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Wednesday, December 09, 2015

Price changes for Thursday, December 10, 2015

Hi to all,

Here's what I have for price changes for this week, keeping in mind the winter blending formula that may throw off accuracy for heating and Diesel fuel pricing.

*Heating oil shows a drop of 1.8 cents a litre.
*Stove oil shows a drop of 1.8 cents a litre as well.
*Diesel shows a drop of 2.5 cents a litre, and...
*Gasoline shows a drop of 4.8 cents a litre.

Market highlights

*OPEC still won't Institute any kind of a production cut, in spite of the protests of a few members who would like to see. Some support to oil prices. Revenues have certainly taken a beating! But at the latest meeting in Vienna this past Friday, it was decided by members to Sally forth and keep production levels up. With the promise of added production, Oil prices dropped with refined commodity prices following.

*Is OPEC now chasing down the non-OPEC producers? Countries like Russia, Mexico, Norway, and yes, Canada, continue to produce crude oil from fields that have been pumping for years now. None of the companies, or the countries in question, want to lose revenues, nor can they be seen to fall to the whims of OPEC when they want to see other countries reign in production. OPEC would like to see non-OPEC nations join in with production cuts.

Can't happen...

With OPEC getting that "no" answer, first from Russia, OPEC will now start to make the run after these countries. If you can't get them to "participate" in cuts, I believe OPEC is starting to go after their bottom line to force them into an untenable operating position. That being the case, and with Iran about to enter the markets, Oil prices could drop further.  And with new Iranian crude to the markets chiefly for the European markets, Brent prices could be tagged first.

*The Canadian dollar continues to show weakness against the US greenback with the Canuck buck losing another two cents against the neighbouring currency.

I'll leave it at that for now. If you want, drop me a line!

Regards,

George
Twitter @GeorgeMurphyOil

Tuesday, November 24, 2015

Price changes for Thursday, November 26, 2015

 Hi to all,

Here's what I have for this week's price changes, keeping in mind winter fuel blending that may affect numbers for heating oil and Diesel fuels.
 
Heating oil shows a drop of 1.9 cents a litre.
Stove oils also point down 1.9 cents a litre.
Diesel shows a drop of a penny, and...
Gasoline shows an increase of 1.4 cents a litre.
 
Consumers may get hit next week
 
"While some prices show upwards movement, it may really be next week that we may see a substantial hit at the pumps because of today's Middle East action, and even then, it's really a test of a different market." That's according to George Murphy, group researcher with the Consumer Group for Fair Gas Prices.
 
"While distillate fuels are pointing down, all this week showed speculators pouring money into gasoline because that's the only place that is showing any signs of demand placed on it. The actions in Turkey today showed that, while there's plenty of crude oil out there, any Middle East action could be mitigated by other sources that can play into the markets. There's a huge oversupply out there, combined with the ability for the US domestic market to respond to any potential problems. We have a different market reality out there. I expected today's incident to play out in the markets heavier than it did.
 
"Today showed no 'huge' increase in oil, although it did rise another $1.20 US on the up-tick in the Middle East. It was an up-tick in refined commodities that is rearing its head. Gasoline spots rose another two cents a litre on Turkey speculation, and if it holds for the rest of this business week, we could see consumers get dinged a few more pennies next week as a result. We'll have to let the markets play out to confirm that."
 
-30-
 
For more information, contact;
 
George Murphy
Twitter @GeorgeMurphyOil

Tuesday, November 17, 2015

Price changes for Thursday, November 19, 2015

Hi to all,

Here's what I have for this week's price changes. Again, keep in mind that heating oil and diesel fuels are affected by the winter blending of fuels and may be off somewhat with the addition of jet fuel to the mix:

Heating oil shows a drop of 3.6 cents a litre.
Stove oil shows a drop of 3.6 cents as well.
Diesel fuel shows a drop of 3.3 cents a litre, and...
Gasoline points down 4.7 cents  a litre.



Consumers to see a drop to all fuel prices this week
 
Consumers will see substantial drops to all fuel prices this week as inventory data shows continued strong builds of oil inventories and weak demand for refined commodities like heating oil and gasoline. That's the word from George Murphy, group researcher for the Consumer Group for Fair Gas Prices.
 
"Numbers over the last week, especially since the Energy Information Administration released the latest inventory data on Wednesday, have been pointing down, and it doesn't appear that the numbers are going to get any better for those seeking higher prices," Murphy said. When you see some refineries coming back online from winter maintenance, and those refiners holding back on putting some stocks through for refining, you know there's going to be blow-back, in this case for the consumer. It appears that this is what happened over the last week, and that trend just might continue.
 
"Markets are also showing signs of a possible price war between some OPEC members that has been brewing since Iran signed on to a deal that will result in the lifting of sanctions this December. Previously, it was known that Iran would notify member nations of OPEC when it was ready to come back to higher production, but buried deep in the news was a quote from Iran stating 'The drop in prices won't be a concern for us. It will be a concern for those who replaced Iran'. I take that as meaning there's going to be payback for member nations and producers who stepped in to take up the oil deficit when sanctions were first placed on Iran years ago. Fellow OPEC members are on notice now. It's going to be worth watching how OPEC handles the situation of Iran's extra production of oil that chiefly goes to European customers. Brent prices may fall lower as a result.
 
"It's going to make a lot of speculators wonder again just where the bottom for oil prices really is. Here's hoping that consumers can see a positive benefit to that."
 
(30)
 
For more information, contact;
 
George Murphy
Twitter @GeorgeMurphyOil

Tuesday, November 10, 2015

Price changes for Thursday, November 12, 2015

Here's what I have for this week's price changes, keeping in mind that winter blending affects the outcome of numbers for heating oil and diesel fuel because of the addition of jet fuel to their various mixes.

Heating oil shows no change in price.
Stove oil also shows no change in price.
Diesel fuel shows a drop of 3/10ths of a cent a litre, and...
Gasoline shows an increase of 7/10ths of a cent a litre.


Some prices to remain steady this week: Murphy
 
Consumers won't see much in the way of price changes this week as the markets remained relatively steady in trading. That's according to George Murphy, group researcher for the Consumer Group for Fair Gas Prices. As a matter of fact, for some fuels, there won't be any changes.
 
"While West Texas Intermediate saw some retreat in its barrel price, and Brent prices followed WTI down, refined commodity prices remained overall steady as well for the most part, with the exception being a very moderate increase to gasoline spot prices. New York mercantile pricing showed gasoline rising from an average 49.6 cents a litre to 50.3 cents a litre over the last week. This means a slight upwards adjustment maybe seen for gasoline prices to consumers by a slim margin of 7/10ths of a cent based on that activity", Murphy said.
 
"Refineries ran at close to 89 percentage points, a modest increase, but shows refineries are coming back online from winter maintenance schedules. Close on 660,000 barrels a day production remains offline due to that. While there was an addition to crude oil inventories last week, a draw from US gasoline inventories is a sign indicative of lower inputs to refineries as a way to support prices to consumers at the pump. That's a finger pointing at the industry controlling how much gasoline is actually coming into inventories. Why produce a product if no one is buying?
 
"While the International Energy Agency has put the word out on a possible recovery in oil prices, I don't see anywhere in their prediction the fact of how responsive US oil producers can come back online and actually keep that supposed recovery from actually happening. Important to note here is that factor. Far beyond anyone's expectations, the US reached a high of 9.6 million barrels a day almost overnight by oil industry standards. They keep forgetting that producers will respond quite readily to any increase in oil prices to attempt to gain their lost market-share back. I still think it's going to be a while beyond 2020 before we see steady oil at $80 US. Almost 4700 wells ready-made to produce oil stateside is saying so."
 
(30)
 
For more information, contact;
 
George Murphy
Twitter @GeorgeMurphyOil

Tuesday, November 03, 2015

Price changes for Thursday, November 5th, 2015

Good evening!

Final numbers are in and they still show more of an increase than yesterday's alert, so please forward to all your friends!

Here's what I have for this week's price changes, keeping in mind the winter heating and diesel fuel blends that may show off a little on accuracy!

Heating oil shows an increase of 1.4 cents a litre.
Stove oil also shows an increase of 1.4 cents.
Diesel fuel shows an increase of 2.3 cents a litre, and...
Gasoline shows an added 3.3 cents a litre.

Rise in crude oil pushes up prices for consumers and refined products
 
"There's good news in rising crude oil prices for some out there, but consumers aren't going to enjoy an upwards adjustment to prices for the refined products this week when the PUB releases the numbers Wednesday at midnight!" That's according to George Murphy, group researcher for the Consumer Group for Fair Gas Prices.

"Over the past week, I've seen a rough $4 US increase to both West Texas Intermediate and Brent crudes that I track. What's upsetting here is that refined commodity prices have risen sharply along with them, showing consumers will be getting hit along the way," Murphy said. "Consumers will notice the increased price of gasoline and Diesel fuels this week.

Market news
"The news from the markets doesn't seem to show any justification for the increase in refined products. Refineries are coming back online, with the latest figures showing a mere 800K barrels of refining capacity now offline with winter maintenance. With almost a million barrels per day back online, you should see at least that much gasoline being added to inventories. Demand still remains down, and speculators are betting on an increase in crude oil products when the Energy Information Administration releases the latest data 12 noon, Newfoundland time.

OPEC itself shows no signs of cutting back with the member nations producing 32.2 million barrels a day in October. Russian production also increased last month to 10.8 million barrels a day. There's no sign of a drop in worldwide production, so why are crude oil prices rising? Iran is also set to add more to the markets with the country making a formal announcement December 4th, that they will be making a boost in production. Some are saying that Iran will add an immediate 700,000 barrels to the daily market from their present 2.7 million in October, with at least 40 million barrels in what is known as "floating storage".

Refining shows best profit in years
News from the markets also is showing why it is good to be a refiner these days, and may reflect on how well our own North Atlantic refinery may be performing. Latest figure I have works out to a profit of a rough $16 Canadian a barrel. That's about $1.68 million per day out of Placentia Bay, based on the latest figures I was able to acquire from the southern US refiner. But let there be no mistake why a truly integrated oil company is making money now, as well as refiners: Crude acquisition costs are well down with the crash in oil, and it's there that they've been making some good dollars!

(30)
For more information, contact;

George
Twitter @GeorgeMurphyMHA

Tuesday, October 27, 2015

Price changes for Thursday, October 29th, 2015

Hi to all,

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

Heating oils to increase by 6/10ths of a cent a litre.
Stove oil adds 6/10ths of a cent a litre.
Diesel fuel adds 5/10ths of a cent, and...
Gasoline adds an additional 6/10ths of a cent a litre.

Consumers to see a slight increase to all fuels this week
 
St. John's, NL, October 27, 2015- Consumers in Newfoundland and Labrador can expect to see a rarity in the markets this week when the Public Utilities Board moves to adjust prices this coming Thursday, according to George Murphy, group researcher with the Consumer Group for Fair Gas Prices.
 
"While commodity prices have remained relatively steady this past seven days, it's the price of oil that has been slipping, and that has dragged down the Canadian dollar, an important factor in figuring out Canadian commodity prices," Murphy said." We've lost two and half cents against the US greenback since the 20th of the month, and that means a rough two cents taken from consumers. We should be looking at a drop in prices, if the dollar stayed the same as last week's paring with the US dollar".
 
"In the meantime, lower oil isn't crimping on oil company profits. British Petroleum is the latest to step forth and report a $1.8 billion dollar profit over the last quarter, and that's a good $600 million more than what was expected. I expect other integrated companies to report good numbers in the coming days. Anyone with refining capacity is doing well, and this shows it. It's not just about pumping oil. It's all about the finished product as well.
 
"I'm looking at this week's Energy Information Administration's inventory data tomorrow to get a read on the future of the gasoline and distillate markets. I'm betting on, not only a build in inventories of oil, but of gasoline as well, as refiners seem to be coming back online from winter maintenance schedules. Refinery outages were reported at 1.8 million barrels last week, but data is now showing 1.1 million barrels of processing remains offline. I'm betting on more gasoline to be added, and perhaps another run down in prices later in the day."
 
(30)
 
For more information, please contact;
 
George Murphy
Twitter @GeorgeMurphyMHA

Tuesday, October 20, 2015

Price changes for Thursday, October 22, 2015

Hello to all,

Here's what I have for Thursday price changes:

Heating oil to drop by 3.1 cents a litre*.
Stove oils to drop by the same 3.1 cents a litre.
Diesel to drop by 3.2 cents a litre*, and...
Gasoline to drop by 3.8 cents  a litre.

*Note that both heating oil and Diesel fuel are subject to the winter blending now, so these numbers can just be used as a guide and not the actual that may occur!

Consumers to get another break at the pumps this week 

"Consumers can expect to see another break at the pumps when the Public Utilities Board moves to adjust prices this Wednesday midnight", according to George Murphy, group researcher and co-founder of the Consumer Group for Fair Gas Prices. "Continued builds of gasoline inventory in spite of refinery outages due to winter maintenance have led to some good builds in inventories of gasoline. With the consumers of North America driving a little less than in summertime, it has started to reflect and impact prices substantially, and, this week too as predicted."

Final market numbers last week began to show that there was a substantial break for consumers about to hit, and I put the "warning" out of an impending drop in prices for this week that is coming to fruition. That prediction showed three cents across the board, and the final numbers were pretty close to that," Murphy said.

"I'm still seeing some heavy production out of OPEC and non-OPEC producers which continues to compound and lower oil prices. Floating storage figures still show a substantial amount of crude oil with nowhere to go, almost 164 million barrels in tankers, waiting for the call to sail.

"Again, with a possible end to winter refinery maintenance and turnover about to end, the return of refineries back to production has a possibility yet of impacting gasoline and other refined commodities down further. With 1.7 million in daily refining capacity offline right now, you can imagine the impact on the markets when they start adding again to inventories.

Most stations selling gasoline are already below a dollar a litre, and can be expected to sell a little lower as we get later in the week. The trend of prices looks steady for now, but once refining capacity kicks back in, should start to fall again".

********
For more information, please contact:
 
George Murphy
Group researcher
Consumer Group for Fair Gas Prices
Twitter @GeorgeMurphyMHA

Tuesday, October 13, 2015

Price changes for Thursday, October 15, 2015

Hi to all,

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

Heating oil shows a drop of just 3/10ths of a cent a litre.
Stove oil shows down by the same 3/10ths of a cent.
Diesel fuel shows a drop of 2/10thsof a cent a litre, and...
Gasoline shows a drop of 7/10ths of a cent.
 
*The real news may come next week on further drops in gasoline, diesel and heating oil prices as spot pricing has retreated somewhat the last two days. So far, gasoline shows a drop of three cents playing through on lower oil and a stronger Canadian dollar. Stove, heating oils and diesel all show the same trend in for next week as well. Anything can happen to change that in the coming days however!

In the news

OPEC production figures show a new record
OPEC produced almost 10.7 million barrels a day in September according to one report today, that probably led speculators when the glut of oil in the markets will end. While the union of oil producers wonders when the glut will lead to higher prices, they show no signs of reigning in production in an attempt to maintain market share. Oil in "floating storage" again continues to climb, signaling an abundance of oil with nowhere to go. Floating storage now shows close to 178 million barrels waiting aboard tankers with "no sale" in sight.
 
IEA lowers world demand growth for 2016
The International Energy Agency has lowered its forecast for oil demand growth by another 600,000 barrels a day, already adding bad news to a market well over-supplied. The IEA has dropped worldwide demand for oil to 95.7 million barrels a day. Over the last five years, the IEA has tracked a yearly increase in demand of oil products by 1.8 million barrels, but has dropped that back to 1.2 million barrels of added consumption for 2016.
Iraq production well up ahead of Iran's market "re-entry"
Iraqi production in the month of September has hit 4.2 million barrels a day, well up from 3.8 million recorded a few short months ago. While Iran waits in the wings to begin production to a market free from sanctions, Iraq is simply trying to maintain their own customer base, ahead of Iran's re-entry with an added 500,000 barrels  a day output.
 
That's it for this week!
 
Regards,
 
George
Twitter @GeorgeMurphyMHA

Tuesday, October 06, 2015

Price changes for Thursday, October 8, 2015

Hi to all,

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

Heating and stove oil to increase by 4/10ths of a cent a litre.
Diesel fuel shows no change, and...
Gasoline shows an increase of 2/10ths of a cent a litre.

* A couple of notes first off. Winter blending is now in effect for heating oil as well as Diesel fuel. From now until later in spring, my numbers for these fuels will be slightly off because of the addition of jet fuel (kerosene) that is added as an anti-freeze agent. That's a fuel that I can't track as of yet. Use these numbers as a "guide" on the direction these fuels may go, and not the definitive.

In the markets

Russia and Saudi Arabia in talks
Interesting to hear that both countries are into discussions around the possibilities of controlling the outflow and production levels of crude oil. Both countries have a direct interest in supporting oil prices, but it could come at a cost if they're successful in limiting crude oil output.

At least, in the short term.

They run the risk of bringing back online all those wells that had been shut in as a result of lower oil prices, and in fact, if they do succeed in increasing oil prices, they may end up losing market share to US domestic producers and those countries who are waiting to also enter into the export markets. Countries like Venezuela and Ecuador are itching for oil prices to come back and they no doubt, will put out more oil to make up for lost revenues.

Still waiting in the wings however, is also the prospect of low China demand and Iran's entrance into the markets later this year in December, or in January, 2016. The entrance of Iran will add an immediate 500,000 barrels into an already over-supplied marketplace.

Oil up on lower US domestic production
The price of oil increased today on speculation that US domestic production has taken a pounding as a result of lower oil prices. Numbers are showing that production has dropped off anywhere from 500,000 barrels a day to as low as 150,000 barrels. That being the case, US domestic production rests somewhere around nine million barrels a day. Keep in mind though, that with any rapid rise in prices, there will be a response by the small oil producer out there. The spigots can be quickly turned back on.

Turning point?
"We're not there yet".
As some oil companies have said in the media, there's a belief that we've reached a turning point where they are saying a recovery is on the way, but they're not so eager to carry on with a return to oil $100 a US barrel. Predictions of a "recovery" include $57 US a barrel in 2016 and slightly more in 2017. What I do think is that they don't consider a rapid response from small US producers in the equation. $57 US is not a "recovery". It's a factor in determining if small producers turn the drill bits into the ground again.

I'll leave it at that for now,

Regards,

George

Twitter @GeorgeMurphyMHA

Tuesday, September 29, 2015

Price changes for Thursday, October 1, 2015

Hi to all,

Here's what I have for price changes for Thursday:

Heating and stove oils to increase by a penny
Diesel to increase by 8/10ths of a cent a litre, and...
Gasoline shows an increase of 3/10ths of a cent a litre.
 
In the news
 
A halt to Arctic drilling
Royal Dutch Shell has announced it is discontinuing its offshore exploration program off Alaska, and that goes in hand with sanctions against Russia over the Ukraine, in fact, hitting RDS twice. The plans by Royal Dutch Shell included a program of drilling in Russian Arctic waters that lay between that country and Alaska. While it may appear surprising, it shouldn't in a new world of $50 US a barrel oil along with the fact that they simply couldn't explore in their program against sanctions placed that disrupted exploration. It wasn't all about $50 US.
 
With the potential of upwards of 25 billion barrels estimated to be in Arctic waters, I find it hard to believe that they would turn away from a project that could result from the discovery of such potential reserves.
 
Canadian dollar figures against fuel prices...Again
The Canadian dollar has again accounted for a slight increase to prices this week. While some refined commodity prices slipped slightly this week, the drop in the Canadian dollar against the US greenback. Had the dollar remained stable this past week, we could have been looking at a drop of a penny across the board. As it stands right now, had the dollar been at par with the US dollar, we would be looking at heating/stove oils, gasoline and Diesel all 13 cents plus taxes lower than what we see to the consumer right now. 
 
 US refineries still down for winter maintenance
With almost 18.6 million barrel a day capacity, one would almost be in shock in learning that 1.4 million barrels is presently offline due to factors like winter maintenance schedules. No need to be alarmed as refiners routinely shut down refining to switch over to production of winter fuels like heating oils and diesel fuels at this ti. Refiner capacity should start to climb again in the coming weeks, taking further supporting pressure off gasoline prices as inventory is again added to stocks. 
 
That's it for this week!
 
Regards,
 
George
Twitter @GeorgeMurphyMHA

Tuesday, September 22, 2015

Price changes for Thursday, September 24, 2015

Hi to all,

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

Heating and stove oils to drop by 4/10ths of a cent a litre.
Diesel also down by 1.4 cents a litre, and...
Gasoline shows a small drop of just 6/10ths of a cent a litre.

In the news
Refiner capacity
With refineries mostly into maintenance mode now, not a lot of gasoline is coming back into the markets that shows we're into a strong inventory building mode. With a drop in gasoline demand as a result of the end of the summer driving season, and refineries offline due to the switch to winter production, markets are showing relatively steady for gasoline prices as demand fails to seriously impact inventories. While no inventories have been impacted by demand, any possible build has been sidelined as well, and it's showing in prices that are mostly steady as a result.

Crude in "floating storage"
Latest numbers indicate an overall drop in floating storage as a market oversupply continues to weigh down prices. Present figures show almost 150 million barrels still out there in storage with nowhere to go as over-production continues to negate any sale of crude.

China keeps buying "low"
China continues to buy at almost record lows of oil over the last ten years, and they may very well be a factor in where oil goes in the coming years. With China adding almost 500,000 barrels a day to their strategic reserve at these low prices, China has undertaken a program of adding additional storage capacity to their strategic reserve. With China stocks filled with 220 million barrels of crude, their added capacity program includes close to an added 135 million barrels now under construction and an added 148 million in the planning stage.

Future price of oil
With "futures" pricing showing crude selling at $58 and change for fiscal 2017, the news is not good for those hoping for higher oil prices. Fiscal 2016 Brent prices are hanging in the mid $53 US a barrel range. China's continuing purchase of crude to add to its strategic reserve remains a vital factor in why oil has not crashed completely. That, and the fact that US domestic producers simply can't master production at lower levels without hurting their bottom lines. If prices do rise, US domestic will only increase again to lower them as producers try to gain some revenue from their investment.

Iran continues to weigh on oil
The promise of Iran's "re-entry" into the oil markets also continues to keep prices down. While Iran is continuing to work toward meeting the goals required to lift sanctions, word is that they're extremely close to meeting the December goal that could add another 500,000 barrels immediately to world production of oil. While some don't think it will figure, any past addition/cut by OPEC in oil production has to have at least the temporary effect of lowering prices in this case. There's more trouble ahead for Brent!

I'll leave it at that for now!

Regards,

George
Twitter @GeorgeMurphyMHA

Tuesday, September 15, 2015

Price changes for Thursday, September 17, 2015

Hi to all,

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

Heating and stove oils to drop by 2.2 cents a litre.
Diesel to drop by 2.9 cents a litre, and...
Gasoline to drop by 3.9 cents a litre.

In the markets
OPEC market tidbits
In what must be true irony, Venezuela is now proposing that OPEC adopt a new policy of having a minimum price for oil! With oil prices crashing and causing a stark reality of lower oil revenues to the OPEC member state, the country is having to face just how low oil goes as speculators also bet on how low prices can drop. In conversation the other day, I reflected on remembrances of OPEC being happy with maximum prices between $22 and $28 US as early as 1997 when I started studying oil. I wonder if they're really getting back to the new reality of oil now?

Iraq is asking oil companies operating there to reign in any capital spending for the next fiscal year, citing lower expected revenues from oil.

Out of China
China's future demand for oil is expected to drop further in the face of a weakening economy, with demand expected to drop from an added 400K barrels a day to only 260 K barrels a day better than what they use now. Slower growth comes a slower need with an economy in trouble. Latest word also has China adding just 400,000 barrels a day to their strategic reserves where they previously purchased 750K per day.

I'll leave it at that for now. If you need anything else, drop me a line.

Regards for now,

George
Twitter @GeorgeMurphyMHA

One of these days, I'm going to sit on a stage and give some of these oil companies some sage advice! Either that, or let them pick my brain...lol

Tuesday, September 08, 2015

Price changes for Thursday, September 10th, 2015

Hi to all,

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

Heating and stove oils to increase by 1.9 cents a litre.*
Diesel to increase by 2.3 cents a litre*, and...
Gasoline also adds 1.1 cents a litre.

*With increases to distillate fuels like heating and diesel exceeding that for gasoline, it's an easy signal that speculators in the markets have now turned their attention away from the gasoline markets for the next little while. I expect more attention on these fuels from the speculators for the next few months
.
In the markets

Volatility in the oil market continues to show wild swings as they attempt to find at least a temporary bottom to oil prices. Speculators still fear a further drop in oil prices, probably part of the reason why oil hasn't shown any appreciable increase in the past few weeks. Indeed, the gains and sudden drops in oil are consistent with speculators continuing fears of bad economic news yet to come with the markets. Some speculators are saying oil prices could retreat even further, and as low as $30 US a barrel before we see some sense return to the markets.

The latest production figures from the US Energy Information Administration are telling some news that the "oil price war" is beginning to tell on overall US domestic production. The Saudi's fired the initial shots to try and reign in US production of domestic resources by driving down prices for oil to a point that it simply wouldn't be affordable to pump. US domestic production has dropped from peak production in July of 9.6 million barrels a day to the latest August 28th report of 9.2 million barrels a day. Of course, part reason of market fears whenever we see oil prices rally also centers on the fact that, while the spigots have turned off, any increase in oil prices can easily turn them back on again.

That's it for this week!

Regards,

George
Twitter @GeorgeMurphyMHA

Tuesday, August 25, 2015

Price changes for August 27th, 2015

Hi to all,
 
Here's what I have for this week's price changes:
 
Heating and stove oils to drop by 3.7 cents.
Diesel to drop by 3.9 cents, and...
Gasoline to drop by six cents a litre.
 
In the markets...
 
China...It's all about China.
 
With the collapse of the price of oil, it's easy to point to China as an example of how dependent the world has become in using China as a "crutch" to support oil prices. We all know that as an emerging nation, China would have an effect on demand for world oil, but no one yet has considered what has been done by China to break it's initial dependence on oil. It is estimated by some that China is about three years away from putting domestic drilling regulations in place so it can try and develop its own reserves. Through the years, I've also run into small tidbits from China that others have ignored. Shell, for example, just a couple of years ago, signed a huge agreement with China to develop both natural gas and join with the state-owned oil company in developing other "sources" of oil resources. No doubt, if the "frack" goes ahead in China soon, it will have started to crack its dependence on OPEC oil and done massive damage to OPEC's chief customers. Where does oil go then?
 
OPEC countries worried
 
"Weaker" OPEC producers are beginning to worry over overall OPEC production and the Saudi drive to cut US domestic production. In what is beginning to look more like a suicidal motion towards trying to maintain market share, some of the smaller OPEC producers are beginning to question the moves by Saudi Arabia in over-producing to try to maintain market share and cut into US domestic costs to produce. It's costing smaller OPEC members to also absorb the hit to their own revenues, and has them calling for an emergency meeting to address the long-term goal of OPEC. Are we witnessing a crack in OPEC unity?
 
It's been a long drive back from the west coast, so, I'm going to leave it at that for now.
 
Regards,
 
George
Twitter @GeorgeMurphyMHA

Tuesday, August 18, 2015

Price changes for August 20, 2015

Hi to all,

Here's what  have for this week's price changes;

Heating and stove oils show an added 4/10ths of a cent a litre.
Diesel fuel shows no change this week, and...
Gasoline shows an additional 1.5 cents a litre at the pumps for Thursday.

In the markets

December 18th...
That's the key day to watch for as the International Energy Agency says is the earliest date by which Iranian crude will be released clear of sanctions. It's estimated that, Iranian exports from the country will amount to an immediate influx of 500,000 barrels of crude oil a day with another 500,000 to hit the markets in the intervening six months. Brent crude prices have been showing a little to the "down side" in the last coupe of days, out of par with the movement of West Texas Intermediate.

Refinery outages lead to tight gasoline markets. Prices rise
In the mid-western US states as well as western Canada, consumers too a huge hit at the pumps with gasoline spot prices rising as much as 10 to 20 cents a litre as a result of a Whiting, Indiana refinery outage that took 400,000 barrels of crude processing offline. With refinery capacity at 96.1 per cent last Wednesday, it shows just how tight the gasoline market was. Still, almost 605,000 barrels out of a possible 18.3 million barrels of refining capacity remains offline. Gas prices in Calgary hit $1.22.5 cents a litre as a result.

Speaking of Calgary...
It's a shining example of what can happen to a rapidly growing oil industry that gets handicapped by the lack of export infrastructure and a lack of secondary processing. Prices for Western Canadian Select sold at market yesterday for $22 US a barrel, while in neighbouring Edmonton, their Syncrude Sweet sold in the markets for $37 US and change. While projects like Keystone XL and projects pushing oil to the BC coast remain delayed, also delayed is any possible recovery of Alberta crude oils without a "way out", barring any other geo-political or economic factors.

Jet fuel surcharges persist...
I'm surprised at the lack of reaction from consumers who still pay absurd amounts in fuel surcharges, even though the price of jet fuel is down close to 37 cents a litre less than it was for the same time period last year. Market numbers show jet fuel selling on the New York mercantile exchange for 50.7 cents a litre, down from 87 cents a litre.
              Overseas, airlines based in Asia, like Japan Airlines and South Korean will be revisiting their fuel surcharges based on lower than expected oil prices. Japan Airlines expects their fuel surcharges to be half of what they were this time last year. Can't say the same for here. What is the policy to our Canadian airlines, WestJet and Air Canada?

That's it for this week,

George Murphy
Twitter @GeorgeMurphyMHA

Tuesday, August 11, 2015

Price changes for Thursday, August 13, 2015

Hi to all,

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

Heating and stove oils down by 6/10ths of cent a litre.
Diesel to drop by the same 6/10ths of a cent, and...
Gasoline to drop by 3.2 cents a litre.

Market news

China demand to hit oil?
Besides the fact that there's a problem worldwide with economic recovery, particularly evident are concerns around Chinese growth. Growth has been stagnant to say the least, with problems even arising in the Chinese trading markets. Add to that, the Chinese government's move late yesterday (today) to devalue its own currency in an attempt to attract more business to at least stabilize the downfall of industrial output. The move has led speculators to worry about the real problems in the China economy, and that, in turn, has led to another round of drops in oil prices. Fears abound about a further drop in oil demand in China, reflecting on oil.

Saudi's to drive oil lower?
If Chinese demand retreats as expected, a concerted move by Saudi Arabia to maintain overall production in the markets could lower oil prices to $36 US a barrel (WTI). The production figures out of Saudi Arabia show that 10.36 million barrels a day was pumped by the OPEC member in July. That leaves worldwide oil production at 2.9 million barrels a day more than what the world is consuming.

US domestic production keeps rising
Enter Uncle Sam...
Over the past eight months, US domestic production of oil has added close to 600,000 barrels a day, with US production hitting 9.4 million barrels a day. While OPEC is forecasting an added 90,000 barrels a day in consumption for the 2016 year, it hardly scratches both additional US domestic production and added oil to the markets from Iran, who boosted their own domestic production to 2.9 million barrels a day in anticipation of another entry into the markets. IF US producers can manage expenses in production costs, then oil prices are in a heap of trouble and bets for higher prices are off.

I'll leave it at that for now,

Regards,

George Murphy
Twitter @GeorgeMurphyMHA

Tuesday, August 04, 2015

Price changes for Thursday, August 6, 2015

Hi to all,

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

Heating and stove oils to drop by 2.25 cents....
Diesel to drop 2.3 cent, and...
Gasoline shows a drop of just 8/10ths of a cent.


As predicted, with the drop in the price of Brent and WTI the last two days, the Canadian dollar took another pounding against the US buck. It's the lowest in six years right now.

Consider this: If the dollar was at par with the US dollar right now, you'd be looking at prices a rough 18 cents a litre lower than they are right now.

Right now, refiner capacity remains tight with levels reaching close to 96 percent of overall US capacity, and inventories of gasoline still show signs reflecting the market volatility.

"Demand" continues to be a factor in gas prices. As we come to the end of the summer driving season, there's some hope of further retreat, but I expect refiners and speculators to play with the fact that refineries across North America will soon begin winter maintenance routines, and they'll use that "excuse" to keep prices elevated.

We'll see what happens!

That's it, short and sweet for this week.

Regards,

George Murphy
Twitter @GeorgeMurphyMHA

Tuesday, July 28, 2015

Price changes for Thursday, July 30, 2015

Good evening all,

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

Heating and stove oils predicted to drop by 1.25 cents a litre.
Diesel to drop by 8/10ths of a cent, and...
Gasoline to drop by 3.2 cents a litre.

Market noise
Bank of America on oil
Bank of America is projecting more weakness for oil to come in the third quarter of this year. Expectations of the company show Brent prices to average $50 US from their previous estimate of $54 US  a barrel. Prices for WTI (West Texas Intermediate) were expected to average $45 US a barrel from their previous estimate of $50 US.

US domestic production seen rising
US drillers added an unexpected 21 drill-rigs to the markets this week. The move was a surprise, but shouldn't have been with investors looking for a return on their investment as well as expectations from cost cutting measures. Those measures included everything from salaries to "re-fracking" previously producing wells to get new production. The move removes previous drilling costs with the assumption being that the well is already done, so the frack can occur. Canada added eight rigs over the same time frame last week.

Brent prices to falter amidst market turmoil?
Oil prices pushed lower this last regulatory session as market unease in China played heavily through the week and continues to do so. As stated last week, there were considerable debate from market speculators about the longevity and stability of the markets in China. While growth has massively slowed, stocks there continue downwards, increasing doubts of overall Chinese oil demand. As well, all bets are off now in how much oil Iran can add to the markets, considering the world situation with oil prices. Speculators feel that, with massive world inventories of oil out there, Iran's addition of oil to the pot will only hinder the glut problem on the markets, making it less likely for oil prices to recover anytime soon. Add to that problem a simple fact that, with Iran's entry back into the markets expected soon, competition amongst oil producers will only increase, with that likelihood that everyone is going to be forced to compete for market share.

On this date
Brent oil price on July 29, 2014?...$106.47 US a barrel
Those were the days, my friend!...

That's it for this week!

Regards,

George
Twitter @GeorgeMurphyMHA

Tuesday, July 21, 2015

Price chenges for July 23, 2015

Hi to all,

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

Heating and stove oils to drop by 1.4 cents a litre.
Diesel fuel to drop by an even penny, and...
Gasoline to drop by 2.1 cents a litre.

In the markets
Iran nuclear deal vs production
The nuclear deal with Iran has speculators more than skeptical and divided over how fast the OPEC country can overcome sanctions and get its oil industry moving again. While some speculators said last week that Iran would not be able to produce more than 500,000 barrels immediately for the world market, others are saying they can rebound production in less than four months, rather than the additional 12 months predicted earlier. It's going to be a "wait and see" approach that market speculators are going to have to take. Nothing bites the oil markets like reality!

August buying contract
Now, you'd hardly tell by the weather, but it should be a clue as to what's happening with gasoline prices this week. While gas prices are predicted to be down this week, it's a sure sign that we have to be close to the end of the August buying contracts. That means that the focus will shortly turn towards the distillate group of fuels. It's well known in the markets that, from the time of initial purchase of crude oil to the delivery of refined product, takes a rough forty five days to get to the consumer. Assuming that, we're now looking at speculators starting to turn their eyes later this week to distillate fuels like heating, stove oils and diesel fuel. The focus off gasoline this week with a slight drop in prices may simply be that; while the summer has not gone yet, the opportunity to make a buck in the markets off refined gasoline has come and gone. See what happens with gasoline for the rest of the summer, but futures prices are taking a dip as we get closer to September/October.

Canadian dollar drops
It should be no surprise that with the drop in the Canadian dollar against the US greenback as a result of the drop in interest rates last week, you could have been paying a lot less for gasoline than what I have here for this week. As compared to a month ago, the two cent drop in the Canadian dollar against the US dollar has cost you close to two cents t the pumps. What is showing as a 2.1 cent drop should be four cents this week, but thanks to the "wisdom" of the bank of Canada, its now a little harder for consumers to recover from this "recession". The drop in the dollar just doesn't affect fuel. It also hits consumers for anything, like food, that comes from the US.

That's it for this week!

Regards,

George Murphy
Twitter @GeorgeMurphyMHA

Tuesday, July 14, 2015

Price changes for Thursday, July 16, 2015

Hi to all,

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

Considering all the moves in the international political arena, it may not be a lot of action in the refined commodity department, however!

Heating and stove oils show a drop of 1.8 cents a litre on the way.
Diesel fuel shows down by 2.1 cents a litre, and...
Gasoline shows an added 9/10ths of a cent.

Market news

Greece and the Euro

Greece continues to play in the markets, but as much as what people would have figured. With such a low gross domestic product and already an unemployment level that's pretty high, some are saying that Greece has played it's card on oil already. Greece amounts to a much lower GDP than China, which has it's own issues with the stock markets. There, the Chinese government has ordered government run agencies to begin buying stocks of private companies in order to maintain their value and help keep some semblance of order in trading. Some analysts are saying that we can expect to see another thirty percent devaluation of stocks there before stability reached their own markets.

Iran deal
While a deal over Iran's nuclear program has been signed, don't expect to see Iran's oil output to hit an added 1.8 million barrels right away. Analysts say that due to aging infrastructure, Iran can only produce an added 500,000 barrels a day more upon lifting of sanctions, and those sanctions have to be tested before they're lifted. Analysts also say that Iran will be able to add another 500,000 after six months has passed. But the kicker here is that Iran has over 30 million barrels of crude already in floating storage ready to hit the waves as soon as word is given. That's compounded by a total "floating" figure of 174.8 million barrels already waiting to go.

Iraq, Saudi Arabia continue to break production records. Libya back?
Word from Iraq shows that country increasing production again in July to amount to 3.86 million barrels, while it's neighbour, Saudi Arabia hitting production daily at 10.6 million barrels in what I believe is a move by those OPEC countries to stymy the revival of US domestic production. That's another reason why oil showed some retreat over the past week. To add to world glut woes, two of the fighting factions in Libya have reached an agreement to allow oil exports there to resume. Amongst the bloodshed, Libya has been exporting a rough 800,000 barrels a day through two coastal ports previously shut in.

Canadian dollar
The Canadian dollar against the US greenback lost another penny in a week that saw oil prices on the retreat again, albeit to the benefit of the US dollar. Whenever I see a retreat in oil, it's usually a time for speculators to invest in the US dollar, and that lowers our own, considering we have a dollar closely tied to performance of natural resources like oil.

That's it for this week!

Regards,

George Murphy
Twitter @GeorgeMurphyMHA 

Tuesday, June 30, 2015

Price changes for Wednesday, July 1st, 2015

Here's what I have for this week's price changes. This week, prices will be adjusted at midnight tonight as a result of the Canada Day holiday.

So really, consumers and the media get this notice just ahead of the price change itself!

Here's what I have for this week:

Heating and stove oils to drop by 27/100ths of a cent a litre.
Diesel to drop by 3/10ths and...
Gasoline to drop at midnight by 1.4 cents a litre.

A potential deal with Greece over it's debt may be at hand, and that helped to support oil prices in today's trading. Oil traded just slightly lower on the fact that there was a potential up to notice-time, of a Greek default on debt payments. Most European markets, while still down today, were more or less after insulating themselves from that possibility as a result of Greece's last troubles back in 2008-09.

In the meantime, there could be some more troubles with Brent prices. This time, news out of Antwerp is telling of steady builds in overall Brent inventories that may put those oil prices at risk of slipping. Capacity in Europe for oil storage is also starting to show issues in other major European regions as well as overall crude oil inventories keep climbing. In the meantime, oil in floating storage in the Arabian Gulf and centres close-by, show another climb, with oil inventories hitting 183.7 million barrels.

Closer to home, in the US, we could be witness to a bear awakening as US rig counts surprised everyone with the addition of TWO rigs to add to the weekly rig count. That's the first increase in the number of operable rigs in the US since December, 2014 when oil prices initially collapsed! Seems that cheaper operational costs may be factors in bringing some rigs back to life, but could also be a straw that broke the Saudi back spurring them to add production to stem the flow of US oil.

We'll see what happens there!

That's it from me this week!

Regards,

George Murphy
Twitter @GeorgeMurphyMHA 

Tuesday, June 23, 2015

Price changes for Thursday, June 25, 2015

I wanted to say first off a true heartfelt "Thank you" for all the kind words. I'm looking forward to finishing my term in November and getting more time with family. I think it's them that needed a break, so, I'm going to give it to them...

The numbers for this week all point down. Go figure...I pack it in and the price of gas drops!...

I should quit more often! Here's what I have for this week's price changes:

Heating and stove oils are pointing down by 4/10ths of a cent.
Diesel is also pointing down, but by a half cent, and...
Gasoline shows a drop of 2.5 cents a litre.

The Canadian dollar remained relatively steady against the US greenback this week.

OPEC production is expected to pick up again in the coming weeks that may throw a wrench into the oil markets and potentially send some prices down lower. With Iran nuclear talks set to begin, speculators are widely expecting that Iran, if sanctions are lifted, will begin an immediate climb to an output level not seen since 2008 when sanctions were tightened. Right now, Iran is pumping out 2.8 million barrels a day, but is widely expected to hit 4 million barrels if sanctions are removed.

Libya officials are saying to expect that country to start exporting oil again shortly. Government officials predict that output there will hit 800,000 barrels a day by July in a move that could add more oil to an already over-supplied European market.

Saudi Arabian officials are saying that, if the world need arises, they can boost production capacity by between 1.5 and 2.0 million barrels a day, remarkable considering the country already put out 10.3 million a day last month.
 

I'll leave it at that for now!

My regards, and again, thanks for all your thoughts and prayers!
George Murphy,

Tuesday, June 16, 2015

Price changes for Thursday, June 18, 2015

Hi to all,

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

No changes expected for heating and stove oils. Numbers show close to zero predicted, but remember my margin for error of 3/10ths of a cent a litre.

Gasoline shows an added 3.1 cents a litre coming for Thursday.

Well, you might be thinking "every excuse in the book to raise prices" and you may be right, but there is some evidence out there to support why speculators are starting to pour some dollars back into the gasoline trading market again.

Demand is up, plain and simple...

Here's my read:
With gasoline being consumed at a good rate now, because of the summer season, no doubt, I'm seeing refineries running at a little better than 94 percent of overall capacity. I haven't seen a number as high as that in a long time, but it tells you exactly how much gasoline is being used. Right now, in the US, demand has outpaced itself and has grown an added 1.1 percentage points in the last four weeks alone. They're consuming gasoline in the US at a remarkable 9.35 million barrels a day, while capacity has only allowed for 9.1 million barrels.

While OPEC has again produced at another record number, the oil they had in floating storage is starting to move lower. Latest numbers I have show a drop of close to 20 million barrels from just last week. Is this a sign that someone is buying the stuff, or is this normal in the rotation of their inventory? I'm keeping a close eye to this one.

Water shuts down most refineries. That, and a lack of electricity. Don't expect the remains of tropical storm Bill to affect the markets too much. When it landed on part of the Texas coastline yesterday, it landed in an area far from the major area for refining in the US. Most refining facilities are centered close to the Louisiana border with Texas, the same area that got pounded with heavy wind and rain from hurricanes Rita and Katrina in 2005.

I'll leave it there for this week!

Regards to all,

George
Twitter @GeorgeMurphyMHA 

Wednesday, June 10, 2015

Price changes for Thursday, June 11, 2015

Sorry I'm late, but computer issues at home didn't allow me to get in and post last night!


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

Heating and stove oils show down by 2.0 cents a litre.
Diesel shows a drop of 2.2 cents a litre, and..
Gasoline shows a very modest drop of just a half penny.



Better than nothing, I guess...


The Canadian dollar remained relatively steady against the US dollar this week against the volatility of oil. Numbers for oil were simply all over the place with rapid movements up and down.


Part of the reason for oil's increase the past two days itself may seem odd. While industry insiders have been saying that OPEC is pumping record amounts to maintain revenue, Saudi Arabia itself responded on this rare occasion to tell the same industry insiders that they were pumping record amounts in order to meet demand from their clients. Oddly enough, the numbers for oil in floating storage seem to show something happening with all that extra oil the Saudi's have on hand. Floating storage numbers showed a drop of close to nine million barrels this week to sit at 173 million barrels.



Unusual in itself, that one got the markets moving amidst speculation that the Saudi's may be right. An open question in itself: While the Saudi's are supposedly pumping record amounts, if demand does pick up, will there be enough capacity for Saudi Arabia, or OPEC,  to meet it?


Speculation as well over Iran being able to enter the markets with an added 1 million barrels a day. That was the number a lot of insiders were kicking around as a possibility that an agreement would be reached over access and monitoring of Iran's nuclear program. The details of the agreement were supposed to be finalized this week, but politico's in Iran are worried over sovereignty and security issues with monitoring of sites not previously agreed to.

Finally, while the Saudi's continue to pump to knock out smaller US producers, their program seems to be working. But here in Canada, it seems smaller producers continue to come back online. Due to the lower Canadian dollar, one can only speculate, but rig counts in Canada climbed another 18 rigs last week while the US dropped 10.


I'll leave it at that for this week!

That's it for this week!

Regards,

George Murphy
Twitter @GeorgeMurphyMHA 

Tuesday, June 02, 2015

Price changes for Thursday, June 04, 2015

Hi to all,

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

Heating and stove oils add 15/100ths of a cent.
Diesel adds 2/10ths of a cent, and...
Gasoline adds 1.7 cents a litre.


The Canadian dollar took another pounding against it's US counterpart this week as the US dollar gained on speculation of impending interest rate increases to come. That dropped the Canuck buck, which lost another two cents against the US greenback and helped to again raise gas prices this week as well.

In the meantime, OPEC meets later this week, June 05th in Vienna, to discuss production quotas that seem to have hit new records themselves in spite of lower demand for oil. OPEC pumped 31.579 million barrels a day last month in an effort the Saudi's are calling to knock out higher cost producers. Iraq produced a record 3.87 million barrels a day of that.

But there's danger ahead for oil prices, if some market indicators are right. The decline in rotary rig counts in North America may be slowing, as all signs point to lower cost producers coming back online in Canada. Here, the rig counts were up by 26 for the last week with the US just down by ten. Lower costs to produce here can partially be cited here for the additional working rigs. That, and an increase in oil prices over recent weeks has raised the bar on profitability.

As well, I keep watching the floating storage numbers increase in the Middle East with floating storage of oil now accounting for 185.1 million barrels in tankers with no-where to go. IF OPEC keeps pumping out a record production for oil over the next while, it could lead to another collapse in oil prices in their vain attempt at hitting high cost producers.

I'll leave it at that for this week! Any questions, feel free to drop me a line!

Regards,

George Murphy
Twitter @GeorgeMurphyMHA

Tuesday, May 12, 2015

Price changes for Thursday, May 14, 2015

Hi to all,

Here's what I have for price changes for this week, all ahead of our "May two-four" weekend:

Heating, stove oils and Diesel fuels to decrease by 7/10ths of a cent a litre.
Gasoline to drop by 1.8 cents a litre.

Saudi Arabia continues to break records when it comes to overall domestic production. Not letting up any, in spite of lower prices, the lead OPEC member continues to pump out product in the face of a meeting to discuss OPEC production later in June. The Saudi's pumped close on 10.3 million barrels a day last month.

In the meantime, their production continues to show a heavy build in "floating storage". With product nowhere to go, oil keeps piling up in tankers that now totals almost 174 million barrels, up almost 20 million barrels from a short three weeks ago. A strong sign that the glut continues, the fact that US domestic might start to pick up again may compound the problem of a glut in the markets, if the Saudi's don't act first.

Here's why...

The decline of rotary rig counts is beginning to taper, probably influenced by the fact that US prices for West Texas Intermediate have climbed to over $61.00US a barrel over the last three weeks. It may be a sign that US producers will come back online knowing they can get some return on their investments. Some 4700 wells are ready for a turn of the spigot to bring more oil into the US markets if prices continue up, and that could cause a breakdown and collapse again in oil prices if consumer demand doesn't rise to meet it. So far, only gasoline prices have enjoyed a slight run-up in prices as the US summer driving season approaches.

The Canadian dollar has shown mostly steady against its US counterpart, but may be showing signs of life if the price of oil keeps rising. Any turnaround of US domestic production of oil could change that quickly however. Refined product prices have also remained steady against rising oil this last week. Oil prices themselves have shown to be volatile with sharp increases, followed by just as sharp declines as market data warrants.

That's it for this week!

Regards,

George Murphy
Twitter @GeorgeMurphyMHA

Tuesday, May 05, 2015

Price changes for Thursday, May 7th, 2015

Hello everyone,

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

Heating/stove oils to increase by 1.6 cents a litre.
Diesel to increase by 2.0 cents a litre, and...
Gasoline to increase by 1.6 cents a litre.


With oil prices increasing, refined commodity prices have also been rising. Anticipated builds to inventories are slowing somewhat and may be reflective of the slowdown in US domestic production being added, or it may be a sign that demand for gasoline and related products is picking up again.

Chinese demand still remains weak amongst emerging nations. With the latest news on lower than expected manufacturing data, it has to be a disappointment for those nations hoping to export there. China remains almost shut out for the time being as a potential market to pick up any excess of supply out there.

Finally, look here in the coming days as government has announced it will put taxes back on your heat and light bill. I will be posting a petition for you all to sign and have others sign as well as we are again back to the drawing board when it comes to having the tax off heat. It is, I feel, an important issue for everyone from seniors to those on lower incomes. Simple fact of the matter is that this is just as important to me to not have a tax on heat as much as there's no tax on food!

I hope you will help me in this quest!

Regards,

George
Twitter @GeorgeMurphyMHA

Tuesday, April 28, 2015

Price changes for Thursday, April 30, 2015

Hello to all,

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

Heating and stove oils to increase by 11/100ths of a cent.
Diesel fuel to increase by 6/10ths of a cent, and...
Gasoline shows an added 2.5 cents a litre at the pumps.


Gasoline inventories continue to experience some slight drops as the run-up to the US summer driving season approaches. The traditional start of the season begins on the US Memorial Day holiday, our Victoria Day weekend. As of last week, gasoline inventories were recorded down another 2.1 million barrels.

Overall crude oil inventories out of the US last week showed another build of 5.3 million barrels.
Russia will meet OPEC members ahead of OPEC's regularly scheduled meeting in mid-June to discuss a possible cut to overall OPEC production. No doubt, the Russians would like to see a cut instituted as it would possibly raise Brent crude prices, which have been taking a pounding all this year. Present OPEC production numbers show their group producing just over 30 million barrels a day.

I'm watching rig counts as of late.
With all the news of the industry parking drill-rigs in recent months, it seems the decline in operational rigs is starting to slow. Last week saw a slight decline of 22 rigs in the US with one rig down in Canada. Any halt in decline of rigs is probably a sign that they may be starting to think about coming back online as crude prices have been seen to increase over the past ten days or so.

That's it for this week!

Regards,

George Murphy
Twitter @GeorgeMurphyMHA 

Tuesday, April 21, 2015

Price changes for Thursday, April 23, 2015

Hi to all,

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

Heating and stove oils add 2.47 cents a litre.
Diesel adds 2.9 cents a litre, and...
Gasoline shows upwards by 3.1 cents a litre.

Refined product prices were driven upwards this week as a result of, not just the increase in crude oil prices, but also by the fact that last week saw only a modest build in overall US inventories.

Gasoline demand also shows signs of picking up in the face of higher refinery capacity coming back online. With capacity up, and numbers showing a draw against gasoline inventories, it was seen as "natural" that speculators would take advantage.

But how long can the markets follow the snow job of rising world crude supplies that still shows a glut in supply? Saudi Arabia produces a near record of an added 650,000 barrels per day in March month, well ahead of what was the norm. To add to the false reading from the markets, news this morning that storage capacity continues to be taken up in the markets. With another 158 million barrels in floating storage, it makes one wonder how long speculators can go before the truth in the markets is realised.

To add to the Saudi storage concerns and the building of false demand picture worldwide, you can also add another factor that no one is talking about...Yet!

With oil rising, it's only a matter of time before smaller producers start playing with the thought of getting back into the market of selling and pumping crude oil. With US domestic production now reaching a record 9.3 million barrels a day, almost 13% more than the same time period last year, speculators surely can see that this latest round of crude oil increases may be very well short-lived.

Regards to all, and if you have a thought, be sure to leave a comment!

George Murphy
Twitter @GeorgeMurphyMHA

Monday, April 20, 2015

What I'm watching in the oil markets, and what you should too.(Part one)

People are often asking me where I think oil prices are going, and what factors I'm watching out in the markets. I guess sometimes some want to build evidence on where oil prices are going because of a vested interest, or they're simply concerned with provincial finances.

...and right they should be on the last point...

It's obvious that right from "day one", we made the mistake of simply relying on revenues gained from the sales of crude oil off our shores. It's easy to say we got lazy over economy building because we had lots of cash in the coffers. This year will prove our folly over over our dependence on the price of oil, rather than the "traditional way" of building a sustainable economy.

Even easier to say that all was misdirected in the past and that not enough was invested in our future here. Either point has validity and each point may itself be wrong.

Either way, "dependence" on oil money has gotten us into some troubles with really no one answer on how to get ourselves out of the situation we now find ourselves in. If we are to get out of the situation, we're still going to have to depend on the growth of our oil sector to do it. That, my friends, is not an easy sell, although it is a sale that can be made...IF prices remain where they are today.

Let me explain:

Factor 1
A lot has been said of the effect that smaller oil companies have made on US domestic production. Some may argue with validity that "small oil" can't keep it's head out of the water without prices being higher. With the parking of drilling rigs, it seems that their case may have some valid evidence to back the fact that $55 US would be a "boil over" point to where frackers may explore and produce to overall US domestic production again, and with Brent oil prices now starting to push $63 US a barrel and West Texas Intermediate producing sales at $50 US, we may again be on the edge of seeing smaller producers re-entering the markets. Important factor to watch is the US rig count. Published pretty much on a weekly basis, watching this number start to show stability will probably coincide with oil prices that will also do the same.

Any increase in the overall rig count will, in all likelihood, start to show another drop in WTI prices, thus dragging down Brent prices again.

Factor 2:
US demand: First, for gasoline may increase the value of some oil, but in all likelihood affect gasoline spot prices first. While refiners are making a fortune right now with oil at present levels, those profits in this sector start to diminish with increasing crude oil acquisition costs. Either way, with prices somewhat lower, any company that is fully immersed in the oil industry, from the initial search to the final product, becomes a winner under the present market conditions. I don't believe that "Big Oil" even wants to see prices high, if they can make it financially further down the food chain! Summarily, demand for both gasoline and distillate products remains tepid at best, and that's not going to be a real motivator to bring prices up.

Factor 3:
Conservation efforts/Consumer outcry: While arguments for global warming persist with a lot of evidence to back it up, even more disconcerting for increasing oil prices has been conservation efforts. Don't ever doubt that consumer outcry has also been a positive motivating factor in the efforts behind conservation and protection of the environment as well! The simple fact is that, not so long ago, consumers were upset with higher oil and gasoline prices, and that spurred on efforts of government to answer back for their constituents. Consumers wanted relief and protection from higher energy costs that influenced decision-making. has had a huge effect on world consumption of oil products, and will continue to do so in the future. Witness higher automotive mileage claims and home retrofit programs worldwide, and locally, look no further to the supposed reasoning and the justifications around the Muskrat Falls hydro-electricity project.

In part two, I'll have more factors that I use in everyday life to balance my reasonings behind energy costs, and what I watch to determine further direction in oil prices. If you have any comments, feel free to drop me a line!

I will be back tomorrow night with the final numbers for this week's price adjustments!

Regards for now!

George Murphy
Twitter @GeorgeMurphyMHA


Tuesday, April 14, 2015

Price changes for Thursday, April 16, 2015

Hi to all,
 
Here's what I have for this week's price changes:

Heating and stove oils show an added 2.21 cents a litre.
Diesel shows up by 1.6 cents a litre, and...
Gasoline shows a very modest drop of 8/10ths of a cent.


While oil prices started off this week at a modest $55.16 a US barrel (Brent), prices gradually started an increase after the US Energy Information Administration stated that we should start to see a drop in production coming from some of the US fracking fields where oil drilling rigs have been "parked" since prices retreated from historic highs. The EIA is predicting a drop of 57,000 barrels a day in May month as a result of a halt in further production because of higher prices.

Don't look for a surprise spike in prices, unless something extraordinary happens though. If prices do increase, look for rigs to go back to work and bring prices lower again.

Surprisingly, against all this, there are still strong signs and, indeed questions that need further research as to how come oil prices haven't retreated further based on other evidence out there. Over the last week, for example, crude oil in floating storage (in tankers being used for such) has risen dramatically to count at 152 million barrels. That's an added 20 million barrels of crude oil stored away over the last three weeks. As well, the prospects of Saudi Arabia increasing production this summer to a record 11 million barrels a day has yet to hit the markets.

Needless to say, if I was trading in the markets, I would be worried over the two notes here. The prospect of Saudi Arabia waving the production stick should really be enough to keep Brent prices lower again for the coming future. That prospect on the futures markets still shows little growth in crude prices. Numbers show a mere $63 US a barrel in the middle of 2016 and $68 US a barrel for the full year of 2017.

Might as well get used to lower oil for a while...

That's it for now!

Regards,

George Murphy
Twitter @GeorgeMurphyMHA

Tuesday, April 07, 2015

Price changes for Thursday, April 9, 2015

Hi to all,

I hope Easter was good for everyone and that for some it was a time of rest. At my place, between the twins, it was "chocolate madness"...

Either way, here's what I have for this week's price changes:

Heating and stove oils show a slight drop of 7/10ths of a cent a litre.
Diesel drops by 9/10ths of a cent, and...
Gasoline shows up by 1.8 cents a litre.


No doubt about it, but speculators know the start of the summer driving season is on the way, and that right now is about their only hope of scraping together any kind of a profit on their fare. April month has always been the month where we have historically seen that run-up to the US Memorial Day weekend (our May 24) that marks the start of the heavy demand gas guzzling season.

Or, at least that's what investors are hoping for!

The Canadian dollar increased slightly on news of rising oil. Earlier in this session saw skeptics balk at talk of the lifting of sanctions in Iran that would lift world crude stocks up by another one million barrels a day. They think that it will take some time to bring Iranian crude back to the markets, as the sanction agreement talks about removing sanctions as Iran conforms to the agreement, rather than immediate. The deal comes into full effect by June 30th.

Talk in the markets also reflected on Saudi Arabia increasing prices to its Asian customers, probably in a move over concerns of war costs as the drama in Yemen continues to unfold, and not because of any shortage in product availability. The Saudi's have to be careful about losing market share to other sources of oil out there. At this point, they really can't afford to lose any, now that they have a war of their very own!

"Man's inhumanity to man..."

That's it for this week!

Regards,

George Murphy
Twitter @GeorgeMurphyMHA 

Price changes for Thursday, April 9, 2015

Hi to all,

I hope Easter was good for everyone and that for some it was a time of rest. At my place, between the twins, it was "chocolate madness"...

Either way, here's what I have for this week's price changes:

Heating and stove oils show a slight drop of 7/10ths of a cent a litre.
Diesel drops by 9/10ths of a cent, and...
Gasoline shows up by 1.8 cents a litre.


No doubt about it, but speculators know the start of the summer driving season is on the way, and that right now is about their only hope of scraping together any kind of a profit on their fare. April month has always been the month where we have historically seen that run-up to the US Memorial Day weekend (our May 24) that marks the start of the heavy demand gas guzzling season.

Or, at least that's what investors are hoping for!

The Canadian dollar increased slightly on news of rising oil. Earlier in this session saw skeptics balk at talk of the lifting of sanctions in Iran that would lift world crude stocks up by another one million barrels a day. They think that it will take some time to bring Iranian crude back to the markets, as the sanction agreement talks about removing sanctions as Iran conforms to the agreement, rather than immediate. The deal comes into full effect by June 30th.

Talk in the markets also reflected on Saudi Arabia increasing prices to its Asian customers, probably in a move over concerns of war costs as the drama in Yemen continues to unfold, and not because of any shortage in product availability. The Saudi's have to be careful about losing market share to other sources of oil out there. At this point, they really can't afford to lose any, now that they have a war of their very own!

"Man's inhumanity to man..."

That's it for this week!

Regards,

George Murphy
Twitter @GeorgeMurphyMHA

Tuesday, March 31, 2015

Price changes for Thursday, April 2, 2015

Hi to all,

With operation "Decisive Storm" underway in Yemen, crude oil prices immediately increased early in the regulatory session with Brent prices mostly affected. But with a less likely threat to shipments of oil leaving the area, it was seen to retreat again by Monday. Only question now for the Saudi's and the ten nations forming their forces in the area is: How long can they go before they affect their own bottom line? Wars cost money...

Refined product prices also showed a retreat from their weekly high. Numbers started high as a result of the Saudi Arabian incursion, but are again in retreat.

Here's what I have for this week:

Heating and stove oils show an added 1.75 cents a litre.
Diesel shows a drop of just 6/10ths of a cent, and...
Gasoline shows an added 7/10ths of a cent.
*Don't forget winter blending may throw off the Heating and Diesel fuel numbers somewhat!

Crude oil shows an increase in overall "floating storage" again this week with crude oil stored in tankers ready for sailing. It amounts to an extra 139 million barrels that has nowhere to go. That's up from 134 million barrels in the previous week.

Look for an immediate downwards track for oil if Iran nuclear talks result in Iranian crude entering the markets. Analysts say that an added 1 million barrels a day could enter the world markets if sanctions are lifted. We'll find out later if indeed talks were successful.

That's it from me this week for your update on fuel prices!

Feel free to drop a note if you have any questions.

Regards and make it a good week!

George Murphy
Twitter @GeorgeMurphyMHA

Tuesday, March 24, 2015

Price changes for Thursday, March 26, 2015

Hi to all,

In what was a sleeper of a week on the markets, very little of anything was happening, including moves to any prices. I can't remember the last time they moved as little as this. But here they are:

Heating and stove oils to drop an even penny.
Diesel prices down by 1.6 cents a litre, and...
Gasoline up just 9/10ths of a cent.

All eyes focused on the challenges that are coming to US storage capacity this week as the oil markets are struggling with the fact that US domestic production has literally taken up available storage space, just another reason why analysts are talking about another possible slide in prices to come. It is estimated that, if production maintains itself and export and consumption of oil don't weigh in, we could be looking at all capacity taken up in the Cushing, Oklahoma storage and pricing facility. Some are predicting that prices could bottom out at $20 US a barrel if that happens!

The second possible threat to lower oil prices comes from what are called "teapot" producers out of Russia, who are faced with crude oil runs and nowhere to export except markets that compete with OPEC. Interestingly, Russian exports add another 800K barrels a day to worldwide production, adding to the glut.

There's lot's of downward fundamentals playing on oil, but the only upside to any increase in oil prices lately has been the thought that the US will soon begin to raise interest rates. Speculation over any increase in rates has dropped the US dollar against the Canadian dollar in the last few days. Speculators have been adding oil and gold to their portfolio's in answer to any possible rate increase.

The Canadian dollar has increased against its US counterpart by close on 2.5 cents this last week as a result, almost negating any price increases to refined product prices as a result.
That's it for this week!

...and I said nothing was happening!

Regards,

George Murphy
Twitter @GeorgeMurphyMHA

Tuesday, March 17, 2015

Price changes for Thursday, March 19, 2015

..and here's the final numbers for Thursday's price changes:

Heating and stove oils show a drop of 4.65 cents a litre.
Diesel shows down by 5.6 cents a litre, and...
Gasoline shows a drop of 3 cents even.

Just a quick note here on winter pricing that throws the Heating and Diesel numbers out of kilter sometimes. I usually tell everyone that these numbers can be used as just a "guide" on which direction prices will be going due to the use of "anti-freeze" agents such as kerosene and jet fuels in the various blends. That usually carries until the end of April month.

In other news, the US may be running out of storage room. They're actually pumping that much, they expect to see the coffers filled by June month if production keeps growing from domestic sources. That could sell trouble for oil prices. No sense producing if you can't store the stuff, let alone sell it.

I'll leave it at that for now. I'm going to be watching the US inventory data tomorrow when it is released. It should be an interesting play tomorrow as we get to see if stocks will still show an increase to crude oil reserves that will probably keep those oil prices low.

Feel free to pass this note on!

Regards,

George Murphy
Twitter @GeorgeMurphyMHA

Tuesday, March 10, 2015

Update #2: Final numbers for Thursday price changes

Final numbers for Thursday price changes...

Here's what I have for price changes for this Thursday. After today's drop, it all added up to just a little bit more...

Heating and stove oils to drop by 7.42 cents a litre.
Diesel to drop by 10.1 cents, and...
Gasoline shows a drop of 2.2 cents a litre.

It was great to see a return of distillate prices to something of the norm before the run-up last week. Unfortunately, prices dropped a little later than predicted, but they're still showing in this week's numbers instead.

Prices dropped further today as speculators pulled out of the distillate markets, the reason being that refiner capacity is almost back to normal with just 690,000 barrels a day offline south of the border. it's also the simple fact that things are going to start to warm up now as we get back towards spring. It was time to get out.

Gasoline, not so much, although tomorrow's inventory numbers may reflect the reality that "demand" is simply not there. That may be enough to keep gas prices from starting further down, but I'm keeping a close eye to the usual excuse used as we get closer to the "summer demand" seasonal run-up as we get closer to May month's traditional start to the driving season.

That's it for this week!

George Murphy
Twitter @GeorgeMurphyMHA 

Monday, March 09, 2015

Update #1: Numbers for Thursday, March 12, 2015

If you're a Heating, stove oil or Diesel fuel user and you subscribe to this blog, you might appreciate this one. I figured that I would give all notice of a good retreat in prices so you can call the shot on your delivery this week! This is the notice I posted to my Facebook page:

Six days out of seven and here's your update from the markets so far. One day to go...

Remember last week I was telling all that we should start to see some steep discounting to the distillate fuels, that they should be returning back to the start of the run-up in pricing?

Looks to be true...

So far, here's what I have...

Heating and stove oils are pointing to a drop by 7.03 cents a litre for Thursday.
Diesel shows a drop of 9.9 cents a litre at the pumps, and...
Gasoline shows just a two cent a litre drop.

Remember that we're still going to be affected by the winter blending mix, so Heating and Diesel numbers may be off slightly. Gas as well wasn't hit too hard by the run-up in prices, but was still affected. That's why it isn't down as much as the distillate fuels, so, if you hang off for a couple of more days, you'll save a small fortune at the heating and Diesel levels...

Pass this on and give all a heads up on this one. I'll be back tomorrow night with the final numbers.

Regards,

George
Twitter @GeorgeMurphyMHA 

Tuesday, March 03, 2015

Numbers for Thursday, March 5, 2015

Final numbers for Thursday, March 5th are in. Here's what I have for this week's price changes:

Heating and stove oils to drop by 1.34 cents a litre.
Diesel shows an added 3.7 cents a litre, and...
Gasoline shows an added 4.5 cents a litre.

I can't say that I'm not surprised that heating and stove oils didn't show more of a retreat than they are here. What I am surprised about is that the drops didn't start to hit the numbers until two days ago when they should have affected those fuels immediately after last Wednesday when they first showed a retreat!
With both Diesel and Gasoline taking a hit again this week because of scattered refinery outages in the US northeast and ongoing labour disputes, we shouldn't be surprised to find speculators taking advantage of "shortfalls" in production...all in spite of plenty of product on hand.

All Canadians should be asking themselves why we have to be so dependent upon the US markets for the pricing of a product that we produce so readily in this country. Is it time for a "Made in Canada" price to all our oil and refined commodity prices?

In the meantime, with oil showing some signs of "life" in the markets, keep your eyes to a return of smaller producers to the markets as crude prices again may make it affordable for the same small producers to enter back into the markets. My theory is that oil prices may remain low as smaller companies put product back into the markets, again weighing heavily on OPEC finances and influence.

That's it for this week! feel free to share this and "see you at the pumps!"

Regards,

George Murphy
Twitter @GeorgeMurphyMHA

Tuesday, February 24, 2015

Price changes for Thursday, February 26, 2015

Updated numbers for Thursday, February 26th price changes:

Heating and stove oils to add 4.08 cents a litre.
Diesel fuel to add 6.4 cents a litre, and...
Gasoline to add 1.4 cents a litre.

If there's any good news out of this, it's that after today's trading, we should be back at seeing a drop in prices to diesel and heating oils next week. Spot prices returned today to "pre-runup" levels. They retreated today by about 25 cents a US gallon. I guess the speculators decided to get out before the latest word on inventories building tomorrow.

If you have enough to go it until next week, then you might want to hold off until then. You're also a little better off if you got the phone-call in before the price is due to increase midnight tomorrow.

The Canadian dollar mostly held steady as compared to the previous session. Last week also saw the total rig count remain mostly steady, which leads me to believe that smaller producers are seeing a flattening out of prices and are getting set to "explore" again. I'll keep watching that one.

Anyway, word is to hold off again for another week if you can at all do it to see what happens with the "retreat" next week.

Pass the word!

Regards,

George Murphy
Twitter @GeorgeMurphyMHA

Tuesday, February 17, 2015

Price changes for Thursday, February 19, 2015

Final numbers are in for this week, and yes, increases across the board again.
Here's what I have:

Heating and stove oils show an added 3.49 cents a litre.
Diesel shows up by 4.4 cents a litre, and...
Gasoline shows another increase, by 2.6 cents a litre.

Libyan production is almost shut in again with revolution there the order of the day. That's helped increase Brent crude prices almost $7 US a barrel this week alone, and since the last price setting.
West Texas Intermediate prices are up as well, this time by $4 US as rigs come off-line from the fracking fields. There's been a steady drop in drilling over the past couple of weeks. However, keep in mind that a lot of these wells have already been drilled and are producing, so, I would expect to see continued building of overall US domestic production.

What has helped increase oil prices are some worldwide disruptions in production, in particular Libya, but also some drop in OPEC production, but only slightly. I'll have a look at the latest US inventory reports either tomorrow or Thursday when they are next published.

Keep an eye to the oil markets tomorrow (Wednesday) and see if traders are also thinking of the possibility of the US reporting further inventory building this last week!

A last point: It seems US producers are going to have another problem. Simple really, but it seems that they're actually starting to run out of room to put their oil once they get it out of the ground. It's a problem that most OPEC countries have had in a while. OPEC producers reportedly have close on 130 million barrels in "floating storage" right now. The US projection is for them to have all available storage space to be taken up as of the end of June.

We're not quite out of the woods with oil prices yet...

That's it for now!

Regards,

George Murphy
Twitter @GeorgeMurphyMHA

Tuesday, February 10, 2015

Price changes for Thursday, February 12, 2015



Hi to all,

Numbers are in for this Thursday's price changes. Here's what I have:

Heating and stove oils are up by four cents a litre.
Diesel prices to increase by 4.5 cents, and...
Gasoline shows an increase of 2.6 cents at the pumps.

Slightly off from what was predicted for gasoline last week, but all up just the same. Keep in mind as well that the numbers for both heating oil and Diesel may be off somewhat due to the winter blending mix…
 
Oil trading up all this week didn't help the situation any as the Canadian dollar lost most gains from earlier this session. Right back to where we were last week. In the meantime, over the past week, Brent crude gained about $4 US before a slight retreat today.

Most of today's drop in oil prices is directly concerned with speculators thinking that there are still worries over "over-supply" in the markets. They're anticipating that the US inventory reports out of the Energy Information Administration will show builds in overall crude oil inventory. Hopefully, gains in inventory will also be made to refined products as well to "head off" the latest increases in heating and other fuel prices next week!

That report will be out around noon our time on Wednesday. I’ll tweet the numbers they find later tomorrow, so you might want to follow me there...

That’s it for now,

Regards,

George Murphy
Twitter @GeorgeMurphyMHA