Tuesday, May 22, 2018

Price changes for Thursday, May 24th, 2018


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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