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Tuesday, October 27, 2015

Price changes for Thursday, October 29th, 2015

Hi to all,

Here's what I have for this Thursday's price changes:

Heating oils to increase by 6/10ths of a cent a litre.
Stove oil adds 6/10ths of a cent a litre.
Diesel fuel adds 5/10ths of a cent, and...
Gasoline adds an additional 6/10ths of a cent a litre.

Consumers to see a slight increase to all fuels this week
St. John's, NL, October 27, 2015- Consumers in Newfoundland and Labrador can expect to see a rarity in the markets this week when the Public Utilities Board moves to adjust prices this coming Thursday, according to George Murphy, group researcher with the Consumer Group for Fair Gas Prices.
"While commodity prices have remained relatively steady this past seven days, it's the price of oil that has been slipping, and that has dragged down the Canadian dollar, an important factor in figuring out Canadian commodity prices," Murphy said." We've lost two and half cents against the US greenback since the 20th of the month, and that means a rough two cents taken from consumers. We should be looking at a drop in prices, if the dollar stayed the same as last week's paring with the US dollar".
"In the meantime, lower oil isn't crimping on oil company profits. British Petroleum is the latest to step forth and report a $1.8 billion dollar profit over the last quarter, and that's a good $600 million more than what was expected. I expect other integrated companies to report good numbers in the coming days. Anyone with refining capacity is doing well, and this shows it. It's not just about pumping oil. It's all about the finished product as well.
"I'm looking at this week's Energy Information Administration's inventory data tomorrow to get a read on the future of the gasoline and distillate markets. I'm betting on, not only a build in inventories of oil, but of gasoline as well, as refiners seem to be coming back online from winter maintenance schedules. Refinery outages were reported at 1.8 million barrels last week, but data is now showing 1.1 million barrels of processing remains offline. I'm betting on more gasoline to be added, and perhaps another run down in prices later in the day."
For more information, please contact;
George Murphy
Twitter @GeorgeMurphyMHA

Tuesday, October 20, 2015

Price changes for Thursday, October 22, 2015

Hello to all,

Here's what I have for Thursday price changes:

Heating oil to drop by 3.1 cents a litre*.
Stove oils to drop by the same 3.1 cents a litre.
Diesel to drop by 3.2 cents a litre*, and...
Gasoline to drop by 3.8 cents  a litre.

*Note that both heating oil and Diesel fuel are subject to the winter blending now, so these numbers can just be used as a guide and not the actual that may occur!

Consumers to get another break at the pumps this week 

"Consumers can expect to see another break at the pumps when the Public Utilities Board moves to adjust prices this Wednesday midnight", according to George Murphy, group researcher and co-founder of the Consumer Group for Fair Gas Prices. "Continued builds of gasoline inventory in spite of refinery outages due to winter maintenance have led to some good builds in inventories of gasoline. With the consumers of North America driving a little less than in summertime, it has started to reflect and impact prices substantially, and, this week too as predicted."

Final market numbers last week began to show that there was a substantial break for consumers about to hit, and I put the "warning" out of an impending drop in prices for this week that is coming to fruition. That prediction showed three cents across the board, and the final numbers were pretty close to that," Murphy said.

"I'm still seeing some heavy production out of OPEC and non-OPEC producers which continues to compound and lower oil prices. Floating storage figures still show a substantial amount of crude oil with nowhere to go, almost 164 million barrels in tankers, waiting for the call to sail.

"Again, with a possible end to winter refinery maintenance and turnover about to end, the return of refineries back to production has a possibility yet of impacting gasoline and other refined commodities down further. With 1.7 million in daily refining capacity offline right now, you can imagine the impact on the markets when they start adding again to inventories.

Most stations selling gasoline are already below a dollar a litre, and can be expected to sell a little lower as we get later in the week. The trend of prices looks steady for now, but once refining capacity kicks back in, should start to fall again".

For more information, please contact:
George Murphy
Group researcher
Consumer Group for Fair Gas Prices
Twitter @GeorgeMurphyMHA

Tuesday, October 13, 2015

Price changes for Thursday, October 15, 2015

Hi to all,

Here's what I have for this week's price changes:

Heating oil shows a drop of just 3/10ths of a cent a litre.
Stove oil shows down by the same 3/10ths of a cent.
Diesel fuel shows a drop of 2/10thsof a cent a litre, and...
Gasoline shows a drop of 7/10ths of a cent.
*The real news may come next week on further drops in gasoline, diesel and heating oil prices as spot pricing has retreated somewhat the last two days. So far, gasoline shows a drop of three cents playing through on lower oil and a stronger Canadian dollar. Stove, heating oils and diesel all show the same trend in for next week as well. Anything can happen to change that in the coming days however!

In the news

OPEC production figures show a new record
OPEC produced almost 10.7 million barrels a day in September according to one report today, that probably led speculators when the glut of oil in the markets will end. While the union of oil producers wonders when the glut will lead to higher prices, they show no signs of reigning in production in an attempt to maintain market share. Oil in "floating storage" again continues to climb, signaling an abundance of oil with nowhere to go. Floating storage now shows close to 178 million barrels waiting aboard tankers with "no sale" in sight.
IEA lowers world demand growth for 2016
The International Energy Agency has lowered its forecast for oil demand growth by another 600,000 barrels a day, already adding bad news to a market well over-supplied. The IEA has dropped worldwide demand for oil to 95.7 million barrels a day. Over the last five years, the IEA has tracked a yearly increase in demand of oil products by 1.8 million barrels, but has dropped that back to 1.2 million barrels of added consumption for 2016.
Iraq production well up ahead of Iran's market "re-entry"
Iraqi production in the month of September has hit 4.2 million barrels a day, well up from 3.8 million recorded a few short months ago. While Iran waits in the wings to begin production to a market free from sanctions, Iraq is simply trying to maintain their own customer base, ahead of Iran's re-entry with an added 500,000 barrels  a day output.
That's it for this week!
Twitter @GeorgeMurphyMHA

Tuesday, October 06, 2015

Price changes for Thursday, October 8, 2015

Hi to all,

Here's what I have for this week's price changes:

Heating and stove oil to increase by 4/10ths of a cent a litre.
Diesel fuel shows no change, and...
Gasoline shows an increase of 2/10ths of a cent a litre.

* A couple of notes first off. Winter blending is now in effect for heating oil as well as Diesel fuel. From now until later in spring, my numbers for these fuels will be slightly off because of the addition of jet fuel (kerosene) that is added as an anti-freeze agent. That's a fuel that I can't track as of yet. Use these numbers as a "guide" on the direction these fuels may go, and not the definitive.

In the markets

Russia and Saudi Arabia in talks
Interesting to hear that both countries are into discussions around the possibilities of controlling the outflow and production levels of crude oil. Both countries have a direct interest in supporting oil prices, but it could come at a cost if they're successful in limiting crude oil output.

At least, in the short term.

They run the risk of bringing back online all those wells that had been shut in as a result of lower oil prices, and in fact, if they do succeed in increasing oil prices, they may end up losing market share to US domestic producers and those countries who are waiting to also enter into the export markets. Countries like Venezuela and Ecuador are itching for oil prices to come back and they no doubt, will put out more oil to make up for lost revenues.

Still waiting in the wings however, is also the prospect of low China demand and Iran's entrance into the markets later this year in December, or in January, 2016. The entrance of Iran will add an immediate 500,000 barrels into an already over-supplied marketplace.

Oil up on lower US domestic production
The price of oil increased today on speculation that US domestic production has taken a pounding as a result of lower oil prices. Numbers are showing that production has dropped off anywhere from 500,000 barrels a day to as low as 150,000 barrels. That being the case, US domestic production rests somewhere around nine million barrels a day. Keep in mind though, that with any rapid rise in prices, there will be a response by the small oil producer out there. The spigots can be quickly turned back on.

Turning point?
"We're not there yet".
As some oil companies have said in the media, there's a belief that we've reached a turning point where they are saying a recovery is on the way, but they're not so eager to carry on with a return to oil $100 a US barrel. Predictions of a "recovery" include $57 US a barrel in 2016 and slightly more in 2017. What I do think is that they don't consider a rapid response from small US producers in the equation. $57 US is not a "recovery". It's a factor in determining if small producers turn the drill bits into the ground again.

I'll leave it at that for now,



Twitter @GeorgeMurphyMHA