Price changes for Thursday, September 27th, 2018

Hi to all,

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

*Heating and stove oils show an increase of a half cent a litre.

*Diesel fuel shows an increase of 4/10ths of a cent, and...

*Gasoline shows an increase of 1.2 cents a litre.

Market highlights

OPEC surprise

OPEC announced this week that their members will not step in and pick up production that will be lost from sanctioning actions against Iran.

     Unusual to see OPEC members supporting Iran by all appearances, but the move by OPEC sparked an increase to oil prices whose members said previous to this, that they would be happy to see oil prices sustained over $80 U.S a barrel.

     In the meantime, this sets up the prospect of a further rise in oil prices as production in Venezuela remains uncertain and has been falling further with political troubles in the South American country.

Trouble ahead?

With word from OPEC this week came along speculative buying that has also increased spot prices for refined products leading possibly into next week as well as oil prices have been trading over the $80 US mark for the second day in a row.

     Spot prices for heating, stove oil and Diesel are all up heading into the next session showing possible increases of two cents a litre.

      Gasoline spots are also up, showing an added 1.3 cents into next week so far.

     With Iran sanctions set to cut Iranian oil altogether, falling Venezuelan output and stalled U.S domestic output, the stage may already be set for “sustained” prices above $80 U.S a barrel oil as well as for higher refined product prices.

      OPEC is not likely to increase production with fears of creating another glut of oil in the markets, and even if sanctions were lifted tonight in Iran and the political situation in Venezuela suddenly solved its problems, production from these areas will not return quickly to solve the dilemma for consumers.

       Exactly how does anyone overcome a loss of close to four million barrels of production from the markets without someone having to pay a price for it?

That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, September 20, 2018

Hi to all,

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

*Heating and stove oils show a decrease of 1.4 cents a litre.

*Diesel shows a drop of 1.2 cents a litre.

*Gasoline shows a drop of 6/10ths of a cent a litre.

Market highlights

U.S inventory data shows a little good news

At a time when there started to be some concern for rising distillate prices, there is finally good news that consumers have been waiting for: A gain in distillate inventories.

     With the onset of the fall season just around the corner, distillate prices for heating, stove oil and Diesel all took a drop at the time of year they always rise.

     But it was the startling figure of a 6.2 million barrel gain in inventories for distillates that influenced a larger than expected drop in these fuels this week as any gain in inventories this time of year would be a positive for consumers.

     Gasoline also showed a gain in inventories of 1.3 million barrels.

     Crude oil showed a loss of 5.3 million barrels on 97.6 percent refiner capacity.

$80 U.S versus trade wars

Saudi Arabia has put word out in the markets that they “would be happy to see prices for oil over $80 U.S”.

       But will that stick?...

      The signals from the Middle East country helped spark oil prices late today as oil prices rose, but later lost some of those gains.

      Concerns still mount as  to where oil prices are headed as this person sees some volatility ahead with no clear direction in pricing. An ongoing tariff “back and forth” between China and the U.S sees the possibility of China facing a slowing economy as U.S gets set to add more tariffs to Chinese imports. That means less demand for a country that is a huge factor in determination of world crude prices.

      And while all this goes on, Iran still exports product to China while the Chinese have placed tariffs on U.S crude oil coming into its borders. If China still remains as a major customer of Iran, then could we be looking at a failure in part of sanctions placed by the U.S?

That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, September 13th, 2018

Hi to all,

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

*Heating and stove oil to increase by 1/10^th of a cent a litre.

*Diesel fuel shows no change, and...

*Gasoline shows a drop of 3.3 cents a litre.

Market highlights

No damage from Gordon

With last week’s speculation over Hurricane Gordon came the possibility of supply disruptions and refinery shutdowns.

     But in the aftermath of Gordon coming ashore near the Louisiana-Mississippi border, no damage was realised from the storm and spot prices for gasoline started to retreat. That’s one reason for the price drop in gasoline this week.

     No worries here about Florence as this storm is predicted to hit the mid-Atlantic coastline somewhere in the area of South Carolina. There are no major oil processing facilities centered in the area in question, just mainly pipeline infrastructure.

      What might cause some rise in gasoline in the coming days is hoarding of the product as any storm brings the possibility of a shortage of any supplies, including from mass purchases of gasoline.

     Check this link for oil infrastructure in the U.S along with the predicted path of Florence: https://www.eia.gov/special/disruptions/

OPEC supplies come into question again.

A remarkable scene unfolding in Venezuela as a mass exodus has started from the OPEC member and South American country.

     Last reports from Venezuela show a huge drop in exports from the country, with amounts dropping to as low as 1.3 million barrels a day from last month’s 2.3 million barrels.

     Speculators are also worried about a continued wave of violence in Libya where extremists attacked the headquarters of the Libyan national oil company yesterday causing a brief interruption to exports.

     Sanctions against Iran are also starting to take effect ahead of November as more nations back out of oil purchase agreements with Iran.

     Iranian exports continue to drop off according to the Wall Street Journal with exports dropping an additional 660,000 barrels in August. Iran exported 1.6 million barrels a day for the month.

That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, September 6th, 2018

Hi to all,

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

*Heating and stove oils to increase by 1.7 cents a litre.

*Diesel to increase by 2.2 cents a litre, and...

*Gasoline to increase by 1.6 cents a litre.

Market highlights

Hurricane Gordon first to affect pricing

Speculators first started making moves in the markets as early as Thursday last week as then tropical storm Gordon was first forecast to hit the Gulf of Mexico.

      Gordon is now classed as a class one Hurricane as it’s projected path takes it ashore between Louisiana and Mississippi close to some refinery infrastructure.

      Some offshore platforms, mainly natural gas, have been shut down as a precaution.

      Rain is the principle worry along with tidal surge that has the power to shut down refinery production. While Katrina in 2005 and Rita close behind it devastated output from the region, fears have been easing a bit knowing Gordon to be a force one storm rather than 2005.

       We’ll keep an ear out for any outages if they get critical.

OPEC production up

OPEC keeps on adding production as it’s fellow member, Iran puts up with dropping exports.

     OPEC produced close to 32.7 million barrels of oil a day in August, adding 420,000 barrels a day in total production as Iran’s exports fell from 2.2 million barrels to 1.5 million barrels a day.

     Iran is subject to a round of sanctions from the U.S that has led European Union countries, Japan and India to also join in dropping Iran as a source of oil.

Newfoundland and Labrador holds off on carbon tax plan

The government of the province has said it received an extension to its deadline to file a carbon tax plan.

     Alberta recently backed out of the plan, while Ontario is laying a challenge out to Ottawa on it’s right to impose one.

     While the plan has received an extension, perhaps the province could lower the gas tax that was supposed to be removed this fall as it may be some time before a final plan comes into being.

     The final four cent portion of the gas tax from the 2016 budget remains to return the gas tax to 16.5 cents a litre, pre-budget levels.

That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil