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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!


George Murphy
Twitter @GeorgeMurphyMHA

1 comment:

nyi said...

All I read here was that the drop in the Canadian dollar of 2 cents was the BIG Factor in the rise again this week. The other conditions you stated were reason enough in the past to cause a drop in fuel prices. I doubt that these are added reasons for the climb again. Oh wait ... maybe they are as we do have to have a reason for this gouging. It's getting out of hand now, and there is nothing just in ripping off consumers at the pumps!