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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