Price changes for Thursday, April 28, 2016

Hi to all,

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

*Heating and stove oils show an increase of 2.9 cents a litre.
*Diesel shows an added 2 cents a litre, and...
*Gasoline shows an added 1.6 cents a litre at the pumps.

Market highlights

*While the Canadian dollar has risen slightly in the last week against its US counterpart, it still wasn't enough to absorb a corresponding rise in the basic cost price of most fuels I measure. All spot prices have shown a startling increase that goes hand in hand with rising oil prices. As a result of rising oil, the Canadian dollar has increased a rough 1.3 cents against the greenback.

*Consumers in Newfoundland and Labrador will feel the pinch this coming winter with the end of the Heating Rebate program in this year's provincial budget.
Consumers in Labrador will particularly feel the hardest hit living in a harsh environment with no benefit of the rebate program that saw considerable money to consumers to assist them with paying higher heating costs.

       Consumers will also be tagged with an added two percentage points to heating costs.
Government should re-instate the rebate program and render assistance to those who will be faced with higher energy costs. Again in this province, people will be forced to choose again between food and heat!

        Bring back the rebate and remove the tax on the necessities like heat!

*As predicted months ago, a new bottom line for the start of the return of US domestic drilling programs is slowly starting to form a picture of where we can all expect oil prices to top out.
$50 US is the new floor for oil where it is widely expected to see US domestic drilling and production programs to recover from the last year's drop in oil that initially shut down drilling.
It's also widely seen as a reason why speculators have been pouring dollars into oil this week. However, the spectre of a world over-supply of oil still hangs in the balance, so there's still predicted to be some volatility in pricing.

*Gasoline demand has picked up in recent weeks with US gas production alone hitting 9.4 million barrels a day, an increase of 3.9% over last years figures!

That's it for this week!

Regards,
George Murphy
Twitter @GeorgeMurphyOil

Price changes for Thursday, April 21, 2016

Hi to all,

Here's what I have for this week's price changes. With winter blending over until the fall, the numbers should be more accurate for heating and diesel numbers.

*Heating and stove oils show an increase of 1.4 cents a litre.

*Diesel fuel shows an increase of 1.7 cents a litre, and...

*Gasoline shows no change.

Market highlights

Canadian dollar up

*The Canadian dollar continued to rise against the US dollar this past week, increasing by an average two cents against the Greenback. While US spot prices increased for gasoline this past week, the rise in the dollar absorbed any increase to Newfoundland and Labrador consumers.

Budget reaction

*The budget will prove to be a very painful one this year with increases to energy consumers, especially for those who use the main transportation fuels of diesel and gasoline.

         Both fuels will increase June 2nd by close on twenty cents a litre by the time taxes are accounted for on top of the proposed 16.5 cent a litre increase. Total provincial take in road taxes alone will amount to 33 cents a litre, the highest in Canada. The rumours I heard of a possible five cent a litre increase in the works makes the actual that occurred that much harder, and it's really obvious that consumers could see the return of fuel surcharges to anything being moved by ground transportation.

         Food prices could again be on the upswing in June month with additional fuel surcharges on freight and tourism efforts geared toward drive-in tourists may have been knee-capped with a broken promise from the markets of the potential for lower summer fuel prices.

        This increase makes it harder for everyone, including those who are in business and needs to be rejected outright!

Doha meeting failure

*Meetings in Doha, Qatar aimed at the world's major producers limiting production were a failure this past Sunday as agreement on reaching production limitations failed to meet with any concrete actions by both OPEC and non-OPEC producers. People are saying that they "need more time" to achieve the objectives of any world cut to production and they may try again for agreement in June at the next regular meeting of OPEC.

             I'll keep a close eye on that...

That's it for this week.

Be sure to let your voices be heard over the budget. Call and contact your MHA and be sure to let them know your simply not going to take this one lying down.

Any questions, feel free to drop me a note, and don't forget to share this note!

Regards,

George Murphy

Twitter @GeorgeMurphyOil

Talks in Doha, Qatar a failure from the start

It's not good news for anyone hoping to see oil prices continue to rise.

Talks in Doha, Qatar amongst some of the world's major oil producers failed to reach a final agreement on cuts to production that would have helped to stabilize oil prices.

Hopes amongst attending nations was to see an agreement hammered out that would increase oil revenues to these oil nations, but Saudi Arabia threw a wrench into talks at the start of the day with an expectation by the world's number one producer and exporter that all OPEC nations would participate in production cuts. Word silently hinting to Iran to join in.

It was the Saudi's last hope, as well as OPEC's...

Iran, the major bone of contention, was expected to follow along as a fellow OPEC member, and sign on to the "gentleman's agreement" to maintain output at January levels ranging close to 32.4 million barrels a day. Iran, fully aware of it's own standing amongst OPEC members, already had in place it's own position as regards to their own nation's output: They fully expected to replace lost market-share from sanctions placed on the OPEC member in UN resolution 1636 that saw production curtailed and shut in.

Saudi Arabia was an OPEC member that fully benefitted from Iran's lost customer base...

Was there any hope of these nations reaching consensus in Doha based on a mutual dislike for each other?

While some thought there would be, it seems that the conditions were already set in the oil markets for a complete and utter race to the bottom of the barrel to oil prices. While some thought that $40 US was a new bottom, it seems more than likely that a downwards slide in oil prices is about to begin again.

While this is an oil war no side will win, both fully deserve the market-share they so rightfully deserve.

"Pump madly and keep pumping away" seems to be the new OPEC order of the day, every day that much closer to the end of the organisation that held world economies hostage for so long.

Somehow, it all seems so fitting...

Regards,

George
Twitter @GeorgeMurphyOil

Price changes for Thursday, April 14, 2016

Hello to everyone,

Not good news if you're into low prices for all fuels. With winter blending now a "thing of the past" until the fall, the numbers for heating oil and diesel fuel should show more accuracy in the next two weeks.

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

*Heating and stove oils show an increase of 2.9 cents a litre.
*Diesel fuel shows an increase of 2.3 cents a litre, and...
*Gasoline shows an added 3.3 cents a litre at the pumps.

Market highlights

*I'm expecting a hit on this Thursday's provincial budget.
      It shouldn't be any surprise if we see government increase its revenue stream by increasing the provincial road tax component of both gasoline and diesel fuel. Possibilities amount to anywhere up to a nickel is being kicked around and is within the realm of possibilities. Up to five cents a litre is being heard out there, but my sources simply won't confirm this.

*Talk in the international oil markets all are focused on April 17th's important meeting set for Doha, Qatar between OPEC and non-OPEC producers attempting to hammer out an agreement on limits to production, all in a vain attempt to give support to oil prices. Oil has been trading well up this week, mainly on speculation that this meeting will bring a measure of success in helping any recovery in oil prices.
       Norway has already stated that they will not be participating. Iran has said a "yes" to attending the meeting. I wonder if Canada will be represented?

*US inventories of crude oil took a dip last week dropping nearly 4.9 million barrels as refineries in the US picked up speed and output. The uptick in capacity utilisation meant an increase in gasoline inventories last week of 1.4 million barrels. But the news on that front wasn't enough to stop the run-up in gasoline prices on the NYMEX exchange ahead of the traditional start of the US summer driving season. Gasoline spots increased along with crude oil acquisition prices.

*Oil prices have increased by an average $5 US on both West Texas Intermediate and Brent crude prices this last seven days, while the Canadian dollar has gained a rough two and a half cents against its US counterpart in the same timeframe.

I'll leave it at that for now.

Regards,

George Murphy
Twitter @GeorgeMurphyOil

Price changes for Thursday, April 7, 2016

Hi to all,

Here's what I have for this week's price changes. Keep in mind the winter blend that affects both heating and Diesel numbers!

*Heating and stove oils both show a drop of 2.6 cents a litre....
*Diesel fuel shows a drop of 3.4 cents a litre, and...
*Gasoline shows a modest drop of a half penny a litre.

Market highlights

*Oil started another retreat this week as speculators began to doubt whether an agreement would be reached on total output levels by both OPEC and non-OPEC members. According to a news source, an agreement has been reached ahead of an upcoming meeting in Doha, Qatar on April 17th.

*Iran has no intention of signing on to the fixed output agreement at this point. Production levels there continue to increase along with that of Iraq, who both helped to add an additional 90,000 barrels on to OPEC's total March output.

*Last Wednesday's inventory report from the EIA was a little bit bullish and probably gave a good snapshot of where prices may be headed in the next bit. While distillate prices are lower because of warming US weather, gasoline remains steady ahead of the summer driving season-for now.
The report showed an increase in refiner capacity, growing output an additional two percentage points. While gasoline inventory was down, the numbers seem to show that gasoline demand can be met for the rest of the summer. That helped gasoline spot prices, as well as futures prices, start a slow retreat. That's why we're looking at a very modest drop in prices this week.

That's it for now!

Regards,

George Murphy
Twitter @GeorgeMurphyOil