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
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!