Hi to all,
Here’s what I have for this week’s price changes. Keep in mind that heating oil as well as Diesel numbers may be off slightly due to winter blending.
*Heating and stove oils show a drop of 3/10ths of a cent a litre.
*Diesel shows an increase of 2/10ths of a cent a litre, and...
*Gasoline shows an increase of 1.6 cents a litre.
API reports another huge inventory build
While some may have been expecting a drop in gasoline and oil prices this week, it was left to the imagination as to why prices didn’t fall with a huge inventory build last week.
However, the American Petroleum Institute is again reporting a huge build in inventories ahead of the US Energy Information Administration’s report due tomorrow at noon, this time by 9.98 million barrels.
Last week, in digging down through the evidence, it was found that while there was indeed an inventory build, it was mainly caused by the movement of oil in storage in the Houston shipping channel with that oil coming ashore, as well as a build in imports in the US northeast that caused the issues.
Sad to say, I fear the markets are running out of excuses for the inevitable fall in oil that will occur with such inventories building as they are. Oil right now is on borrowed time, artificially held up with market excuses like “ a perceived” increase in demand.
Demand may seem to be up when we see a draw-down in inventories of gasoline, but it’s a hard fact to stick by when you see capacity dropping at such a rate that itself affects inventories. Gasoline inventories from the industry-led group are also up. What will be the excuse next week?
It’s kind of like buying a used car and not having the down payment. You don’t’ have to have a cent in your pockets, but the papers can be worked so you have it on paper to make the purchase. You still know you’re going to have to pay for it in the end.
The oil markets may have to get ready for the shock.
US rig count up yet again
While US domestic production creeps closer to nine million barrels a day, the US rig count is up yet again this week according to Baker-Hughes, this time up by another 12 rigs.
US domestic oil production should hit the “magical”9 million barrel a day mark either later this week, or next week, that should have OPEC taking a keener eye as they lose a little more market share from US exports.
That’s it for this week!