Hi to all,
Here’s what I have for this week’s price changes:
*Heating, stove oil and Diesel all show down by two cents a litre.
*Gasoline shows a drop of five cents a litre.
*Keep in mind that winter blending may throw off the distillate numbers somewhat.
Saudi’s and Russians sign on to up production
When I said a couple of weeks ago that there was soft support for oil at $85 US a barrel, the news that the Saudi’s and Russians had entered into an extended production agreement confirmed it.
With both countries in an “unofficial, secret” agreement to add production that was agreed to in September, traders saw it as a move that would only add to widening speculation of building supply worldwide, and all in spite of dropping production from Venezuela and coming sanctions against Iran.
Saudi threat over Khasoggi incident proves empty
Blogger and journalist Jamal Khasoggi remains on the missing list and Trump is appearing to back away as the Saudi’s also back down from a threat to cut it’s own production.
Both sides now appear to use any excuse to downplay the fact that a man has gone missing in the interests of diffusing an explosive situation. A cut in production would have raised prices, but it had the potential to cause an increase in internal Saudi unrest and economic damage to the U.S, who seem to have toned down their rhetoric on Khasoggi.
Market traders continued to send oil downwards in spite of the “threat”.
U.S crude inventories increase
The latest U.S crude inventory report last week showed a build of six million barrels, while gasoline also increased by one million.
Distillate inventories were down by 2.7 million barrels on 88.8 percent refiner capacity, a sign that U.S refiners were heading into maintenance mode.
With capacity down, gasoline also started to drop as demand was seen to be lower with the inventory build.
That’s it for this week!