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
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