the need to have strategic supplies on hand in the event of war or national emergency. Matched with a huge increase of US domestic production and a drop in consumer demand for refined product, there's trouble ahead for oil prices...
Today as well, while they raised the price of West Texas Intermediate for next year by eight cents to $93.25 a barrel, they also said that the price of Brent will drop below their initial projection of $100.75 for 2014. My thinking is that the onslaught of domestic production will lower the sale price of Brent crude because of increased domestic availability. We simply won't have to look for oil outside the US box.
Thank God for record keeping!
If we didn't know how much oil was on hand, we'd never know what to expect of the economy in the United States. And God knows then what Big Oil would be charging you and I at the pump!
Which brings one to think in this country, Canada: Why aren't we doing this sort of record keeping here? We don't know just how much of an impact our own record keeping could be on ours...
Here's what I have for this week's price changes:
- Heating and stove oils projected to increase by 1.2 cents a litre.
- Diesel to increase by 1.1 cents a litre.
- Regular gasoline to increase by 1.4 cents a litre, and...
- Reformulated blends show an added 8/10ths of a cent a litre.
Regards from the Big Land!