Price changes for Thursday, March 30, 2017

Hi to all,

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

*Heating/stove oil shows a drop of 1.2 cents a litre.
*Diesel shows a drop of 1/10th of a cent a litre, and...
*Gasoline shows an increase of 6/10ths of a cent a litre.

Libyan crude production drops
     Crude oil increased the last two days of the pricing session as Libyan crude production dropped almost 250,000 barrels a day because of disagreements between factions over control of two key oilfields.
     The Sharara and Wafa fields were part of the total source of oil that helped Libya pump out close to 750,000 barrels a day. The removal of the two fields drops total output down to a half million barrels a day, almost one million barrels less than the 1.5 million a day before the revolution started.

API data weighs
     Latest data from the American Petroleum Institute's inventory shows another modest build of 1.9 million barrels, while gasoline shows a "less than expected" draw of just 1.1 million barrels.
     While the EIA data is the chief number I watch, the data on gasoline is showing me that demand remains weak for gasoline.
     Chief number to watch tomorrow will be the refiner capacity number, which should give a better read on any growth in demand, as well as any detected growth in overall US domestic output.

Still watching the numbers!

Regards,

George
Twitter @GeorgeMurphyOil

Price changes for Thursday, March 23, 2017

Hi to all,

Short and sweet, here's what I have for this week's price changes:

*Heating & stove oils show a drop of 4/10ths of a cent a litre.

*Diesel fuel shows a drop of 7/10ths of a cent a litre, and...

*Gasoline shows no change in price this week.

Market highlights

API report shows another inventory gain

     While not my source of inventory news that influences my way of thinking, new numbers from the American Petroleum Institute shows another increase in crude oil supply, this time by 4.5 million barrels a day

     Gasoline showed a drop in inventories of 4.9 million barrels, while distillate supplies dropped just over 800 thousand barrels.

Canadian dollar steady

     Up to three days ago, the dollar remained steady against the US greenback, but gained almost a penny against its US cousin in the latter half of the week.

     Oil, in the meantime, lost a dollar US this past pricing session.

     Brent was priced at $40.67 a barrel March 21st last year.

Upcoming provincial budget

     With oil prices close to $51 US a barrel Brent right now, it is obvious that the government will show some added revenue from oil royalties.

     It may be wishful thinking, but it may be time for the government to roll back the heavy increase that was levied onto gas taxes, if only just in part. While government may have thought it "prudent" to increase taxes, it became heavy-handed to levy an added 16.5 cents in added gasoline tax.

     Additional taxes resulted in an increased take as well from HST with the result being a twenty cent a litre hit at the pumps.

     We all could use the break!

That's it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, March 16, 2017

Hi to all,

Here’s what I have for this week’s price changes, baring in mind that winter blending mat throw off the distillate numbers slightly from the actual that may occur.

*Heating and stove oils show a drop of 3.1 cents a litre.

*Diesel shows a drop of 3 cents a litre, and...

*Gasoline shows a drop of just 2/10ths of a cent a litre.

Market highlights

Focus off distillate turning to gasoline

     If you were a speculator in the distillate market, you didn’t make a pile of money, but you didn’t really lose either. Both ways you look at it, prices were moderate, even to some consumers.

     But it’s time to pull out now, and as you do, you turn to the gasoline markets where, hopefully, you’ll see a rise in demand as spring and early summer comes on.

     So, while consumers should start to see some expected drops in distillate prices here into the summer, those same consumers begin to see some support for gasoline: just part of the reason why no big drop in the gasoline markets this week.

     But don’t expect too much pressure yet, mind you!

     Until consumers see an uptick in demand, expect no immediate growth in gasoline prices this summer. With near-record inventories of gasoline out there this spring ahead of the switch-over from distillate to gasoline, there’s going to be reason for concern for refiners and Big Oil when refineries begin turning out more gasoline for consumption.

     What’s bad for them though, is not necessarily a bad thing for consumers...

OPEC blinks

     OPEC member Saudi Arabia reported today that they secretly increased production upwards from January adding another 260,000 barrels a day to production.

     The Saudi’s produced 10.1 million barrels a day, from 9.8 million barrels a day in January.

     Now, if I were a betting man, I’d put my money on one simple reason: That U.S shale has become a bigger influence on OPEC oil policy than anyone realised. My guess is that, adding a little oil to the markets is an attempt to “taper off” US growth in domestic oil and still allow them to survive.

     It’s a “warning”...

     What OPEC does in the next two months will be determined by what U.S domestic in the next two weeks with domestic production figures when they are released by the US Energy Information Administration.

     That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, March 9, 2017

Hi to all,

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

*Heating and stove oil to drop by 6/10ths of a cent a litre.

*Diesel fuel to drop by 7/10ths of a cent, and...

*Gasoline to drop by 1.6 cents a litre.

Market highlights

API reports another huge crude inventory build

The American Petroleum Institute recorded yet another huge inventory build, with crude oil stocks growing another 11.6 million barrels to the domestic stockpile.

     Gasoline inventories were reported down in excess of five million barrels, while distillate stocks were also down by 2.9 million barrels.

      All eyes will be on the US Energy Information Administration’s report due to be released around noon Newfoundland time.

OPEC meeting in May

While it’s a long way away yet, it could be the key date that signifies whether OPEC’s member states will carry forth with production cuts, or whether they will answer to the massive growth in U.S domestic production. The US Energy Information Administration is already predicting that US domestic will hit 9.7 million by the end of fiscal 2018. The US has already added half of the total cuts made by OPEC since the end of November and could set itself up to meeting the 1.2 million gain in domestic production within the next four months if oil stays close to $55 US a barrel.

     Question to be answered in May then? Will US domestic production spark OPEC members into opening the floodgates to knock US production again, or does OPEC answer with more cuts?

      For now, it’s “wait and see”.

     That’s it from me this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil