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Monday, July 03, 2017

Price changes for Thursday, July 6, 2017

Hi to all,

Here’s what I have for this Thursday’s price changes, and all a little early as a result of markets being closed tomorrow as a result of the U.S Independence Day holiday:

*Heating and stove oil show an increase of 2.7 cents a litre.
*Diesel fuel shows an added 3.1 cents a litre, and...
*Gasoline shows an added 2.7 cents a litre at the pumps.

Consumers to see an increase at the pumps for the first time in weeks

The numbers are in early as a result of the US markets being closed tomorrow as a result of the U.S Independence Day holiday, but even the holiday south of the border isn’t going to go the trend of the last few weeks with price drops.

On the contrary...

“It’s almost strange to see it after the last couple of weeks drops at the pumps, but consumers will see an increase at the pumps this week as gasoline demand starts to match refinery output”. That news from George Murphy, group researcher for the Consumer Group for Fair Gas Prices. “Last week saw a very slight draw on gasoline inventories immediately ahead of the U.S holiday, and along with rising oil, refined commodity prices also increased.”

“There are signs of support for oil prices out there as both the U.S rig count was down for the first time in twenty four weeks, and signs from the U.S Energy Information Administration that domestic output last week dropped 100,000 barrels a day, a sharp drop that comes as a sign that small producers in the shale fields may be more susceptible to lower prices than what was first thought. This may have led to ‘second thoughts’ to further investment in these projects, and that’s where we started to see a contraction in oil output. Some speculators placed a ‘break even’ point at $35 U.S, but investors started pulling out well before $45 US, showing a weak bottom remains for shale resources and that the ‘break even ‘ point is much higher. Long term projects have a distinct advantage against smaller projects.

“In spite of the news from OPEC member Libya of rising production and exports from the war-torn country’s return to the markets, oil prices still saw some support as a result of smaller shale simply not going to be able to attract the investment because of high risk and low oil prices. It seems that OPEC cuts may read in the markets again until oil rises to the point where small shale production can attract investment again. The market pendulum has again swung in favour of OPEC and other non-OPEC producers in it for the long term.

“On average, Brent and WTI have increased the past week by $3 US a barrel with refined commodities showing strength based on the increase to oil prices. It was only ‘natural’ to see gasoline demand start to rise before the holiday in the U.S and we can only hope that we can see the trend of low prices return for the rest of the summer”.


For more information, contact:

George Murphy
Twitter @GeorgeMurphyOil

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