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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