Hi to all,
Here’s what I have for this Thursday’s price changes. Keep in mind that the gasoline price also includes performance of the product on the markets that compiles the overall number.
*Heating and stove oils show a drop of 1.4 cents a litre.
*Diesel fuel shows a slight drop of 6/10ths of a cent a litre, and...
*Gasoline shows a drop of 10.4 cents a litre at the pumps.
In spite of summer, the markets are still skittish
While OPEC may have been successful in its mission to extend production cuts to help elevate prices, markets are not all that excited about it, even as the U.S summer driving season has arrived. With not so much as a whimper as a collective sigh, markets are still seeing some holes in the deal the OPEC and non-OPEC members signed a mere five days ago.
With the agreement was signed, two OPEC nations, recovering from their own internal struggles, were left out of the agreement to reign in their production. That in itself has allowed the possibility of a direct increase in overall OPEC output from present levels. With Libyan production set to climb to 1.5 million barrels a day from 250,000 at present, the difference alone from Libya may be enough to stymy any support for OPEC’s cause of supporting prices.
Also set this week was a chance for Nigerian production to possibly return from its recent lows, allowing it to not be subject to cuts as well. That leaves the possibility of Nigeria, now exempt from the agreement, to return to close on 2.6 million barrels a day of production.
Analysts simply can’t see the way out for OPEC as U.S domestic production continues to climb to “pre-collapse” conditions.
What may help support oil may come as a surprise for some, but it’s a relatively simple guess: While U.S domestic production has been increasing, it has slowed a little, possibly caused by hiring issues in the fields. An industry collapse two years ago that put so many out of work may also be a deterrent for some to return to an industry that is essentially still in a very volatile mood. That may give OPEC oil prices some support in the weeks to come, and I’m watching for that.
Gas taxes drop this Thursday
The Newfoundland and Labrador government, as stated in the last provincial budget, is set to drop gasoline taxes downwards by 8.5 cents a litre (9.8 cents taxes in) Thursday morning when prices will be adjusted by the Public Utilities Board’s Petroleum Pricing office.
The increase to gasoline taxes saw the government increase road taxes from 16.5 cents a litre to 33 cents per litre in the 2016 budget.
While I am thankful that the retreat in gas taxes has started, I am also looking forward to getting back to an even playing field between all the Atlantic Canada provinces as soon as next year’s budget.
At least we’ll enjoy the break at the pumps for the next few weeks.
That’s it for this week!