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Tuesday, November 15, 2016

Price changes for Thursday, November 17, 2016

Hi to all,
Here are the final numbers for this week's price changes:

*Heating and stove oil to drop by 9/10ths of a cent a litre....
*Diesel fuel to drop by 1.1 cents a litre, and...
*Gasoline to drop by 4.3 cents a litre.

Market highlights

OPEC swings the market

There's no doubt that while OPEC is losing some market influence, there's no doubt who carries the influence within the group itself.
     After a wild downward swing in oil yesterday, Saudi Arabia warned its fellow OPEC members that if they all didn't comply with a scheduled cut in production, it would again flood the markets with cheap oil by opening their own spigots, raising their own production levels to hit over eleven million barrels a day.
     With that threat, OPEC members are believed to be starting to fall in line with the idea of cuts to production and then the speculators moved in, pumping up oil prices today by over $2 US a barrel.
     Refined product prices also responded, moving upwards at the end of the day, but still not enough to stop predicted decreases to consumer prices here in Newfoundland and Labrador.
     Meetings between technical staff from member OPEC nations moved up their November 25th meetings to November 21st in response to the Saudi threat. That's nine days out from OPEC's regular meeting on cuts due to happen November 30th.

US domestic production continues to rise
For the fifth week in a row, US domestic production has increased again, this time by another 240,000 barrels a day in response to rising prices.
     Latest data seems to confirm that the shale industry has indeed started to get some measure of control over costs and have responded to the sensitivities of prices around $45 US in order to break even.
     Also to note here is what appears to me to be a sharp increase in a very short time. If OPEC cuts, look to the shale industry south of the border to respond in short order as well.

I'll leave it at that for this week...

Regards and pass the word on the numbers!

George Murphy
Twitter @GeorgeMurphyOil

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