Hi to all,
Here’s what I have for this week’s price changes:
*Heating and stove oils show an increase of 3.9 cents a litre.
*Diesel adds 4.4 cents a litre, and...
*Gasoline shows an added 3.1 cents a litre.
Can OPEC meet demand?
With oil hitting $85 US a barrel yesterday, some are seeing further strength in oil as Iran sanctions get set to fully kick in the first week of November. While Iran is still producing, numbers are showing that output has dropped further with 1.7 million barrels a day produced from the OPEC member.
Iran dropped close to 250,000 barrels a day since August.
Venezuela also dropped production another 50,000 barrels a day with latest figures showing 1.25 million barrels a day.
With OPEC production now at 32.8 million a day, some questions arose in the markets this week on whether the consortium can produce more if the markets needed it.
The short answer may be “no”, but some are calling it a “soft ability” to respond to market needs.
Libya remains volatile, but has maintained a million barrel a day output the last few weeks, while Russia, a non-OPEC producer, has put out almost 11.3 million barrels a day, a post-Soviet record.
The ability of other non-OPEC producers is coming into play and that may be why some are thinking that it may be a “soft support” for $85 a barrel oil.
Adding to the soft increase is the fact that, up to now, U.S domestic production has been stalled at 11 million barrels a day. Will we see some further growth now that oil prices have increased markedly?
Of course, with rising oil comes higher refined product prices, and with oil increasing by almost $6 US since the third week of September, it is reflected in the numbers this week.
NAFTA 2.0 kicks in
Spurred by the signing/ratification of the new USMCA agreement, market forces had their say as speculators saw “business as usual” continuing as agreement was reached.
Optimism amongst traders also spurred hopes that demand for oil will pick up as any shortfall felt in the economy before the agreement was reached will quickly swallow reserves and help support prices.
The Canadian dollar has risen close on two cents against its U.S counterpart since the agreement was reached, absorbing some of the hit of rising prices this week.
That’s it for this week,