Tuesday, June 05, 2018

Price changes for Thursday, June 7th, 2018


Hi to all,



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



*Heating, stove and Diesel fuel all predicted to drop by 1.9 cents a litre, and...

*Gasoline to drop by two cents a litre.



Market highlights



OPEC to meet June 22nd

OPEC and non-OPEC producers will meet towards the end of the month to discuss formally increasing production back to more “normal” production levels.

     OPEC and non-OPEC producers met in November 2015 and agreed to institute a production cut that added up to 1.8 million barrels a day in an effort to absorb a glut in world oil estimated to be close to 3 billion barrels of supply. The move to cut production, OPEC believes, has worked to “return the market to balance” and now they want to add production to prevent oil prices rising past the $70 U.S a barrel mark in an effort to keep other producers, particularly shale producers from entering the market.

     Because of political turmoil in Venezuela, production has dropped to 1.4 million barrels a day from a recorded high of 3 million barrels a day in 1997 to today’s 1.4 million barrels a day. OPEC also wants to meet the shortfall in production there and Nigeria in order to “control rising prices”.



Market watching

*U.S EIA inventory report for Wednesday. Watch for signs of building crude as more domestic production is added. Second factor worth watching as a signal of consumer sentiment will be gasoline inventory numbers. As prices have risen, we’ll get a better sense of consumers’ feelings on prices at the pump. A build in inventory will send a strong signal that consumers are reigning back on consumption and could signal further signals that prices will retreat.

*Baker Hughes Friday rig count: If the number of rigs increase, it will signal new entrants into the oil patch, sending further signals of growing U.S domestic production.

*OPEC monthly production: Any signals that OPEC production may have already been signaled to members could have been detected in May total sales. If not, a robust growth in production should be picked up in the next report during the first week of July for June month.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil

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