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Tuesday, February 09, 2016

Price changes for Thursday, February 11, 2016

Good evening everyone,

Here's what I have for this week's price changes, keeping in mind winter blending that may throw off the heating oil and diesel numbers a little.

*Heating oil shows a drop of 1.3 cents a litre....
*Stove oils show down by 1.3 also.
*Diesel shows a half penny drop, and...
*Gasoline shows a huge drop of 4.7 cents a litre.


Highlights


*As predicted a few weeks ago, it certainly appears that a price war of sorts will start up against oil prices with most OPEC nations raising production in January month by an added 280 thousand barrels a month. Current production was a total of 32.6 million barrels a day. That hit Brent prices particularly hard today as most of this production would most likely be sent to the European markets. Keep reading...

*Still no real sign of a drop in US domestic production after a slight drop over the last six months. US domestic production in January remains at a  stalwart 9.2 million barrels a day. Pretty important signal to Saudi Arabia that they're going to have to drive prices lower, if they hope to knock out US domestic production as an important player in world oil prices. That, and compete directly with US customers for crude oil.

*The International Energy Agency is warning that low prices may continue for some time yet as all countries currently are producing 1.75 million barrels a day more than what the world actually needs. That's up another 250,000 barrels a day from their previous needs of world demand.

*Add to the mix, Kuwait as another country and OPEC member setting themselves up to produce more crude oil in the final quarter of 2016. They're set to increase production from 2.5 million barrels a day to 3.15 million by the end of the year.
Talk about exacerbating the problem!

*Finally, I'm surprised to hear that Nalcor will be looking for an increase to allowable expenses for added burning of oil in Holyrood! All things considered, prices for #6 oil that they use is now well below what they adjusted for months ago when we received a drop in electricity rates. Hopefully, the consumer advocate will defend this "ask" on the part of Nalcor and champion a drop in electrical rates as a result of the drop in price of the oil they use!

That's it for this week!

Regards,

George Murphy
Twitter @GeorgeMurphyOil

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