Trump taking credit for lower oil? You're kidding, right? Price changes for Thursday, November 29th, 2018

Hi to all,

Here’s what I have for this Thursday’s price changes. Keep in mind that these numbers will be updated to contain Tuesday data in the final numbers. Also, distillate fuels like heating, stove oil and Diesel may be off slightly due to winter blending.

*Heating and stove oils show a drop of 5.2 cents a litre.

*Diesel fuel shows a drop of six cents a litre, and...

*Gasoline shows a drop of 3.2 cents a litre.

Market highlights

Trump tries to take credit for lower prices

     Donald Trump is trying to take credit for lower prices, but the reality of his words may come back to haunt him.

     Why?

     Well, the lower that oil prices go south of the border, the more likely he is to damage the growth in U.S domestic production!

      For some time now, growth in the shale fields was based simply on more money earned for a higher oil price, so lots of junior producers and some majors went back to the drilling fields and domestic production blossomed right along with it.

      But now that oil prices are slipping, the prospect of better profit margins is slipping away. Some may be taking that sober second thought about entering the energy field while such insecurity reigns. And the Saudi’s and OPEC may be quick to lash out.

      Will he be so quick to take credit if the markets collapse again?

Saudi Arabia and OPEC worried?

       While oil prices have been slipping, the prospect of lower revenues to Middle Eastern exporters again is coming into focus with most of that pointing directly at Saudi Arabia, who have to be worried that unrest again will bring unease within its borders as happened in 2014.

      The last time prices collapsed, the Kingdom was left with much lower revenues and was forced to cut back on some major programming, and faced a larger than usual problem of keeping everyone happy who had been drawing from the kingdom’s riches.

       If the Saudi’s and OPEC, in concert with Russia, decide to cut production, it could have the reverse effect and open the markets to the whims of growing U.S domestic production, thus complicating their end desired result.

       If they maintain present levels, the markets may see it as over-production and that would likely send oil lower causing grief within its borders.

Demand lower?

      Trump’s tariff war against China is helping to send oil prices lower.

      As the prospect of an economic slowdown as a result of tariffs on goods from China into the U.S grows, the promise of lower oil use in China, the world’s second largest consumer, is also weighing on the markets.

      In the meantime, U.S inventories reported a build in crude oil inventory in spite of an increase in refiner capacity.

      Distillate inventories were also down, but less than expected and gasoline inventories reported a drop of just shy of 1.3 million barrels.

That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil   

Price changes for Thursday, November 20, 2018

Hi to all,

Here’s what I have for price changes for this week. Keep in mind that these numbers will be updated by 10:00AM tomorrow.

*Heating and stove oils show a drop of 2.4 cents a litre.

*Diesel fuel shows a drop of 2.5 cents a litre, and...

*Gasoline shows a drop of 2.2 cents a litre.

Market highlights

OPEC meets in December

OPEC will meet the first week of December to discuss measures to help support the price of oil from falling further.

     Those measures may include a more extensive cut by a million barrels a day by OPEC members to help support prices. Saudi Arabia, just two weeks ago, stepped into the falling price issue and announced they would curtail exports by 500,000 barrels a day, a move that wasn’t seen by market analysts as being enough to help.

Oil falls further on earnings and economic reports

Oil prices fell almost seven percentage points again today as lower than expected earnings reports signalled a world economic slowdown was in the works.

     Any economic slowdown also sees demand for crude oil drop along with it, part reason why the panic sell-off was on again in the markets today.

Oil inventories up

Oil prices weren’t helped any this past week as inventories were up, according to the Energy Information Administration’s inventory report.

      Inventories of crude oil were up again, this time by 10.3 million barrels against an expectation of 2.2 million barrels.

      Gasoline inventories were down by 1.4 million barrels, while distillate inventories dipped by 3.6 million barrels.

      Refiner capacity was measured at 90.1 percent as refineries were mostly down for winter switchovers and maintenance. This was not seen as an issue with prices as, when capacity picks up, inventories of refined products would be in better shape than what was shown this past week.

     The next inventory report is due Wednesday from the EIA.

     That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, November 15th, 2018

Hi to all,

Here’s what I have for this week’s price changes based on SIX days data. These numbers will be updated again via social media and Twitter sometime tomorrow morning when I have the seventh day. I expect these numbers to be more of a drop than what I have here.

Here’s what I have so far:

*Heating/stove oil and Diesel fuel all show a drop of 1.2 cents a litre.

*Gasoline shows a drop of 2.8 cents a litre.

Market highlights

Saudi Arabia to reduce exports

Saudi Arabia didn’t come right out and say it on production cuts, but they did announce a 500,000 barrel a day reduction in exports.

     There is a difference...

      Now OPEC officials will discuss a possible cut in production of upwards of a million barrels a day starting in 2019 to offset what some are considering as an over-supply issue.

      Latest OPEC production figures show the group producing 155,000 barrels more in October month that helped offset Iranian cuts to exports by close on 50,000 barrels a month, signaling that Iran’s shortfall can be more than fulfilled in the oil markets.

Canadian dollar gets pounded

As oil sinks a little lower, the Canadian dollar has lost more ground to a strengthening U.S greenback, losing close on two cents in the last week.

      For every penny lost, consumers lose about 8/10ths of a cent at the pumps as a result making a drop at the pumps a little less than what it should be had the currencies been at par.

Lower oil could exacerbate oil availability down the road

While oil prices sink lower, the prospects of supply to the markets starts to come into question as revenues fall off.

      Venezuelan production had already dropped off to 1.2 million barrels a day from over two million a few years back, and is widely expected to drop below a million a day as economic and political woes weigh on the South American country. If oil slips further, problems with keeping wells producing start to show and wells begin to shut down, so much so that markets may face a shortfall in the long term

       The problem already happened between 2014 as oil prices sank amidst world over-supply, and prices only began a recovery as soon as the over-supply was drawn down. Between a possible OPEC cuts in 2019, faultering production in Venezuela and a possible slowing of U.S domestic growth as a result of lower prices, oil itself may not be on such a slippery slope as some may think.

That’s it for this week!

Regards,

George Murphy

Twitter: @GeorgeMurphyOil

Price changes for Thursday, November 8th, 2018

Hi to all,

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

*Heating and stove oils to drop by 3 cents a litre. (3.5 cents)

*Diesel fuel to drop by 3.1 cents a litre (3.3 cents), and...

*Gasoline to drop by 3.8 cents a litre (3.6 cents).

            This is the last week where I will have seven day data ahead of price changes to be put out every Tuesday evening.

            This is the dataset that cost a pricey $635 US a month, the cheapest that I have found. Mind you, they have since offered to discount it 25%. Still pricey!

            Instead, as the second set of data I found is free, I will publish data based on six days data to be published on a Tuesday with a reconciliation for seven days of data later by noon Wednesday via Twitter and Facebook.

           Data basically comes a day later than what I have previously had.

           This week’s price changes shows how close the data can be based on seven days data with six day data in parentheses ().

            Where there are days that we have a “Monday” holiday, it may go on a five-day report with a follow-up based on six days.

             It’s probably the best I can do at this point, but I do hope it works out for those who avail of the information.

             We’ll know more on the accuracy in the next two weeks or so as I can compare price change data with that which will be the actual change that occurs.

Regards, and thanks for your patience!

George Murphy

Twitter @GeorgeMurphyOil