Hi to all,
Here’s what I have
for this week’s price changes. Keep in mind that the distillate fuels are
subject to winter blending, so they may be off slightly.
*Heating and stove
oils to drop by 2.4 cents a litre.
*Diesel fuel to
drop by 2.5 cents a litre, and...
*Gasoline to drop
by 8/10ths of a cent a litre.
These numbers will
be adjusted again via social media Wednesday morning when the last data-point
becomes available.
Market highlights
Alberta and OPEC
both to cut production
In what some may
think to be an unusual move, Alberta will do as OPEC countries have long been
doing to support prices from time to time. For the first time I can think of,
Alberta will cut back oil production by 325,000 barrels a day in order to try
and support prices for their land-locked oil resources.
By limiting production by 8.5 percent, the Notley government is hoping that the
price for Alberta crude oils will rise, thus increasing their revenue take and
helping to keep Alberta fields working.
Meanwhile, in the Middle East, and after the G20 meetings in Argentina, both
Saudi Arabia, other OPEC members and Russia are talking about an initial
production cut of 1.3 million barrels a day. But latest talk out of the Middle
East is signaling that cut may be reduced to a million barrels a day as Alberta
has taken over 325,000 thus making OPEC think twice about cuts that were to be
brought in.
We’ll find out later this week exactly how much OPEC will cut production by
later this week when OPEC meets again in Vienna.
US-China trade war
ceasefire
The US and China
have signaled their intent to call a 90 day ceasefire in their trade war in an
attempt to reach an agreement on the imposition of tariffs on goods
manufactured in China.
The Chinese were countering the tariff call by the US with a call for a twenty
five percent tariff on imports of U.S crude. While oil increased in price just
a little, it has since flattened out on doubts an agreement could be reached.
Concerns over oil prices arose with the possibility of Chinese economic
troubles had tariffs been placed on Chinese goods and oil fell appreciably as a
result. Mind you, Trump has said that placing major tariffs on China remained a
possibility if the US doesn’t achieve what it believes to be a fair deal on
trade and
Global economic
slowdown on the way?
Concerns over a
global economic slowdown continues to weigh against oil again today as some
companies continue to report lower than expected earnings.
The
issues of lower earnings seem to rise every few days in the markets and that
weighs against oil as demand is seen to possibly slip with any worldwide
slowdown.
Crude averages for
this year so far
Merrill Lynch is
reporting that the average price for Brent so far this year is $72.80 a barrel,
while West Texas Intermediate coming in at $66.10 a barrel US.
Brent
has averaged $72.86 a barrel between April 1st and the end of
October according to my numbers.
Pretty
close!
The
province has said it thinks Brent will average $74 US a barrel for this fiscal
year.
That’s it for this
week!
Regards,
George Murphy
Twitter
@GeorgeMurphyOil
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