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.
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,