Price changes for Thursday, August 2nd, 2018

Hi to all,

Here’s what I have for this week’s price changes, all data in:

*Heating and stove oil to increase by 1.9 cents a litre.

*Diesel fuel to increase by 1.2 cents a litre, and...

*Gasoline shows an increase of 2.7 cents a litre.

Market highlights

U.S inventories

U.S inventories of crude oil and gasoline both took hits last Wednesday as supply concerns played into markets.

     Gasoline also dropped in supply as refiner capacity also dropped to 93.8 percentage points, barely keeping up with a strong read on demand last week.

     Inventories of gasoline also dropped a full percentage point closer to their five year running average. Gasoline inventories were a full five percentage points over the five year average from the previous week.

OPEC supply up

Latest figures from OPEC show that output by OPEC member countries rose in July month, adding 70,000 barrels a day to production of over 32 million barrels.

     Oil dropped today on the news after rising on supply concerns after a Houthi rebel rocket attack on two Saudi tankers last week closed a Saudi Arabian port to exports that initially increased oil prices through the pricing session.

Gas taxes. Time to make the downward move?

Budget 2016 saw a full doubling of the gas tax to gasoline as well as an added increase to some diesel fuels.

     While most of the gasoline tax has been removed, a full four cents remains before it falls back to it’s starting point of 16.5 cents pre-budget 2016.

      Consumers have done their fair share and have carried the burden long enough, so this extra four cents should be returned back to consumers who have been fighting an uphill battle in their part to balance the books.

      It would also be a great boost to anybody finishing up holidays, giving them a break to do more summer travel as the season wanes.

That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, July 26th, 2018

Hi to all,

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

• Heating and stove oils show a decrease of 6/10ths of a cent a litre.
• Diesel fuel shows an increase of 1/10^th of a  cent, and...
• Gasoline shows an increase of 1/10^th of a cent a litre

Keep in mind that my margin for error is 3/10ths of a cent.

Market highlights

Trump keeps pushing buttons

While market focus remained mostly on possible over-supply concerns, Donald Trump’s comments on Iran to be cautious didn’t alarm the markets into raising prices-at least this time out.

     Speculators are still concerned with over-supply of the markets as Saudi Arabia was reported to have extended production well past it’s own production levels as Libyan crude also starts a slow return to the markets.

      With Saudi Arabia producing close to 10.7 million barrels a day in June month, Libya also started to send crude exports to European ports at a steady 700,000 barrels a day, adding to the over-supply concerns.

       Those concerns helped to keep Brent prices down to a rough $72 US a barrel this past seven days.

End of the driving season?

With the end of July fast approaching, speculators are now starting to turn toward the September buying contracts when focus starts to come off gasoline. With deliveries for these contracts set for thirty to forty five days out, speculators bets on summer pricing will soon start to show and consumers may start to see a steady decline in prices to “pre-summer” pricing.

     Some signs to watch for?

     Look for a steady addition to gasoline inventories in August as holidays end and school comes closer. It will be interesting to watch distillate fuels such as diesel and heating oils to see where prices may start to rise as we get closer to Fall.

      While it may appear that the gasoline season may be over, weather could still play an important role as hurricane season always brings the chance of disruption as well as rising prices in August/September.

       But another good sign comes from the U.S Energy Information Administration report from last week that showed gasoline inventories about five percent over inventories over a five year average for this time of year.

That’s it for this week!

Regards to all.

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, July 19th, 2018

Hi to all,

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

*Heating and stove oils to drop by 2.6 cents a litre.

*Diesel fuel to drop by 2.7 cents a litre, and...

*Gasoline to drop by 1.4 cents a litre.

Market highlights

Saudi Arabia turns on the taps

A week ago it wasn’t thought possible that we would see a dramatic reversal in the markets as Saudi Arabia was found to have already broken it’s deal with fellow OPEC and non-OPEC producing nations. But according to last week’s production numbers, the Saud’s produced more oil onto the markets that helped send oil prices down.

     Saudi Arabia produced more than 10.7 million barrels a day in June month, according to figures released by OPEC, and all in spite of reaching an accord with other members to add just 600,000 barrels a day to the markets in an “effort” to prevent prices from rising. That news played into the markets through late last week.

     Also adding to the downwards pressure on prices was the news out of Libya that showed an uneasy peace agreement that would start exports from the African country amounting to 700,000 barrels a day, just shy of half its original production, a move that forced Brent prices lower.

Trump adds weight

Meanwhile, on this side of the world, Donald Trump talked about the possibility of releasing crude oil to the markets from the U.S strategic petroleum reserve, a move that some see as a quick attempt to get other OPEC members to fall in line with adding production. The reserve contains a rough 660 million barrels of oil held in the event of use during a national emergency.

     The idea weighed heavily on the markets this week as oil lost ground, WTI losing about $6 US over the past week and Brent dropping by close on $7 US.

U.S inventory report largely ignored

In spite of a U.S Energy Information Administration report that saw a draw of over 12 million  barrels, oil prices moved the opposite way as concerns over shortages disappeared in minutes.

      The report also showed a balance between refiner capacity of 96.7 percentage points and a drop in gasoline inventories of just 700,000 barrels of product.

That’s it for this week!

Make it a good one...

Regards,

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, July 12th, 2018

Hi to all,

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

*Heating and stove oils to drop by 1.2 cents a litre.

*Diesel fuel shows a drop of 1/10^th of a cent a litre (no change) and...

*Gasoline shows a slight drop of 8/10ths of a cent a litre.

Market highlights

Saudi’s turn on the taps

OPEC member Saudi Arabia surprised everyone, including fellow OPEC member with the release of production figures earlier this week that caught even the markets off-guard.

      Saudi Arabia produced almost 10.7 million barrels a day during June month, up from 9.98 million barrels in May, and most of it ahead of the June 22^nd meeting of OPEC and non-OPEC members who only then agreed to increase production.

      Venezuela was the big loser of production amidst internal problems as production there slipped below 1.4 million barrels a day from an average daily production of 2.91 million barrels a day in 2017.

       OPEC still has a long way to go to meet the shortfall in oil worldwide, but it is widely believed that only the Saudi’s can meet any needed production immediately to the markets.

Oil markets remain mostly “neutral” this week

The latest U.S Energy Information Administration inventory report, while nothing to cheer about, at least didn’t give speculators reason to celebrate.

      With refiner capacity down slightly by 4/10ths of a percentage point, crude oil inventories showed a slight increase of 1.2 million barrels all amidst market chatter of significant crude shortfalls and supply outages.

       Also, with the drop in capacity came a very slight decrease of 1.5 million barrels of gasoline, showing that production is close to meeting any demand for product out there.

       Prices remain at a balance at a critical time however, as any drop in refiner capacity will have to be met with an increase in product in order to avoid any increase to consumer prices. That may be hard as consumers hit the roads for the holidays.

Canadian dollar up slightly

The Canadian dollar increased slightly against it’s U.S cousin over the past week, rising  close on 1.5 cents against the greenback.

      With prices for refined product also staying mostly fixed over the past seven days, the dollar increase translated to a corresponding drop in prices, mostly affecting heating oil and gasoline prices.

That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, July 5th, 2018

Hi to all,

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

*Heating and stove oils to increase by 2.5 cents a litre.

*Diesel fuel to increase by 2.3 cents a litre, and...

*Gasoline to increase by 3.5 cents a litre.

***

Consumers to get hit at the pumps this week

Conception Bay South, NL, July 3^rd, 2018 – “Consumers in Newfoundland and Labrador, Nova Scotia and New Brunswick can all expect another hit at the pumps this week as shortfalls in oil and pressure on gasoline supplies mount”.

      That news from George Murphy, group researcher with the Consumer group for fair Gas Prices.

     “A quick look at the inventory data for last Wednesday was enough to put some added pressure on oil and refined commodities this past week as oil inventories took a hit as supplies from Alberta to the U.S were curtailed due to an outage at the Syncrude facility there. It took 350,000 barrels offline. Match that with doubts around Saudi Arabia’s ability to keep ahead of supply disruptions from both Libya and Venezuela, and we have another recipe for rising prices”. Murphy said.

     “To complicate matters further, we haven’t even considered the costs with Trump’s sanctioning of Iran in November taking an additional 500,000 barrels a day offline from U.S imports.

     “Gasoline inventories, while up slightly last week, were still tempered with the fact that refiner capacity was recorded at well over 97 percentage points, barely keeping ahead of demand. The capacity number also sucked a lot of crude through the pipes, dropping supplies by over nine million barrels in the last week. We’ll see new inventory data tomorrow to see if this trend continues. If it does, I’d be extremely worried!

     “Numbers aren’t looking good for Heating and stove oil users as spot prices are a rough thirty cents a litre than the same time in 2017. What cost a rough 47 cents on the New York markets last year now cost 72 cents today. That, and taxes adds up to a lot of money, or almost $270 to fill the oil fuel tank. If that doesn’t say something to consumers, then I don’t know what will. Gasoline numbers are no different seeing an increase in spot prices by close on the same, this time by 26 cents over last year, or a rough $16 based on a sixty litre fill-up”.

     “All of a sudden, there’s trouble ahead. If supplies don’t return to normal, inventories don’t climb and the dollar stays low, then consumers will have trouble for the foreseeable future. It could be a colder than usual winter.”

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For more information, contact:

George Murphy

Twitter @GeorgeMurphyOil