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Wednesday, November 02, 2016

Price changes for Thursday, November 3, 2016

Hi 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 per litre.
*Diesel to drop by an even penny, and...
*Gasoline shows a drop of just 6/10ths of a cent.

Market highlights

Another closure of the Columbian pipeline disrupts gasoline output

An explosion and fire has again closed the Colonial pipeline that runs from the US Gulf of Mexico refining and export areas to the US northeast, causing a sharp increase in gasoline spot prices on the New York mercantile exchange today that may not be felt by Newfoundland and Labrador consumers until they hit the pumps next week IF the line isn’t repaired soon.
    Before today, numbers showed a small decrease of a penny a litre, but the fire and explosion that took one life has resulted in a sharp increase in gasoline prices as a result of a “supply disruption”.
    “We’ll see how it goes in the markets over the next couple of days, but prices are already showing close to a four cent a litre increase could happen if today’s closing prices carry through the week”.
      Repairs are estimated to take until Saturday at the earliest to bring the line back into full operation again.

OPEC deal could fall apart?

OPEC’s deal to make a cut to production may already be under threat as Iran and now Iraq, are expressing dissatisfaction with having to institute cuts before they reach maximum “pre-war” production levels.
      That played into the markets this week allowing Brent prices to drop almost $3 US a barrel to close today at $47 and change.
       Speculators are also keeping in mind that the Saudi government is looking at raising cash through the sale of stock in the government owned Saudi Aramco oil company, saying the only reason why the Saudi’s wanted a freeze was to raise the share price and increase the government take.
       In the meantime, OPEC meets again at the end of this month to formally implement the limited production agreement.
       Food for thought...

That’s it for this week!


George Murphy
Twitter @GeorgeMurphyOil

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