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Tuesday, December 18, 2018

Price changes for Thursday, December 20th, 2018


Hi to all,



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

Keep in mind winter blending as that mix may throw off the distillate numbers somewhat, and also that there is EXTREME volatility in the numbers that could be pointing the numbers lower than what I have here now.



*Heating and stove oils show a drop of 8/10ths of a cent a litre.

*Diesel fuel shows a drop of 9/10ths of a cent, and...

*Gasoline shows a drop of 1.3 cents a litre.



Market highlights



OPEC cuts ineffective?

Talks of a slowing world economy not only sent the stock markets into a volatile condition the last few days, but oil is also starting to pay the price on a possible slowdown.

     With less demand for oil in a slowing economy, the prospects of absorbing a glut worldwide is becoming doubtful. Growing shale production in the U.S has seeded doubts that oil prices will have support as more oil is seen to be added to the markets. The last two days have seen oil retreat  with even refined prices starting to trade much lower right along with it, possibly to reflected at the pumps over the next two weeks.

      The likelihood of cuts being effective is also being outweighed by word from Russia that oil production has increased there, even with the word that the country was keen to join OPEC in making their last round of cuts to oil production.



API inventories up

The American Petroleum Institute also released their inventory data late this evening that also showed a moderate build of 3.5 million barrels in overall U.S crude inventories, along with building inventories in Cushing, Oklahoma where West Texas Intermediate is traded. Oil was up there by just over a million.

      Inventories of gasoline were also said to be up just over 1.7 million barrels nationwide.

      All eyes will be on the Energy Information Administration inventory report due shortly after 12:30PM NST for further word on oil inventory, as well as any growth in U.S domestic production figures.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil

Tuesday, December 11, 2018

Price changes for Thursday, December 13th, 2018


Hi to all,



Here’s what I have for price changes for this Thursday.

ALL DATA IS IN, SO THERE WON’T BE A NEED FOR A WEDNESDAY UPDATE.



*Heating and stove oils show an increase of 1.2 cents a litre.

*Diesel fuel shows an increase of 1.6 cents a litre, and...

*Gasoline shows an increase by an even penny.



Market highlights



OPEC+ (Plus) institutes production cut

Both OPEC and non-OPEC members, otherwise known as OPEC+ have agreed as of Friday past, to institute a round of production cuts that amounts to a little over a million barrels a day with OPEC absorbing about 800,000 barrels of that.

     The agreement between the two groups is for six months and totals close to 1.2 million barrels.

     Exempt from making any cuts are Venezuela, Iran and Libya who are all under production pressures, but Iran having been placed under sanction by the U.S and other counties.



Canadian dollar loses ground

The Canadian dollar lost more ground against the US dollar over the last week losing about two cents against it’s southern counterpart.

      Weakness in resource prices like oil is mostly to blame, but a busy U.S economy also figures into the equation.



Expect market instability

Markets will be shaky the next few weeks and months as markets weigh evidence that the cuts will have some sort of positive impacts on prices, but there are a couple of other factors worth watching.

     A worldwide economic slowdown is seen as being on its way as stock markets have shown. Lower than estimated returns have spurred the thought that there has been some downturn in demand and that has been reinforced with OPEC making cuts to what some believe as an “over-supplied” oil market.

     A tit-for-tat spat between the US and China continues, even though a 90 day truce was agreed upon early on Saturday as both countries try to find a solution to their trade issues. Tariffs placed on Chinese goods were enough to bare watching as a slowdown in the Chinese economy is said to be starting. However, late news this evening includes a telltale sign that China may not be hurting as much as first thought as imports of oil in November hit ten million barrels a day for the first time ever.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil

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709.685.6186 cellular

Tuesday, December 04, 2018

Price changes for Thursday, December 6th, 2018


Hi to all,



Here’s what I have for this week’s price changes. Keep in mind that the distillate fuels are subject to winter blending, so they may be off slightly.



*Heating and stove oils to drop by 2.4 cents a litre.

*Diesel fuel to drop by 2.5 cents a litre, and...

*Gasoline to drop by 8/10ths of a cent a litre.



These numbers will be adjusted again via social media Wednesday morning when the last data-point becomes available.



Market highlights



Alberta and OPEC both to cut production

In what some may think to be an unusual move, Alberta will do as OPEC countries have long been doing to support prices from time to time. For the first time I can think of, Alberta will cut back oil production by 325,000 barrels a day in order to try and support prices for their land-locked oil resources.

     By limiting production by 8.5 percent, the Notley government is hoping that the price for Alberta crude oils will rise, thus increasing their revenue take and helping to keep Alberta fields working.

     Meanwhile, in the Middle East, and after the G20 meetings in Argentina, both Saudi Arabia, other OPEC members and Russia are talking about an initial production cut of 1.3 million barrels a day. But latest talk out of the Middle East is signaling that cut may be reduced to a million barrels a day as Alberta has taken over 325,000 thus making OPEC think twice about cuts that were to be brought in.

      We’ll find out later this week exactly how much OPEC will cut production by later this week when OPEC meets again in Vienna.

    

US-China trade war ceasefire

The US and China have signaled their intent to call a 90 day ceasefire in their trade war in an attempt to reach an agreement on the imposition of tariffs on goods manufactured in China.

      The Chinese were countering the tariff call by the US with a call for a twenty five percent tariff on imports of U.S crude. While oil increased in price just a little, it has since flattened out on doubts an agreement could be reached.

      Concerns over oil prices arose with the possibility of Chinese economic troubles had tariffs been placed on Chinese goods and oil fell appreciably as a result. Mind you, Trump has said that placing major tariffs on China remained a possibility if the US doesn’t achieve what it believes to be a fair deal on trade and



Global economic slowdown on the way?

Concerns over a global economic slowdown continues to weigh against oil again today as some companies continue to report lower than expected earnings.

      The issues of lower earnings seem to rise every few days in the markets and that weighs against oil as demand is seen to possibly slip with any worldwide slowdown.



Crude averages for this year so far

Merrill Lynch is reporting that the average price for Brent so far this year is $72.80 a barrel, while West Texas Intermediate coming in at $66.10 a barrel US.

      Brent has averaged $72.86 a barrel between April 1st and the end of October according to my numbers.

      Pretty close!

      The province has said it thinks Brent will average $74 US a barrel for this fiscal year.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil

Tuesday, November 27, 2018

Trump taking credit for lower oil? You're kidding, right? Price changes for Thursday, November 29th, 2018


Hi to all,



Here’s what I have for this Thursday’s price changes. Keep in mind that these numbers will be updated to contain Tuesday data in the final numbers. Also, distillate fuels like heating, stove oil and Diesel may be off slightly due to winter blending.



*Heating and stove oils show a drop of 5.2 cents a litre.

*Diesel fuel shows a drop of six cents a litre, and...

*Gasoline shows a drop of 3.2 cents a litre.



Market highlights



Trump tries to take credit for lower prices

     Donald Trump is trying to take credit for lower prices, but the reality of his words may come back to haunt him.

     Why?

     Well, the lower that oil prices go south of the border, the more likely he is to damage the growth in U.S domestic production!

      For some time now, growth in the shale fields was based simply on more money earned for a higher oil price, so lots of junior producers and some majors went back to the drilling fields and domestic production blossomed right along with it.

      But now that oil prices are slipping, the prospect of better profit margins is slipping away. Some may be taking that sober second thought about entering the energy field while such insecurity reigns. And the Saudi’s and OPEC may be quick to lash out.

      Will he be so quick to take credit if the markets collapse again?



Saudi Arabia and OPEC worried?

       While oil prices have been slipping, the prospect of lower revenues to Middle Eastern exporters again is coming into focus with most of that pointing directly at Saudi Arabia, who have to be worried that unrest again will bring unease within its borders as happened in 2014.

      The last time prices collapsed, the Kingdom was left with much lower revenues and was forced to cut back on some major programming, and faced a larger than usual problem of keeping everyone happy who had been drawing from the kingdom’s riches.

       If the Saudi’s and OPEC, in concert with Russia, decide to cut production, it could have the reverse effect and open the markets to the whims of growing U.S domestic production, thus complicating their end desired result.

       If they maintain present levels, the markets may see it as over-production and that would likely send oil lower causing grief within its borders.



Demand lower?

      Trump’s tariff war against China is helping to send oil prices lower.

      As the prospect of an economic slowdown as a result of tariffs on goods from China into the U.S grows, the promise of lower oil use in China, the world’s second largest consumer, is also weighing on the markets.

      In the meantime, U.S inventories reported a build in crude oil inventory in spite of an increase in refiner capacity.

      Distillate inventories were also down, but less than expected and gasoline inventories reported a drop of just shy of 1.3 million barrels.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil   

Tuesday, November 20, 2018

Price changes for Thursday, November 20, 2018


Hi to all,



Here’s what I have for price changes for this week. Keep in mind that these numbers will be updated by 10:00AM tomorrow.



*Heating and stove oils show a drop of 2.4 cents a litre.

*Diesel fuel shows a drop of 2.5 cents a litre, and...

*Gasoline shows a drop of 2.2 cents a litre.



Market highlights



OPEC meets in December

OPEC will meet the first week of December to discuss measures to help support the price of oil from falling further.

     Those measures may include a more extensive cut by a million barrels a day by OPEC members to help support prices. Saudi Arabia, just two weeks ago, stepped into the falling price issue and announced they would curtail exports by 500,000 barrels a day, a move that wasn’t seen by market analysts as being enough to help.



Oil falls further on earnings and economic reports

Oil prices fell almost seven percentage points again today as lower than expected earnings reports signalled a world economic slowdown was in the works.

     Any economic slowdown also sees demand for crude oil drop along with it, part reason why the panic sell-off was on again in the markets today.



Oil inventories up

Oil prices weren’t helped any this past week as inventories were up, according to the Energy Information Administration’s inventory report.

      Inventories of crude oil were up again, this time by 10.3 million barrels against an expectation of 2.2 million barrels.

      Gasoline inventories were down by 1.4 million barrels, while distillate inventories dipped by 3.6 million barrels.

      Refiner capacity was measured at 90.1 percent as refineries were mostly down for winter switchovers and maintenance. This was not seen as an issue with prices as, when capacity picks up, inventories of refined products would be in better shape than what was shown this past week.

     The next inventory report is due Wednesday from the EIA.



     That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil

Tuesday, November 13, 2018

Price changes for Thursday, November 15th, 2018


Hi to all,



Here’s what I have for this week’s price changes based on SIX days data. These numbers will be updated again via social media and Twitter sometime tomorrow morning when I have the seventh day. I expect these numbers to be more of a drop than what I have here.



Here’s what I have so far:



*Heating/stove oil and Diesel fuel all show a drop of 1.2 cents a litre.

*Gasoline shows a drop of 2.8 cents a litre.



Market highlights



Saudi Arabia to reduce exports

Saudi Arabia didn’t come right out and say it on production cuts, but they did announce a 500,000 barrel a day reduction in exports.

     There is a difference...

      Now OPEC officials will discuss a possible cut in production of upwards of a million barrels a day starting in 2019 to offset what some are considering as an over-supply issue.

      Latest OPEC production figures show the group producing 155,000 barrels more in October month that helped offset Iranian cuts to exports by close on 50,000 barrels a month, signaling that Iran’s shortfall can be more than fulfilled in the oil markets.



Canadian dollar gets pounded

As oil sinks a little lower, the Canadian dollar has lost more ground to a strengthening U.S greenback, losing close on two cents in the last week.

      For every penny lost, consumers lose about 8/10ths of a cent at the pumps as a result making a drop at the pumps a little less than what it should be had the currencies been at par.



Lower oil could exacerbate oil availability down the road

While oil prices sink lower, the prospects of supply to the markets starts to come into question as revenues fall off.

      Venezuelan production had already dropped off to 1.2 million barrels a day from over two million a few years back, and is widely expected to drop below a million a day as economic and political woes weigh on the South American country. If oil slips further, problems with keeping wells producing start to show and wells begin to shut down, so much so that markets may face a shortfall in the long term

       The problem already happened between 2014 as oil prices sank amidst world over-supply, and prices only began a recovery as soon as the over-supply was drawn down. Between a possible OPEC cuts in 2019, faultering production in Venezuela and a possible slowing of U.S domestic growth as a result of lower prices, oil itself may not be on such a slippery slope as some may think.



That’s it for this week!



Regards,



George Murphy

Twitter: @GeorgeMurphyOil

Tuesday, November 06, 2018

Price changes for Thursday, November 8th, 2018


Hi to all,



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



*Heating and stove oils to drop by 3 cents a litre. (3.5 cents)

*Diesel fuel to drop by 3.1 cents a litre (3.3 cents), and...

*Gasoline to drop by 3.8 cents a litre (3.6 cents).



            This is the last week where I will have seven day data ahead of price changes to be put out every Tuesday evening.

            This is the dataset that cost a pricey $635 US a month, the cheapest that I have found. Mind you, they have since offered to discount it 25%. Still pricey!



            Instead, as the second set of data I found is free, I will publish data based on six days data to be published on a Tuesday with a reconciliation for seven days of data later by noon Wednesday via Twitter and Facebook.

           Data basically comes a day later than what I have previously had.

           This week’s price changes shows how close the data can be based on seven days data with six day data in parentheses ().

            Where there are days that we have a “Monday” holiday, it may go on a five-day report with a follow-up based on six days.



             It’s probably the best I can do at this point, but I do hope it works out for those who avail of the information.



             We’ll know more on the accuracy in the next two weeks or so as I can compare price change data with that which will be the actual change that occurs.



Regards, and thanks for your patience!



George Murphy

Twitter @GeorgeMurphyOil

Tuesday, October 16, 2018

Price changes for Thursday, October 18, 2018


Hi to all,



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



*Heating, stove oil and Diesel all show down by two cents a litre.

*Gasoline shows a drop of five cents a litre.



*Keep in mind that winter blending may throw off the distillate numbers somewhat.



Market highlights



Saudi’s and Russians sign on to up production

When I said a couple of weeks ago that there was soft support for oil at $85 US a barrel, the news that the Saudi’s and Russians had entered into an extended production agreement confirmed it.

     With both countries in an “unofficial, secret” agreement to add production that was agreed to in September, traders saw it as a move that would only add to widening speculation of building supply worldwide, and all in spite of dropping production from Venezuela and coming sanctions against Iran.



Saudi threat over Khasoggi incident proves empty

Blogger and journalist Jamal Khasoggi remains on the missing list and Trump is appearing to back away as the Saudi’s also back down from a threat to cut it’s own production.

     Both sides now appear to use any excuse to downplay the fact that a man has gone missing in the interests of diffusing an explosive situation. A cut in production would have raised prices, but it had the potential to cause an increase in internal Saudi unrest and economic damage to the U.S, who seem to have toned down their rhetoric on Khasoggi.

     Market traders continued to send oil downwards in spite of the “threat”.



U.S crude inventories increase

The latest U.S crude inventory report last week showed a build of six million barrels, while gasoline also increased by one million.

     Distillate inventories were down by 2.7 million barrels on 88.8 percent refiner capacity, a sign that U.S refiners were heading into maintenance mode.

     With capacity down, gasoline also started to drop as demand was seen to be lower with the inventory build.



That’s it for this week!



Regards,



George Murphy

Twitter GeorgeMurphyOil

Tuesday, October 09, 2018

Price changes for Thursday, October 11th, 2018


Hi to all,



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



*Heating and stove oils to increase by 1.8 cents a litre.

*Diesel fuel to increase by 1.9 cents a litre, and...

*Gasoline to increase by 3/10ths of a cent a litre.

**Winter blending is now in effect, so distillate prices may be off slightly from the actual that will occur until springtime!



Market highlights



Irving refinery outage a warning

Consumers were given a scare this week when the Irving refinery in New Brunswick was faced with a shutdown due to an explosion and fire that caused minor injuries, but thankfully, no loss of life.

     The fact that the refinery was already in a partial shutdown mode for routine maintenance also alleviated some fears over any shortage that could have resulted in the markets of Atlantic Canada and the U.S northeast. However, there may be some possible issues if the refinery has to close for any extended period of time in the event of extensive repairs.

      The closure of the refinery that supplies most of the Maritimes and the U.S northeast also serves as a warning on what could happen if reciprocal sales arrangements that lead to the future closure of any more refineries is allowed to occur.

      The same could be said for the need for another refinery to service the region of Atlantic Canada to protect consumers and industry from any further cuts of supply. Certainly if our energy security is to be held at risk of such a possibility.



Sanction day: November 4th

Sanctions are due to kick in fully against Iran three weeks from now as pressure mounts on other countries to curtail imports of Iranian crude. The policy of sanctions by the U.S on the OPEC oil exporting country seems to be working as CNBC is reporting that exports during the first week of September have dropped again to less than 1.1 million barrels a day.

       Venezuela has also experienced a further drop in production as its economy faces almost total collapse and inflation runs amuck.

        Oil also gained as questions remain around Saudi Arabia’s ability to increase production with the Saudi’s pumping out just shy of 10.7 million barrels a day and Russia also breaking production records.



IEA warns of high oil price damage

The International Energy Agency is also putting out a note and a call to OPEC to immediately increase production before high oil prices start to cause economic damage.

     The IEA calls it a “red zone” where some say happens when U.S prices hit $3 US a gallon for consumers. The IEA is warning that higher oil prices will cause damage to growth in some of the world’s fastest growing economies.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil

Tuesday, October 02, 2018

Price spike warning: Price changes for Thursday, October 4th, 2018


Hi to all,



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



*Heating and stove oils show an increase of 3.9 cents a litre.

*Diesel adds 4.4 cents a litre, and...

*Gasoline shows an added 3.1 cents a litre.



Market highlights



Can OPEC meet demand?

With oil hitting $85 US a barrel yesterday, some are seeing further strength in oil as Iran sanctions get set to fully kick in the first week of November. While Iran is still producing, numbers are showing that output has dropped further with 1.7 million barrels a day produced from the OPEC member.

     Iran dropped close to 250,000 barrels a day since August.

     Venezuela also dropped production another 50,000 barrels a day with latest figures showing 1.25 million barrels a day.

     With OPEC production now at 32.8 million a day, some questions arose in the markets this week on whether the consortium can produce more if the markets needed it.

      The short answer may be “no”, but some are calling it a “soft ability” to respond to market needs.

       Libya remains volatile, but has maintained a million barrel a day output the last few weeks, while Russia, a non-OPEC producer, has put out almost 11.3 million barrels a day, a post-Soviet record.

        The ability of other non-OPEC producers is coming into play and that may be why some are thinking that it may be a “soft support” for $85 a barrel oil.

         Adding to the soft increase is the fact that, up to now, U.S domestic production has been stalled at 11 million barrels a day. Will we see some further growth now that oil prices have increased markedly?

         Of course, with rising oil comes higher refined product prices, and with oil increasing by almost $6 US since the third week of September, it is reflected in the numbers this week.



NAFTA 2.0 kicks in

Spurred by the signing/ratification of the new USMCA agreement, market forces had their say as speculators saw “business as usual” continuing as agreement was reached.

     Optimism amongst traders also spurred hopes that demand for oil will pick up as any shortfall felt in the economy before the agreement was reached will quickly swallow reserves and help support prices.

      The Canadian dollar has risen close on two cents against its U.S counterpart since the agreement was reached, absorbing some of the hit of rising prices this week.



That’s it for this week,



Regards,



George Murphy

Twitter @GeorgeMurphyOil  

Tuesday, September 25, 2018

Price changes for Thursday, September 27th, 2018


Hi to all,



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



*Heating and stove oils show an increase of a half cent a litre.

*Diesel fuel shows an increase of 4/10ths of a cent, and...

*Gasoline shows an increase of 1.2 cents a litre.



Market highlights



OPEC surprise

OPEC announced this week that their members will not step in and pick up production that will be lost from sanctioning actions against Iran.

     Unusual to see OPEC members supporting Iran by all appearances, but the move by OPEC sparked an increase to oil prices whose members said previous to this, that they would be happy to see oil prices sustained over $80 U.S a barrel.

     In the meantime, this sets up the prospect of a further rise in oil prices as production in Venezuela remains uncertain and has been falling further with political troubles in the South American country.



Trouble ahead?

With word from OPEC this week came along speculative buying that has also increased spot prices for refined products leading possibly into next week as well as oil prices have been trading over the $80 US mark for the second day in a row.

     Spot prices for heating, stove oil and Diesel are all up heading into the next session showing possible increases of two cents a litre.

      Gasoline spots are also up, showing an added 1.3 cents into next week so far.

     With Iran sanctions set to cut Iranian oil altogether, falling Venezuelan output and stalled U.S domestic output, the stage may already be set for “sustained” prices above $80 U.S a barrel oil as well as for higher refined product prices.

      OPEC is not likely to increase production with fears of creating another glut of oil in the markets, and even if sanctions were lifted tonight in Iran and the political situation in Venezuela suddenly solved its problems, production from these areas will not return quickly to solve the dilemma for consumers.

       Exactly how does anyone overcome a loss of close to four million barrels of production from the markets without someone having to pay a price for it?



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil

Tuesday, September 18, 2018

Price changes for Thursday, September 20, 2018


Hi to all,



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



*Heating and stove oils show a decrease of 1.4 cents a litre.

*Diesel shows a drop of 1.2 cents a litre.

*Gasoline shows a drop of 6/10ths of a cent a litre.



Market highlights



U.S inventory data shows a little good news

At a time when there started to be some concern for rising distillate prices, there is finally good news that consumers have been waiting for: A gain in distillate inventories.

     With the onset of the fall season just around the corner, distillate prices for heating, stove oil and Diesel all took a drop at the time of year they always rise.

     But it was the startling figure of a 6.2 million barrel gain in inventories for distillates that influenced a larger than expected drop in these fuels this week as any gain in inventories this time of year would be a positive for consumers.

     Gasoline also showed a gain in inventories of 1.3 million barrels.

     Crude oil showed a loss of 5.3 million barrels on 97.6 percent refiner capacity.



$80 U.S versus trade wars

Saudi Arabia has put word out in the markets that they “would be happy to see prices for oil over $80 U.S”.

       But will that stick?...

      The signals from the Middle East country helped spark oil prices late today as oil prices rose, but later lost some of those gains.

      Concerns still mount as  to where oil prices are headed as this person sees some volatility ahead with no clear direction in pricing. An ongoing tariff “back and forth” between China and the U.S sees the possibility of China facing a slowing economy as U.S gets set to add more tariffs to Chinese imports. That means less demand for a country that is a huge factor in determination of world crude prices.

      And while all this goes on, Iran still exports product to China while the Chinese have placed tariffs on U.S crude oil coming into its borders. If China still remains as a major customer of Iran, then could we be looking at a failure in part of sanctions placed by the U.S?



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil

Tuesday, September 11, 2018

Price changes for Thursday, September 13th, 2018


Hi to all,



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



*Heating and stove oil to increase by 1/10th of a cent a litre.

*Diesel fuel shows no change, and...

*Gasoline shows a drop of 3.3 cents a litre.



Market highlights



No damage from Gordon

With last week’s speculation over Hurricane Gordon came the possibility of supply disruptions and refinery shutdowns.

     But in the aftermath of Gordon coming ashore near the Louisiana-Mississippi border, no damage was realised from the storm and spot prices for gasoline started to retreat. That’s one reason for the price drop in gasoline this week.

     No worries here about Florence as this storm is predicted to hit the mid-Atlantic coastline somewhere in the area of South Carolina. There are no major oil processing facilities centered in the area in question, just mainly pipeline infrastructure.

      What might cause some rise in gasoline in the coming days is hoarding of the product as any storm brings the possibility of a shortage of any supplies, including from mass purchases of gasoline.

     Check this link for oil infrastructure in the U.S along with the predicted path of Florence: https://www.eia.gov/special/disruptions/



OPEC supplies come into question again.

A remarkable scene unfolding in Venezuela as a mass exodus has started from the OPEC member and South American country.

     Last reports from Venezuela show a huge drop in exports from the country, with amounts dropping to as low as 1.3 million barrels a day from last month’s 2.3 million barrels.

     Speculators are also worried about a continued wave of violence in Libya where extremists attacked the headquarters of the Libyan national oil company yesterday causing a brief interruption to exports.

     Sanctions against Iran are also starting to take effect ahead of November as more nations back out of oil purchase agreements with Iran.

     Iranian exports continue to drop off according to the Wall Street Journal with exports dropping an additional 660,000 barrels in August. Iran exported 1.6 million barrels a day for the month.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil

Tuesday, September 04, 2018

Price changes for Thursday, September 6th, 2018


Hi to all,



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



*Heating and stove oils to increase by 1.7 cents a litre.

*Diesel to increase by 2.2 cents a litre, and...

*Gasoline to increase by 1.6 cents a litre.



Market highlights



Hurricane Gordon first to affect pricing

Speculators first started making moves in the markets as early as Thursday last week as then tropical storm Gordon was first forecast to hit the Gulf of Mexico.

      Gordon is now classed as a class one Hurricane as it’s projected path takes it ashore between Louisiana and Mississippi close to some refinery infrastructure.

      Some offshore platforms, mainly natural gas, have been shut down as a precaution.

      Rain is the principle worry along with tidal surge that has the power to shut down refinery production. While Katrina in 2005 and Rita close behind it devastated output from the region, fears have been easing a bit knowing Gordon to be a force one storm rather than 2005.

       We’ll keep an ear out for any outages if they get critical.



OPEC production up

OPEC keeps on adding production as it’s fellow member, Iran puts up with dropping exports.

     OPEC produced close to 32.7 million barrels of oil a day in August, adding 420,000 barrels a day in total production as Iran’s exports fell from 2.2 million barrels to 1.5 million barrels a day.

     Iran is subject to a round of sanctions from the U.S that has led European Union countries, Japan and India to also join in dropping Iran as a source of oil.



Newfoundland and Labrador holds off on carbon tax plan

The government of the province has said it received an extension to its deadline to file a carbon tax plan.

     Alberta recently backed out of the plan, while Ontario is laying a challenge out to Ottawa on it’s right to impose one.

     While the plan has received an extension, perhaps the province could lower the gas tax that was supposed to be removed this fall as it may be some time before a final plan comes into being.

     The final four cent portion of the gas tax from the 2016 budget remains to return the gas tax to 16.5 cents a litre, pre-budget levels.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil  

Tuesday, August 28, 2018

Price changes for Thursday, August 30, 2018


Hi to all,



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



*Heating and stove oil to increase by 3.6 cents a litre.

*Diesel fuel shows an increase of 3.2 cents a litre, and...

*Gasoline shows an increase of 2.9 cents a litre.



Market highlights



Competition takes a step backwards with Ultramar sale

Consumers have lost a lever of competition and cheaper gasoline prices in Newfoundland and Labrador this week with the sale of most Ultramar stations to Irving this past week.

     With little to no notice, the markets here in the immediate northeast Avalon area lost the second lowest retailer of gasoline products. Ultramar’s Valuemax program was an added incentive to consumers here that helped save a few more pennies for consumers, but the program has been all but erased with the sale of retail stations to Irving.

     No word yet on whether Irving will step up and have a program to replace it.

     Question for me is whether the Federal Competition Bureau stepped in to have a look at the sale of the stations between the companies to see how consumers would possibly be affected.

     That’s a question I’ll be asking “sooner rather than later”.

    



Inventories drive oil, gasoline and distillate

Last Wednesday’s inventory report from the U.S Energy Information Administration was all that was needed to light up the price of oil this past week as inventories of crude oil were seen to have dropped by 5.8 million barrels.

     Oil prices increased a rough $4 U.S in the week after the report which also saw gasoline and distillate prices increase, with speculators starting to put added pressure on distillate fuels with summer drawing to a close.

     Refineries operated at 98.1 percent of overall capacity.



That’s it for this week!



Regards,



George Murphy
Twitter @GeorgeMurphyOil

Tuesday, August 21, 2018

Price changes for Thursday, August 23rd, 2018


Hi to all,

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

*Heating and stove oil to drop by 9/10ths of a cent a litre.
*Diesel fuel to drop by 1.1 cents a litre, and...
*Gasoline to drop by 1.3 cents a litre.

Market highlights

U.S draws from strategic reserve
While oil markets this week were fixed on Iran sanctions and a possible shortfall, the U.S answered back to that possibility by dipping into it’s strategic reserve, allowing an added 11 million barrels to flow into the markets to address any shortfalls that may arise should Iran sanctions take hold.
     The move is to ensure consumers don’t get hurt as a result of any shortage in supply come this fall.
     The U.S strategic reserve contains almost 6660 million barrels of crude to use in the event of any national emergency.

Sanctions start to kick in. But will they be effective?
Iran is starting to feel the pinch of sanctions that will come into full force starting this November, with nations from the European Union, Japan and India already cutting imports from the Middle East country.
      But questions swirl from China, who only recently, placed U.S imports into China under a 25 percent tariff.  With China being one of Iran’s largest buyers, the switch is already being made by China to have Iranian crude brought in.
      While Iran has it’s treasury under threat as a result, Iran itself an OPEC member, is coming out against the oil organization, expressing concern that other OPEC members will step in and take market share from Iran to its customers in the E.U and other nations it exports to.
       The question then may very well be how long Iran will tolerate other OPEC members hijacking its market share and what would they do to prepare for such an eventuality. Could Iran leave OPEC as a result?

API reports a draw on crude supply
The American Petroleum Institute has reported a larger than expected draw on its measure of crude inventory, but the inventory report everyone is waiting on will come from the U.S Energy Information Administration’s inventory numbers noon Wednesday.
      The API data reports a draw of 5.1 million barrels, along with a reported 990,000 barrel draw on gasoline inventories.
      No word on refiner capacity numbers, however.

That’s it for this week!

Regards to all,

George Murphy
Twitter @GeorgeMurphyOil

Tuesday, August 07, 2018

Price changes for Thursday, August 9th, 2018


Hi to all,



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



*Heating and stove oils to drop by 1.3 cents a litre.

*Diesel fuel to drop by 9/10ths of a cent a litre, and...

*Gasoline to drop by 1.9 cents a litre.



Market highlights



U.S inventories

U.S inventories again weighed on the markets early in this session as the Energy Information Administration’s data showed crude inventory building against expectations of a drop.

     U.S crude gained 3.8 million barrels even though U.S refiner capacity gained during the week, rising to 96.1 percentage points as refiners tried to take advantage of an “end of the season rush”.

     Distillate inventories also increased by 3 million barrels while U.S domestic dropped slightly to 10.9 million barrels a day.



Energy East on again?

The ongoing dispute between Saudi Arabia and Canada on Friedland’s human rights tweet earlier this week has some wondering what would happen if the Saudi’s pulled the plug on exports to Canada.

     Truth is, is probably nothing...

     More likely is the possibility that some shortages may be felt in Atlantic Canada with an ongoing situation in Venezuela.

     But while these threats are out there, it reinforces the fact that they could happen and the discussion needs to happen of asking “Now what?”

      With plenty of supply in Western Canada, some are again talking about a renewed drive to make Energy East pipeline a reality instead of a dream. Security of supply should be a central concern to our country and the issue cannot be ignored. But it also means the door for opportunities in this province for the future as concerns mount on where we get our oil resources from, and what those answers could/should be.

      By the way...Saudi Arabian imports into this country amount to about nine percent, according to Natural Resources Canada.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil

Tuesday, July 31, 2018

Price changes for Thursday, August 2nd, 2018


Hi to all,



Here’s what I have for this week’s price changes, all data in:



*Heating and stove oil to increase by 1.9 cents a litre.

*Diesel fuel to increase by 1.2 cents a litre, and...

*Gasoline shows an increase of 2.7 cents a litre.



Market highlights



U.S inventories

U.S inventories of crude oil and gasoline both took hits last Wednesday as supply concerns played into markets.

     Gasoline also dropped in supply as refiner capacity also dropped to 93.8 percentage points, barely keeping up with a strong read on demand last week.

     Inventories of gasoline also dropped a full percentage point closer to their five year running average. Gasoline inventories were a full five percentage points over the five year average from the previous week.



OPEC supply up

Latest figures from OPEC show that output by OPEC member countries rose in July month, adding 70,000 barrels a day to production of over 32 million barrels.

     Oil dropped today on the news after rising on supply concerns after a Houthi rebel rocket attack on two Saudi tankers last week closed a Saudi Arabian port to exports that initially increased oil prices through the pricing session.



Gas taxes. Time to make the downward move?

Budget 2016 saw a full doubling of the gas tax to gasoline as well as an added increase to some diesel fuels.

     While most of the gasoline tax has been removed, a full four cents remains before it falls back to it’s starting point of 16.5 cents pre-budget 2016.

      Consumers have done their fair share and have carried the burden long enough, so this extra four cents should be returned back to consumers who have been fighting an uphill battle in their part to balance the books.

      It would also be a great boost to anybody finishing up holidays, giving them a break to do more summer travel as the season wanes.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil

Tuesday, July 24, 2018

Price changes for Thursday, July 26th, 2018


Hi to all,



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



  • Heating and stove oils show a decrease of 6/10ths of a cent a litre.
  • Diesel fuel shows an increase of 1/10th of a  cent, and...
  • Gasoline shows an increase of 1/10th of a cent a litre



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



Market highlights



Trump keeps pushing buttons

While market focus remained mostly on possible over-supply concerns, Donald Trump’s comments on Iran to be cautious didn’t alarm the markets into raising prices-at least this time out.

     Speculators are still concerned with over-supply of the markets as Saudi Arabia was reported to have extended production well past it’s own production levels as Libyan crude also starts a slow return to the markets.

      With Saudi Arabia producing close to 10.7 million barrels a day in June month, Libya also started to send crude exports to European ports at a steady 700,000 barrels a day, adding to the over-supply concerns.

       Those concerns helped to keep Brent prices down to a rough $72 US a barrel this past seven days.



End of the driving season?

With the end of July fast approaching, speculators are now starting to turn toward the September buying contracts when focus starts to come off gasoline. With deliveries for these contracts set for thirty to forty five days out, speculators bets on summer pricing will soon start to show and consumers may start to see a steady decline in prices to “pre-summer” pricing.

     Some signs to watch for?

     Look for a steady addition to gasoline inventories in August as holidays end and school comes closer. It will be interesting to watch distillate fuels such as diesel and heating oils to see where prices may start to rise as we get closer to Fall.

      While it may appear that the gasoline season may be over, weather could still play an important role as hurricane season always brings the chance of disruption as well as rising prices in August/September.

       But another good sign comes from the U.S Energy Information Administration report from last week that showed gasoline inventories about five percent over inventories over a five year average for this time of year.



That’s it for this week!



Regards to all.



George Murphy

Twitter @GeorgeMurphyOil

Tuesday, July 17, 2018

Price changes for Thursday, July 19th, 2018


Hi to all,



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



*Heating and stove oils to drop by 2.6 cents a litre.

*Diesel fuel to drop by 2.7 cents a litre, and...

*Gasoline to drop by 1.4 cents a litre.



Market highlights



Saudi Arabia turns on the taps

A week ago it wasn’t thought possible that we would see a dramatic reversal in the markets as Saudi Arabia was found to have already broken it’s deal with fellow OPEC and non-OPEC producing nations. But according to last week’s production numbers, the Saud’s produced more oil onto the markets that helped send oil prices down.

     Saudi Arabia produced more than 10.7 million barrels a day in June month, according to figures released by OPEC, and all in spite of reaching an accord with other members to add just 600,000 barrels a day to the markets in an “effort” to prevent prices from rising. That news played into the markets through late last week.

     Also adding to the downwards pressure on prices was the news out of Libya that showed an uneasy peace agreement that would start exports from the African country amounting to 700,000 barrels a day, just shy of half its original production, a move that forced Brent prices lower.



Trump adds weight

Meanwhile, on this side of the world, Donald Trump talked about the possibility of releasing crude oil to the markets from the U.S strategic petroleum reserve, a move that some see as a quick attempt to get other OPEC members to fall in line with adding production. The reserve contains a rough 660 million barrels of oil held in the event of use during a national emergency.

     The idea weighed heavily on the markets this week as oil lost ground, WTI losing about $6 US over the past week and Brent dropping by close on $7 US.



U.S inventory report largely ignored

In spite of a U.S Energy Information Administration report that saw a draw of over 12 million  barrels, oil prices moved the opposite way as concerns over shortages disappeared in minutes.

      The report also showed a balance between refiner capacity of 96.7 percentage points and a drop in gasoline inventories of just 700,000 barrels of product.



That’s it for this week!



Make it a good one...



Regards,



George Murphy

Twitter @GeorgeMurphyOil