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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

1 comment:

Jennifer Whatley said...

Really appreciate your insights on gas and oil pricing, I'll be sure to include a link to your blog on my heating oil prices website