Price changes for Thursday, May 10th, 2018

Hi to all,

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

*Heating and stove oil to increase by 7/10ths of a cent a litre.

*Diesel fuel to increase by 3/10ths of a cent a litre, and...

*Gasoline shows a drop of 3/10ths of a cent a litre.

Market highlights

Trump pulls his own plug

Donald Trump made it reality today as market traders had suspected; that Trump would withdraw from the Iran nuclear deal, putting a stamp of formality on what others had already priced into the markets.

     It’s no surprise that he could pull the U.S plug on the deal when you look close. Maybe a settled hardened peace out of the agreement was done because the U.S needed Iranian oil back then, but it certainly doesn’t now.

     Growing U.S domestic production has grown a lot since the deal was first signed, so the loss of any Iranian imports of oil into the U.S wasn’t going to be a huge loss anyway. U.S imports just today have been reported to have dropped from 1.7 million barrels a day to today’s 1.5 million barrels a day.

     U.S domestic production has surpassed 10.6 million barrels a day, so it may be seen as an insignificant loss to the U.S markets.     But while speculators played the Iran card over the last few months, it did succeed in raising oil prices, and if sanctions on Iran’s oil are a target, it may be less lucrative than hitting it’s finances instead of oil exports. Consumers may see a slight rise in oil, but any sanctions on oil exports will take some time to take hold.

     The problem for the U.S administration now remains that it has isolated itself in a situation where it has to prove the sanctions are again needed with world agreement.

     Trump is just not getting it.

     Other signatories to the agreement like China, Germany, France and others of the European Union simply will not stop the agreement, and the United Nations has also come out now backing the initial arrangement in the Iran nuclear deal.

      Donald has himself, and his nation, painted into a corner.

U.S inventories are up

U.S crude oil inventories increased last week with a huge build of 6.2 million barrels that helped steady oil prices in the markets this week.

     Gasoline inventories also increased, rising by 1.2 million barrels over the last week. That also showed some effect, helping gas prices to retreat slightly in the last week.

     Distillate prices show an increase this week, supported by the news that inventories of that fuel group dropped by 3.9 million barrels.

     Refiner capacity was reported at 91.1 per cent.

That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil