Hi to all,
Here’s what I have
for price changes for Thursday:
*Heating and stove
oil to increase by 1.4 cents a litre.
*Diesel fuel to
increase by two cents a litre, and...
*Gasoline shows a
2.1 cent a litre increase at the pumps.
Market highlights
Watching the
inventory wheel go around...
We may be about to
hit “peak pricing” this season...
The last time gasoline prices spiked as severely as they did, a measure I like
to call “enforced conservation’” stepped in to help bring prices down. Numbers
I have seen a long time ago seem to add to the fact that because of higher
prices, consumers are forced to buy only what they can afford rather that what
they really need. In other words, they’ll “reign back” their purchases of fuel
with that same $20. They don’t increase their spending a great deal, and, if
they do, it’s out of necessity that they do it.
Impacts on inventories are first seen south of the border where everything is
relatively close travel-wise. And when consumers are buying less product for
the same amount of money, it tends to reflect on U.S inventories sooner rather
than later.
American Petroleum Institute data from this evening has shown an increase in
gasoline inventories by just shy of a million barrels, but the real data to
watch will be from the U.S EIA noon Newfoundland and Labrador time.
I’m keeping an eye to the U.S as we approach the start of the U.S summer
driving season this weekend as prices have now started hitting $3 US a gallon
in most areas.
Tomorrow’s
inventory report may be the first signal that U.S consumers are getting close
to their breaking point and have already started to conserve as prices rise.
Iran tensions
Iran has turned
down new U.S conditions needed to be met for Iran to avoid a new series of
sanctions.
In a speech on Monday, secretary of State Mike Pompeo set out some pretty harsh
conditions that include Iran not using its influence in other areas of the
Middle East. To tell the truth, it would have been a surprise had Iran agreed
to some of those conditions set out in a twelve point message of “asks” from
the U.S in order to avoid sanctions.
Iran
is also asking European Union members who support the present Iran nuclear deal
to purchase more oil from them in the event that oil sanctions hit Iran. The
move may hep it avoid any drop in production where product was shipped to the
U.S.
That’s it for this
week!
Regards,
George Murphy
Twitter
@GeorgeMurphyOil
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