Price changes for Thursday, February 2, 2017

Good evening to all,

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

*Heating and stove oils show a drop of 1.1 cents a litre.

*Diesel shows a drop of 9/10ths of a cent a litre, and...

*Gasoline shows a drop of 2.4 cents a litre.

Market highlights

US/Canadian oil continues to rebound

     As I predicted would happen some months back, the US oil industry continues to rebound to fill the gap left wide open by OPEC and non-OPEC production cuts.

     Again this week, US rigs have continued their return to the field with the addition of another 15 rigs back into production and exploration.

     Sources in Alberta also continue to show a good rebound starting within the oil industry there, especially moreso with the stability that oil has shown in recent weeks.

Inventories continue up for oil and gasoline

     Last week’s inventory report from the Energy Information Administration continues to show good builds in gasoline inventories, one of the chief reasons why gasoline prices will see their fourth drop in a row since their peak during Christmas/New Year’s travel demand.

     With refiner capacity again showing retreat, Gasoline inventories climbed by another 6.8 million barrels. That figure is pretty important when you consider the fact that refiners were throttling back on production.

That’s it for this week.

Regards to all.

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, January 26, 2017

Hi folks!

Better later than never, but here's what I have for this Thursday's price changes. Keep in mind that winter blending will throw off the Diesel and heating/stove oil numbers somewhat:

*Heating/stove oils show a drop of 4/10ths of a cent a litre....
*Diesel shows a drop of a cent a litre, and...
*Gasoline shows a drop of 1.8 cents a litre.

Market highlights

US inventories increase
      Last week's inventory read from the US Energy Information Administration saw a 2.3 million barrel increase in crude oil, but the real news to hit the markets was written in the gasoline inventory numbers.
      Gasoline inventories reported a growth of six million barrels last week, much higher than expected, but not a real surprise as it comes at the end of the Christmas travel season.
      What was evident in the report was a noticeable drop in the refiner capacity numbers which saw a three percentage point drop to just shy of 91 percent.
      While refineries throttled back, gasoline increased in inventory.
      The markets immediately responded with a drop that stayed relatively steady through the week to what we have for Thursday.

US rig count shows a sharp increase
      The weekly US drill rig count showed a huge increase last week that proves a lot of smaller producers are getting back in the game.
      The US rig count showed its' largest weekly increase since April, 2013 with the rig count jumping by 26 additional rigs in the field.
      Look for Western Canada to start getting busy again as production costs are slightly lower due to the dollar difference with the U.S.

      I'll leave it at that for this week!

Regards,

George Murphy
Twitter @GeorgeMurphyOil

Price changes for Thursday, January 19, 2017

Hi to all,

Here's what I have for this week's price changes. Keep in mind my margin for error of 3/10ths of a cent when you look at that heating/stove number!

*Heating and stove oil shows an added 2/10ths of a cent a litre.
*Diesel fuel shows a drop of a penny a litre, and...
*Gasoline shows a drop of 1.1 cents a litre.

Highlights

Majors moving to land
      In what is probably a sign of the times, large oil companies are beginning to make a move to shore where lower expenses to get into the oil game show more promise.
      A good example of this is a new acquisition of drilling rights by Exxon/Mobil who, with a few billion dollars more, have made a major expansion into the Permian basin in New Mexico.
Estimates are already in showing an estimated 3.4 billion barrels of reserves in the acquired property.

International Energy Agency and a possible flood of oil
       It took them long enough...
      The International Energy Agency is looking at a huge increase in US oil exports to begin just in the next few months that could be the spark to start another oil war for market share with OPEC.
      Because oil prices have hit a level where some profits can be made, the IEA is predicting that US domestic production will be quick in to fill the gap left by OPEC production cuts.

    Look for oil prices to stay "loopy" for the next little while in what could be the lead-up to another price war!

That's it for this week!

Regards,

George
Twitter @GeorgeMurphyOil

Price changes for Thursday, January 12, 2017

Hi to all,

Here’s what I have for this week’s price changes, keeping in mind winter blending which may throw off the distillate numbers somewhat.

*Heating and stove oils show a drop of two cents a litre.

*Diesel fuel shows a drop of 2.7 cents a litre, and...

*Gasoline shows a drop of 3.2 cents a litre.

Media release

Conception Bay South, NL, January 10,2017- “It may be the start of a decline in prices that, if market sentiment sticks around, could lead to steeper drops in price in the next few weeks.“ That’s according to George Murphy, group researcher for the Consumer Group for Fair Gas Prices.

“Speculators for the last six weeks have played up oil prices with the fact that OPEC has stepped in and made substantial cuts to production, but the fact that they left a gaping hole for other producers to step into, may very well be coming back to bite them. As predicted would happen, smaller US domestic producers seem to be coming back into the market, and that is beginning to show in the U.S rig count and worldwide.

“It’s not just from the U.S that I am seeing a quick return to the markets. Worldwide, the rotary rig count increased last week by another 94 rigs, sparked by restarts in Canada and other centres where shale resources were previously being explored. World-wide, that amounts to 1772 rigs operating, with last week’s return of 94 rigs, the highest increase week-on-week that I have seen.

“Doubts about the ability of oil to maintain present pricing levels are permeating the markets, at least for the time-being, and that’s the basis for some relief for consumers this week. OPEC member compliance is also an important factor with both Libya and Iraq exports beginning to climb.

“The Canadian dollar also is a factor this week, rising in value against the U.S greenback in the face of falling oil-at least for the time-being. The Canuck Buck has gained almost three cents in the last two weeks as a result of a mostly positive Canadian jobs report last week. A rising Canadian dollar against the U.S greenback has the tendency to drop prices further.”

                                                                                                        -30-

For more information, contact:

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, January 5, 2017

Hi to all,

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

*Heating and stove oils show an added 1.4 cents a litre up.

*Diesel shows an added penny upwards, and...
*Gasoline shows an added 1.2 cents a litre at the pumps.

Highlights

US EIA inventory data still shows demand for gasoline

     US Energy Information data still showed demand for gasoline to remain up in the lead-up to the Christmas travel season, but this week began to taper somewhat. It may be as simple as investors not seeing demand continue in the weeks after the holidays and that may be the beginning of what hopefully will be a retreat in prices. Any building of inventories during winter on gasoline may be enough to lower prices in the coming weeks.

     The US EIA reported a drop of 1.6 million barrels. Inventories remain a rough 5 million barrels over the same timeframe last year.

Local word

     With snow-clearing becoming a prevalent issue on people’s minds, it remains a wonder why government has not taken some of the new gas tax money and re-invested back into 24 hour snow-clearing.

     Last year, government collected $193.98 million in gasoline taxes and it’s own estimates predict $312 million will be collected with the doubling down of the gas tax in year one.

     Government also said they would save a mere $1.9 million in getting rid of 24 hour snow-clearing.

     “As a matter of public safety first and foremost, why can’t government take the $1.9 million from the new gas tax money and retain proper snow-clearing for the people of the province? It’s obvious right now that their new program is not working, plain and simple”. That’s according to George Murphy, group researcher for the Consumer Group for Fair Gas Prices.

      “Government must understand also that our highways are part of how we carry out commerce in this province, and if they aren’t useable, then we don’t generate needed revenue for business, and also for government.

       Basic services suffer.

        Not cleaning roads may in fact cost government more than just savings. It could cost jobs, let alone lives!”

Letter to the Public Utilities Board: Transportation study needed for Labrador market

     I will be writing the Public Utilities Board in the next couple of days to ask that the Board review transportation costs of fuel, particularly to coastal Labrador.

     The reason is simple really...

     Before Christmas we all saw that Coastal Shipping, a branch of the Woodward Group lay off a hundred Newfoundland and Labrador personnel in favour of cheaper labour aboard five of their ships.

    “If labour is a major cost to them of doing business that has been claimed as an allowable expense in the transport of fuels and mark-ups to consumers as a result, then prices for the transport of fuels to Newfoundland ports of call, but  particularly to coastal Labrador must come down as a result of paying out lower wages. Just because you fly a ‘flag of convenience’ does not mean consumers should pay. If tanker costs are coming down for the company, fuel costs have to come down for the consumer.”

That’s it for this first year’s edition!

Regards,

George Murphy

Twitter @GeorgeMurphyOil