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Tuesday, April 25, 2017

Price changes for Thursday, April 27, 2017

Hi to all,

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

*Heating and stove oil show a drop of 2.4 cents a litre....
*Diesel shows a drop of 2.8 cents a litre, and...
*Gasoline shows a drop of 2.9 cents a litre from the regulated maximum.

Market highlights

API reports crude and gasoline inventories as "up"
      The American Petroleum Institute, an industry organization, has released its inventory report for the last week, and it's not good if you're a speculator.
      While crude only showed a growth of 900,000 barrels, gasoline showed a surprising build of 4.4 million barrels over the last week.
      If tomorrow's EIA inventory report also shows a build in inventories, it will be a troubling sign that demand may have weakened ahead of the start of the summer driving season
Doubts about OPEC cut extension
      Speculators must be getting nervous...
      While US domestic output continues to show robust growth, OPEC is now asking itself whether the group's output cuts are having the desired effect with oil prices. Doubts that OPEC will maintain their self-imposed output cuts past May month may be signaling the prospect that OPEC may again open the spigots in an attempt to turn down US growth.
      US domestic oil output has increased by close on 850,000 barrels since the last OPEC meeting on cuts at the end of November, well ahead of the pace that the EIA predicted for 2018.

      Stay tuned. This week could be interesting!


George Murphy
Twitter @GeorgeMurphyOil

Wednesday, April 19, 2017

Price changes for Thursday, April 20th, 2017

Hi to all,

Here are expected price changes for this Thursday:

*Heating, stove oil and Diesel are all expected to increase by 3/10ths of a cent a litre, and......
*Gasoline shows a drop of a cent a litre.

   Keep in mind my margin for error of 3/10ths of a cent a litre.

Market highlights

Saudi's say "too soon"
In what some consider to be a major shift in OPEC's thinking, the Saudi Arabian oil minister says it is "too soon" to talk about extending the cuts OPEC and non-OPEC members agreed to back in November.

   The six month agreement to cut production is a good reason why some have seen the price of oil rise to present levels, but it was expected by most that the agreement would be extended for another six months beyond May.
   Stay tuned as OPEC meets again in Vienna May 25th.

Province to cut back on gas taxes

The budget has some good news for consumers who were hoping to see a retreat in gasoline prices.

   Largely unexpected, the provincial government made the decision to lower gas taxes by 8.5 cents a litre (9.8 taxes in) by June 1st, and a further four cents a litre (4.9 taxes in) as of December 1st, while the remainder of the initial increase will be reviewed in the Fall.

   I was initially hoping that the budget would lower gas taxes by five cents a litre, so, this move was surprising, but at the same time, I was pleased to see the retreat in taxes immediately before summer, and well after the upswing in summer gasoline prices.

   It will also serve to put a little more disposable income into the hands of consumers as well as transportation-based small businesses.

Regards for now,

George Murphy
Twitter @GeorgeMurphyOil

Tuesday, April 11, 2017

Price changes for Thursday, April 13, 2017

Good evening to all,

Here's what I have for price changes this week, and the news is not good. It's just about all geo-political.

While I'm at it, I'll throw in this little disclaimer: "While not the actual price change that may occur, the numbers will be indicative of what direction prices will go."

*Heating/stove oils show an increase of 2.2 cents a litre.
*Diesel fuel shows an increase of 2.4 cents a litre, and...
*Gasoline shows an increase of 4.4 cents a litre.

Market highlights

Libya output weighs markets
Libyan production has once again been almost fully shut in after hitting close to 700,000 barrels a day in output just last month.
      News out of Libya indicates that the largest output terminal at the Sharara field has been cut off reducing Libyan output to just 250,000 barrels a day.

Syrian attacks raise tensions
Tensions between the US and Russia after the US strikes in Syria are on the increase, helping to bolster oil prices.

Demand up again
US inventory reports from both the EIA and API (American Petroleum Institute) indicate an increased demand in gasoline, even as refinery capacity picks up to meet summer production.
I'll get a better indication of increased demand from tomorrow's EIA inventory data.

IS US shale able to keep pace?
While OPEC and non-OPEC cuts are beginning to take hold, hitting the oil markets with close to 1.8 million barrels less in the markets, US shale production has only responded with an increase in 700,000 barrels increase in domestic production.
     That leaves a gap of 1.1 million barrels of growth that must give investors a possible "window for investment". That window may also be complicated by slower than expected growth in production as former oil workers may not go back to work at their previous jobs as fast as when they first went into the industry.
     Nothing like a good oil price collapse to bring an industry back to its own reality.

That's it for this week!


George Murphy

Twitter @GeorgeMurphyOil

Tuesday, April 04, 2017

Price changes for Thursday, April 6th, 2017

Hello to everyone,

Here's what I have for this week's price changes. I expect everyone will share this one!

*Heating and stove oils show an increase of 2,7 cent...s a litre.
*Diesel fuel shows an increase of 2.8 cents a litre, and...
*Gasoline shows an increase of 4 cents a litre.

Market highlights

OPEC to extend production cuts agreement
In what some are considering a surprise to the markets, strong rumours are persisting that show OPEC members in agreement on extending their cuts to production for longer than the six months first agreed to in November.
While the cuts may help to bring prices up, there are some worries amongst members that other non-OPEC producers may not extend their end of the deal, and continue to sign on to self-imposed cuts. Non-OPEC producers agreed to carry out almost 600,000 barrels in production cuts, making total cuts to the market almost 1.8 million barrels a day.

Demand for gasoline on the upswing?
Expectations of a extension to production cuts aren't the only item making news with oil this week.
Expectations of a draw-down on inventories of both gasoline and oil are putting some upwards pressure on prices this week as gasoline shows a draw against inventory at the same time as refinery capacity increased this past week by another two percentage points.
Analysts expect the trend to continue with data from the US Energy Information Administration to be released tomorrow.

US rig counts up again...But can US domestic keep pace?
Oil was also buoyed this week as several key storage areas in the Caribbean are said to have dipped in inventories of crude oil, swallowing up some of the surplus along the US Gulf coast and Eastern seaboard.
The question that needs to be answered now is: Can US domestic drilling and oil output keep ahead, or pick up the pace against cuts made by OPEC? Or, do we see a steady, continued rise in oil prices if and when production meets the level of cuts agreed to in November?
The US rig count increased another 15 rigs last week and should keep rising if oil rises in price.

That's it for this week!

Twitter @GeorgeMurphyOil