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Tuesday, August 02, 2016

Price changes for Thursday, August 4, 2016

Hi to all,

Final numbers...

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

*Heating and stove oil predicted to decrease by 3.3 cents a litre.
*Diesel fuel to decrease by 3.2 cents a litre, and...
*Gasoline to drop by 1.6 cents a litre.

Market highlights

Saudi Arabia discounts
Saudi Arabia has started again to discount to it's Asian customers as the selling war against Iran has again escalated. Since Iran's return to the open markets after the lifting of sanctions, I predicted then that it wouldn't take long before Iran starts to pick a fight in an effort to gain back its own lost customers from the first placement of sanctions a few years back.
     Looks like this fight is going to be worth keeping an eye on for its European connection!
     Read on!

Libya back in it
Libyan production is coming back on with the end of violence in four key export centers from the North African nation. Analysts are saying to expect anywhere between 150,000 barrels to 450,000 barrels immediately into the world markets with an increase to 900,000 barrels of oil almost certainly directed at the European and Asian markets.
      Let there be no mistake that, in a few weeks time for exports to reach Europe, and excess supplies will be certain to hit Brent prices more so than West Texas Intermediate. There will be some discounting in Europe to come!

Nigeria back in
With the Nigerian government agreeing to start paying rebels a share of oil royalties (it's not that unusual), expect to see an increase mostly to the US of light sweet crude into the US eastern seaboard. With production showing some resilience in the US in spite of retreating prices, look for the US to build oil inventories that might show a continued glut will carry on in spite of any producers best efforts.
      It was November of last year that it was estimated that the world had in excess of three billion barrels of oil to be consumed before we were free of the oil glut.
      Just a few reasons why we won't see any recovery in prices anytime soon.

That's it for this week!

George Murphy
Twitter @GeorgeMurphyOil

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