Price changes for Thursday, August 30, 2018

Hi to all,

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

*Heating and stove oil to increase by 3.6 cents a litre.

*Diesel fuel shows an increase of 3.2 cents a litre, and...

*Gasoline shows an increase of 2.9 cents a litre.

Market highlights

Competition takes a step backwards with Ultramar sale

Consumers have lost a lever of competition and cheaper gasoline prices in Newfoundland and Labrador this week with the sale of most Ultramar stations to Irving this past week.

     With little to no notice, the markets here in the immediate northeast Avalon area lost the second lowest retailer of gasoline products. Ultramar’s Valuemax program was an added incentive to consumers here that helped save a few more pennies for consumers, but the program has been all but erased with the sale of retail stations to Irving.

     No word yet on whether Irving will step up and have a program to replace it.

     Question for me is whether the Federal Competition Bureau stepped in to have a look at the sale of the stations between the companies to see how consumers would possibly be affected.

     That’s a question I’ll be asking “sooner rather than later”.

    

Inventories drive oil, gasoline and distillate

Last Wednesday’s inventory report from the U.S Energy Information Administration was all that was needed to light up the price of oil this past week as inventories of crude oil were seen to have dropped by 5.8 million barrels.

     Oil prices increased a rough $4 U.S in the week after the report which also saw gasoline and distillate prices increase, with speculators starting to put added pressure on distillate fuels with summer drawing to a close.

     Refineries operated at 98.1 percent of overall capacity.

That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, August 23rd, 2018

Hi to all,

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

*Heating and stove oil to drop by 9/10ths of a cent a litre.

*Diesel fuel to drop by 1.1 cents a litre, and...

*Gasoline to drop by 1.3 cents a litre.

Market highlights

U.S draws from strategic reserve

While oil markets this week were fixed on Iran sanctions and a possible shortfall, the U.S answered back to that possibility by dipping into it’s strategic reserve, allowing an added 11 million barrels to flow into the markets to address any shortfalls that may arise should Iran sanctions take hold.

     The move is to ensure consumers don’t get hurt as a result of any shortage in supply come this fall.

     The U.S strategic reserve contains almost 6660 million barrels of crude to use in the event of any national emergency.

Sanctions start to kick in. But will they be effective?

Iran is starting to feel the pinch of sanctions that will come into full force starting this November, with nations from the European Union, Japan and India already cutting imports from the Middle East country.

      But questions swirl from China, who only recently, placed U.S imports into China under a 25 percent tariff.  With China being one of Iran’s largest buyers, the switch is already being made by China to have Iranian crude brought in.

      While Iran has it’s treasury under threat as a result, Iran itself an OPEC member, is coming out against the oil organization, expressing concern that other OPEC members will step in and take market share from Iran to its customers in the E.U and other nations it exports to.

       The question then may very well be how long Iran will tolerate other OPEC members hijacking its market share and what would they do to prepare for such an eventuality. Could Iran leave OPEC as a result?

API reports a draw on crude supply

The American Petroleum Institute has reported a larger than expected draw on its measure of crude inventory, but the inventory report everyone is waiting on will come from the U.S Energy Information Administration’s inventory numbers noon Wednesday.

      The API data reports a draw of 5.1 million barrels, along with a reported 990,000 barrel draw on gasoline inventories.

      No word on refiner capacity numbers, however.

That’s it for this week!

Regards to all,

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, August 9th, 2018

Hi to all,

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

*Heating and stove oils to drop by 1.3 cents a litre.

*Diesel fuel to drop by 9/10ths of a cent a litre, and...

*Gasoline to drop by 1.9 cents a litre.

Market highlights

U.S inventories

U.S inventories again weighed on the markets early in this session as the Energy Information Administration’s data showed crude inventory building against expectations of a drop.

     U.S crude gained 3.8 million barrels even though U.S refiner capacity gained during the week, rising to 96.1 percentage points as refiners tried to take advantage of an “end of the season rush”.

     Distillate inventories also increased by 3 million barrels while U.S domestic dropped slightly to 10.9 million barrels a day.

Energy East on again?

The ongoing dispute between Saudi Arabia and Canada on Friedland’s human rights tweet earlier this week has some wondering what would happen if the Saudi’s pulled the plug on exports to Canada.

     Truth is, is probably nothing...

     More likely is the possibility that some shortages may be felt in Atlantic Canada with an ongoing situation in Venezuela.

     But while these threats are out there, it reinforces the fact that they could happen and the discussion needs to happen of asking “Now what?”

      With plenty of supply in Western Canada, some are again talking about a renewed drive to make Energy East pipeline a reality instead of a dream. Security of supply should be a central concern to our country and the issue cannot be ignored. But it also means the door for opportunities in this province for the future as concerns mount on where we get our oil resources from, and what those answers could/should be.

      By the way...Saudi Arabian imports into this country amount to about nine percent, according to Natural Resources Canada.

That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil