Price changes for Thursday, February 8th, 2018

Hi to all,

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

*Heating and stove oils show a drop of 3.4 cents a litre.

*Diesel shows a drop of 2 cents a litre, and...

*Gasoline shows a drop of 1.9 cents a litre.

Market highlights

Market speculators focus of U.S domestic output

The retreat in oil price this week may be blamed by some on the fall of the stock market yesterday, but that’s not necessarily the case...

      Stocks recovered the next day in the market correction, but oil still showed a retreat in today’s trading with strong indications that traders were focused more on the growth in U.S domestic output, due to hit ten million barrels a day either this week, or next.

      The mythological number needs just 80,000 barrels to hit the mark.

      That number will probably be achieved in short order with the addition of another seven rigs in the overall U.S rig count on Friday that shows a steady growth of smaller producers getting in while oil prices are up.

       The next few months are going to be interesting to watch as oil prices try to strike a new balance of new, smaller shale producers trying to get a fair price against the former OPEC super oil power in the markets. If oil goes low, OPEC loses as well as smaller producers and oil instability will result.

       Prices will be in flux until then with more risk to the downside as chances of outside factors influencing OPEC pricing decisions become moot with additional U.S capacity.

Market focuses away from heating/stove oils

With February comes the March buying contract and thoughts of traders switch from heating, stove oils and other distillates like Diesel to the promise of  warmer spring weather and strength in demand for Gasoline.

     Often this time of year, what becomes more noticeable in the price changes is the fact that distillates are dropping more this week than Gasoline, a sure sign that relief from winter is on the way if not because of anything else but the promise of spring.

     While numbers there are dropping, note some support for gasoline as the drop this week shows some sign of “strength” as the drop is not so prevalent.

That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil