Tuesday, May 15, 2018

Price changes for Thursday, May 17, 2018


Hi to all,



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



*Heating and stove oil to increase by 2.4 cents a litre.

*Diesel fuel also to increase by 2.4 cents a litre, and...

*Gasoline  to increase by 2.7 cents a litre.



Market highlights



*Middle East tensions continued to weigh on the markets this past week as Israel and Iran stepped up their tit-for-tat with Israel launching attacks against Iranian positions in Syria.



*Support for higher oil prices also comes from collapsing production in Venezuela as production from the South American OPEC member has fallen from 2.1 million barrels a day in January 2017 to April 2018’s production of 1.43 million barrels a day. While demand has risen hand in hand with OPEC production cuts, production from Venezuela has fallen well below their own production from years back, helping to erase part of the world glut of oil.



*OPEC compliance continues to be near a hundred percent as total OPEC production cuts have steadily fallen since the implementation of cuts in November 2016 to support oil and erase the glut of oil on the markets. Oil demand for the last three months has actually been averaging around 31.93 million barrels a day. Only Nigeria has reported an increase in production so far this month.

     What is remarkable this time around is the fact that all members have not cheated on quotas as they have in other times of cuts which makes rising oil prices more amazing to watch.



Watching:

     *Watching the U.S rig count. Last week showed the U.S rig count increase by ten rigs as a sign of some drillers entering the markets.

     *U.S domestic production increased by 91,000 barrels this past week as producers entered the fields and added to production that has averaged 35,000 barrels a week increase the last few years. There will be new inventory data released next week which may show further strong growth in domestic production.

     *U.S inventory data showed a drop in crude and gasoline inventories with both showing drops of 2.2 million barrels. New inventory data comes out Wednesday at noon Newfoundland time.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil

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