Price changes for Thursday, June 2nd, 2016

Hi to all,

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

*Heating and stove oils show a drop of just 1/10^th of a cent a litre.

*Diesel fuel shows an increase of 5.2 cents a litre, inclusive of the new government road tax, and...

*Gasoline shows an increase of 20.9 cents a litre, inclusive of the new government road tax increase.

Market news

OPEC meets June 2^nd in Vienna

*OPEC will hold its next meeting later this week in Vienna to discuss further possible measures to help support oil prices. Saudi Arabia hopes to arrange a hold in production to help support prices, but the possible measure is not coming to fruition with OPEC members Iraq and Iran, who have increased production to capture more market share.

     Speculators and analysts are out there thinking that nothing of consequence will come from the meeting as OPEC has a history of it’s own members cheating on self-imposed quotas.

Budget a done deal

*Here in Newfoundland and Labrador, the provincial budget passed and the notion of higher taxes on most transportation fuels ahead of the increase in HST in July is now reality. The budget passed earlier this afternoon by a 26-10 margin.

   Bill #20 dealing with allowing that increase to the gas tax was passed in the House of Assembly just last week.

That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil

Price increases across the board for Thursday

Hi to all,

Here are the final numbers for this week's projected fuel price changes:

*Heating and stove oils add 3.7 cents a litre....
*Diesel fuel is up 3.6 cents a litre, and
*Gasoline shows an increase of 2.7 cents a litre.

Market highlights

Increase to road taxes means a huge bump at the pumps
*Today in the House of Assembly, the government passed the motion allowing for an increase to the road tax collected on gasoline to be instituted June 2nd.
The increase, plus the applicable increase in the HST works out to an additional 20.9 cents a litre on the present price for gasoline.
With today's price change prediction in hand, the price at the pumps would go from $1.13.8 cents a litre to $1.34.8 cents a litre.

Demand still up ahead of US Memorial Day holiday
*As the US memorial Day holiday approaches in the US next week, gasoline prices on the New York Mercantile Exchange keeps rising, this week to hit $1.64 a US gallon. Anticipated demand through the summer is the chief cause of these increases, along with a rising US dollar against the Canadian dollar.
       The Canadian dollar has lost a rough two cents this past week against its US counterpart.

       I'll leave it at this for now. There's lot's of news out there, but Bill#20 seems to be the major story right now.

Regards,

George Murphy
Twitter @GeorgeMurphyMHA

Price changes for Thursday, May 19, 2016

Hi to all,

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

*Heating and stove oils to increase by 2.9 cents a litre....
*Diesel shows an additional 3.2 cents at the pumps, and...
*Gasoline shows an added 4.2 cents a litre!

Market highlights

*Disruptions are the order of the day
With wildfires in Alberta now threatening both work camps and oil fields themselves, the western Canadian province has also another distinction, being another region of the world that is adding to a supply disruption.
      Almost 600,000 barrels has so far been shut in. That goes hand in hand with Nigeria, also showing some 700,000 barrels a day shut in due to strife in the oil-producing region of that country. Libya also is affected with an ongoing internal struggle for power that has dropped output from the North African country to 200,000 barrels a day.
      Finally, with US domestic production taking a pounding, a drop in production of close on 800,000 a day since the oil crash has some wondering just how quickly the world over-supply is being taken up.
      These disruptions alone amount to 3.5 million barrels a day drop from last year, and we haven't even touched on other projects put on hold because of the crash in other oil-producing countries.

*Demand for gasoline rises
      Gasoline demand is picking up again ahead of the US summer driving season.
      Demand for gasoline products is up 5.1% from the same four week period last year, according to the US Energy Information Administration. That's probably enough to see traders get back into the markets and force up prices to match demand.

       Just another reason why you and me are going to pay for it this week.

That's it for now!

Regards,

George Murphy
Twitter @GeorgeMurphyOil

Price changes for Thursday, May 12, 2016

Good evening to all,

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

*Heating and stove oils to drop by 8/10ths of a cent....
*Diesel fuel to drop by 6/10ths of a cent, and...
*Gasoline to drop by 2.2 cents a litre.

Market highlights

*Saudi Arabia to continue to pump
Saudi Arabia, set to replace it's present oil minister Ali Al Naimi, says it will continue to follow conditions it has recently set in order to maintain production at January levels. The new Saudi oil minister, Khalid Al Falid said he would maintain policies currently in place by his predecessor.

          However, that goes contrary to statements made by the head of Saudi Aramco, Amin Nasser, who said plans are being made by the state-owned company to expand capacity by next year to an added one million barrels a day from the Shaybah oil field. It will be interesting to see how other countries respond as, I believe the Saudi's are setting themselves up for an "unrestricted oil war" against other oil producing nations.

*Canadian dollar falls
The Canadian dollar fell in the last few days an average of 2.5 cents over the last week as both a weak economic outlook and the shaky ground beneath oil prices saw the dollar retreat against the US greenback.

*Latest US inventory report
With US domestic oil production still falling, this month averaging 8.8 million barrels a day from last year's 9.6 million barrels, the latest inventory report still shows a steady flow of oil coming into the US from outside sources. Inventories reported a gain of 2.8 million barrels, while gasoline also showed a modest 500 thousand barrels up from the week previous.

         At a critical juncture before the start of the US driving season, the predicted drop in prices is most likely related to a withdrawal of speculators from the July buying contract, where traditionally we start to see a drop in gasoline prices through to the fall.

I'll leave it at that for this week.

Sorry for any inconvenience last week, but it was a great trip to Cuba.

Regards,

George Murphy
Twitter @GeorgeMurphyOil