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Tuesday, December 17, 2019

Price changes for Thursday, December 19th, 2019


Hi to all,



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



*Heating, stove oil and Diesel fuel all show an increase of 1.2 cents a litre.

*Gasoline shows an increase of 2/10ths of a cent per litre.



Market highlights



Colder US weather moves distillates up

All of a sudden, it’s cold outside.

     With colder weather suddenly gripping the U.S northeast, market traders have seen an increase in demand for distillate fuels like heating and stove oils, and that has also played into a slight increase coming to diesel fuel prices as well.

     Spot prices for distillate fuels have moved up in lock step with oil prices through this pricing session, and as the weather continues to be colder heading into the depths of winter, we may not see upwards pricing pressures drop anytime soon.

      Markets tend to change their focus to distillates this time of year as colder weather spurs demand for heating, stove oil and diesel fuel.



US-China trade deal done?

Some movement in trade talks has also spurred oil prices upwards this week as speculation surrounds the markets with word that the US has suspended fifty percent of tariffs placed on Chinese goods and services back in September in exchange for China buying all American produced agricultural products.

     In addition, the U.S will delay implementation of additional tariffs on China that would have taken effect on December 15th.

     China has also dropped additional tariffs on US manufactured cars and other agricultural products as there seems to be a “truce” called in what is known as “Phase one”.

     “Phase Two” talks will involve deeper talks to remove remaining tariffs and are said to be starting “immediately”.

      Estimates amongst traders say the economic damage caused by the tariff disagreement between the two countries ranges anywhere between $160 and $250 billion dollars, not to mention the damage caused by the slowdown in the world economy.

     Oil turned slightly higher this week as some hope is showing for the recovery of the world economy through to the end of 2020.



US inventories:EIA

The latest US inventory report has crude oil supplies adding 800,000 barrels ahile a surprise gain showed for distillates, adding 4.1 million barrels.

     Gasoline supplies increased by 5.4 million barrels with refiner capacity measured at 90.6 percent.

      US domestic crude oil production was recorded at 12.8 million barrels a day, down 100,000 from the previous week.



That’s it for this week!



Regards and Merry Christmas!



George Murphy

Twitter @GeorgeMurphyOil  

Tuesday, December 10, 2019

Price changes for Thursday, December 12th, 2019


Hi to all,

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



*Heating and stove oil shows a slight increase of a half penny a litre.

*Diesel shows an increase of 6/10ths of a cent a litre, and...

*Gasoline shows no change to prices this week.



Market highlights



US-China trade deal close?

As a possible sign of an agreement between the US and China in their trade dispute, the US has reportedly delayed the imposition of further tariffs on Chinese goods and services as a gesture of good will as a final deal is said to be close at hand.

     New tariffs from the Trump government were due to kick in December 15th as a measure to get the Chinese to bend to economic pressure.

     Oil prices rose slightly in the face of anticipated higher demand for oil and refined products.



Propane price sticker shock

Last week’s strong upwards movement of propane prices was probably a shock to some consumers in the province as prices increased by over 14 cents per litre.

     As far as I know, spot prices in Sarnia, Ontario rose sharply as a result of a strike by CN Railway that curtailed deliveries of propane supplies from Western Canada, thus driving up prices for any available stock.

     As the strike is now over, I fully expect to see prices retreat to more normal levels in the coming couple of days.



US Inventories

The US Energy Information Administration has released its latest inventory data showing that crude supplies dropped 4.9 million barrels while gasoline supplies grew by 3.4 million barrels.

     Distillate supplies increased 3.1 million barrels on a reported capacity of 91.9 percent a s refineries returned back from maintenance programs and drew on oil stocks.

     Domestic production was reported at 12.9 million barrels a day.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil  

Tuesday, December 03, 2019

Price changes for Thursday, December 5th, 2019


Hi to all,



Due to unpublished data through the U.S Thanksgiving holiday, I’m running on an incomplete dataset this week. However, I do have something to go on!



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



*Heating, stove oil and Diesel fuel all show a drop of 8/10ths of a cent a litre, and...

*Gasoline shows a drop of 1.8 cents a litre.



Market highlights



Markets await OPEC moves

Markets were showing a slight increase at the start of the session last Wednesday as OPEC discussion had some pretty heavy talk over the prospects of an extended cut in production ahead of the December 5th and 6th meetings.

     However, markets showed an almost 5 percent drop in oil prices as speculators saw initial numbers that showed OPEC and other non-OPEC members had not stuck to their agreed-upon production cuts. Oil gained some lost ground on Monday as traders again saw hope of cuts to production and even an extension and deepening of cuts to help support prices.

     For now, it’s all eyes on OPEC meetings later this week.



U.S inventory data

U.S inventory data again showed a build in U.S crude stocks, bringing with it sure signs that a glut is beginning to tell in the U.S as sales drop.

     EIA data shows that crude stocks increased by 1.6 million barrels, while gasoline inventories increased by 5.1 million barrels, a sign that demand may be waning in spite of the U.S thanksgiving Day holiday. New data will be released Thursday that may give me a better lay of the land on demand.

     Distillate stocks also increased by 700,000 barrels as refiner capacity was  reported at 89.3 percent.

     U.S domestic production also was recorded  at 12.9 million barrels a day.



IEA warns of global glut in supply

The International Energy Agency is again warning of a growing glut of world oil supplies as non-OPEC producers add more production to world supplies.

     The IEA is projecting that world supplies will increase by an estimated 2.3 million barrels a day, while projected demand is forecast to grow by a mere 1.2 million barrels a day as the world economy slows.

     Again, according to the IEA, it may come down to what OPEC will do this week as any cut to production will have to be substantial in order to support oil prices, and that’s also not taking into consideration OPEC+ being able to stick to their self-imposed cuts.

      Traders are saying that, a failure for OPEC to act may lead to another sell-off in oil as the glut looms.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil  

Tuesday, November 26, 2019

Price changes for Thursday, November 28th, 2019


Hi to all,



Been at this for twenty three years as of last week. Hard to believe...



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



*Heating, stove oil and Diesel fuel all show an increase of 4/10ths of a cent a litre.

*Gasoline shows an increase of 2.1 cents a litre.



Market highlights



OPEC meeting is set for next week

OPEC and non-OPEC members will meet December 5th and 6th to discuss a possible additional cut to oil production in an effort to cut back on a world glut of oil and to help support prices.

     OPEC members will start with their own meeting on the 5th, followed by a meeting on the 6th where they will be joined by non-OPEC Ministers.

     It is the 177th time for OPEC to meet and just the seventh time for non-OPEC countries.

     Meetings to discuss deeper cuts to OPEC’s self imposed cuts of 1.2 million barrels a day have played on the markets the last few weeks, with prices rising higher in the last two weeks as the meetings drew near.



US Thanksgiving Day drives demand

The U.S Thanksgiving Day holiday has done what some have feared the last few weeks: drive up prices to consumers.

     With an anticipated increase in travel over the next few days, gasoline has risen as a result that will have some impact on overall supply. But increases have been tempered somewhat by growing inventories with prices up, but not as sharply as other years.



US EIA inventory data

Latest news from the Energy Information Administration indicates that crude oil continues to build with inventories adding 1.4 million barrels for the ninth week out of ten.

     Gasoline inventories added 1.8 million barrels, while distillates dropped a million.

     Refiner capacity was recorded at 89.5 percent.

     US domestic output was steady at 12.8 million barrels a day.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil  

Tuesday, November 19, 2019

Price changes for Thursday, November 21st, 2019


Hi to all,



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



*Heating and stove oil show an increase of 3/10ths of a cent a litre.

*Diesel fuel shows an increase of 7/10ths of a cent a litre, and...

*Gasoline shows a drop of 3/10ths of a cent.



Market highlights



US and China on again-off again

The U.S and China just seem to not be able to agree to anything, and the agreement that speculators thought may be coming-is not-again.

     China is said to be wanting the US to roll back some tariffs with more due to hit December 15th, just less than four weeks away.

     Having said that, China is also thinking that they may be better off waiting to find out the results of the U.S impeachment hearings that are ongoing, so they can try their luck with different leadership.

     Oil initially showed increasing prices for this session, that is, until news broke of stalled talks and a watered down agreement.



Russia dropping out?

Saudi-led OPEC cuts to production, in concert with other oil producing nations, may be in trouble when OPEC meets to renew the production cut agreement next month in Vienna.

     Russia is said to be not there yet in agreement to a further cut in production should the topic of deepening the cuts to production come up. The present agreement runs until March of 2020, and Russia seems to agree to the same level as agreed last year, but OPEC wants to reach a new agreement to carry on with deeper cuts this year.

     Oil started a retreat Monday on the news.

     OPEC meets December 5th, just under three weeks away.



US inventories

The latest report on the state of US inventories is out.

     Crude supplies grew for the eighth week out of nine as inventories added 2.2 million barrels to a growing US supply.

     Gasoline also increase 1.9 million barrels while distillates dropped by 2.5 million barrels.

     Refiner capacity was reported at 87.8 percent and US domestic output was up to 12.8 million barrels a day.



Interesting debate in the House of Assembly

The House of Assembly will debate a government motion about the placement and use of electric vehicle charging stations in the House on Wednesday as increased use of electric vehicles continues to draw interest from consumers.

     The motion introduced by MHA Perry Trimper, who himself is a user of an electric vehicle, will centre on an experimental program for placing charging stations in predominant locations along the Trans Canada Highway to generate interest in the use of electric vehicles as an alternative transportation choice.

      Interesting as it is and just as a comparison, I worked out preliminary numbers on an imaginary trip to Grand Falls-Winsor using gas and then comparing it to electricity.

      What cost me $70 in a fill-up to make it there would cost me about $7 in electricity.

      Not bad...

      The debate in the House starts at 3PM.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil  

Tuesday, November 12, 2019

Price changes for Thursday, November 14th, 2019


Hi to all,



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

*Heating oil, stove oil and Diesel fuel all show no changes to prices.

*Gasoline shows a drop of 1.4 cents a litre.



Market highlights



US-China trade and tariffs stall the markets

US-China trade talks have stalled and markets are eagerly awaiting word, positive or negative- that may at least give them a sense of direction.

     Markets stalled late last week as President Donald Trump denied earlier thinking that a deal was close, saying instead that “Washington wasn’t going to sign any deal that wasn’t good for the US”. Trump is on record at the Economics Club of New York just today stating that if the US doesn’t get a deal it likes, then tariffs will go up”.

     The next round of tariffs are due to be applied to almost $155 billion in Chinese goods and services on December 15th.



Iran sanctions continue

Iran is finding it harder to sell its oil on the open market because of ongoing sanctions, but it is selling some.

     Iran is running out of storage space that could create further issues in the country as it may have to cut back production.

     Iranian production was reported at 2.2 million barrels a day last month, well down from May 2018 when production was measured at 3.8 million barrels a day. Sanctions have hit hard at Iran’s bottom line with it showing in recent news that Iran needs oil to hit $195 US a barrel for the finances of the country to show balanced books.



U.S inventories

US inventories may singularly be showing signs of a growing glut and a world slowdown in demand of oil if the trend continues much longer.

     Seven of eight of the last sets of inventory data have shown growing crude oil supplies, the latest data still showing crude supply grew by an added 7.9 million barrels last week.

     Gasoline supplied dropped 2.8 million barrels while distillate supplies dropped 600,000 barrels.

     Refiner capacity dropped back slightly to sit at 86 percentage points.

The next release of inventory data happens Thursday, a day later than the usual as a result of Remembrance Day.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil  

Tuesday, November 05, 2019

Price changes for Thursday, November 7th, 2019


Hi to all,



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



*Heating and stove oils show a drop of 1.6 cents a litre.

*Diesel fuel shows a drop of 1.5 cents a litre, and...

*Gasoline shows no change in price this week.



Market highlights



US-China trade optimism

The US and China are said to be close to an agreement that could lead to resolution of the trade dispute that has cost both countries an estimated $100 billion in tariffs and fines.

    China has been asking the US to remove some tariffs that were imposed by the US as late as September as a show of optimism that a deal can be reached going forward. They may do exactly that as a measure to have Chinese tariffs on oil dropped so the US can export more, thus supporting US oil prices.



OPEC+ still mulling production cut

OPEC and non-OPEC members are still playing with the idea of a production cut as their December meeting comes closer, but the spectre of sticking to those cuts remains as pervasive as ever.

     Russia, a participant in the cuts since January has reported that they produced almost 11.3 million barrels a day of oil last month, well ahead of their own production cut as agreed to with OPEC member nations.

      The present agreement is set to end in March, 2020.



Iran rattles nerves

Iran has announced that it has added another 1000 centrifuges to refine uranium  as Iran makes further moves away from the 2015 nuclear agreement.

     Iran wants sanctions to be removed so it can avoid further damage to its economy, and according to officials that say the sanctions have been unduly harsh on the oil exporting country.

     There may be something to that as analysts say that Iran needs oil to hot in excess of $190 a barrel US just to balance the books in 2020.



US inventories

US crude oil inventories increased in the week ending October 25th, adding 5.7 million barrels to crude oil inventories.

     Gasoline lost three million barrels, while distillates dipped a million barrels.

     Refiner capacity was measured at 87.7 percent, up slightly from the last report as some refineries came back online.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil  

Tuesday, October 29, 2019

Price changes for Thursday, October 31st, 2019


Hi to all,



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



*Heating and stove oil to increase by 6/10ths of a cent a litre.

*Diesel to increase by 3/10ths of a cent a litre, and...

*Gasoline shows an increase of 1.5 cents a litre.



Market highlights



Oil prices up

As oil prices have been going in recent months, any increase in oil prices is a celebration for some speculators at a time when there hasn’t been much to celebrate.

      Over the past week, oil prices have risen about $2 US a barrel as speculators  see hopeful signs that the US and China will see an end to their trade and tariff dispute.

      Stock markets have been mostly in record territory again as traders see an increase in demand for oil if trade barriers are lifted off China.



OPEC making moves

OPEC and non-OPEC member oil producers continue to dwell on production cuts as Saudi Arabia is said to be ready to do anything to support prices.

     Already Saudi Arabia has made a preliminary move of checking on production levels in OPEC member nations to make sure they have been complying to their side of production cuts before they formally announce measures or further cuts to production quotas

     Old habits die hard as OPEC members have often been cheating on their own quotas whenever they see a fiscal advantage as prices rise. In the meantime, compliance was itself pretty good in recent months and talk amongst members and non-OPEC members indicates some willingness to institute a further round of cuts.

     Just how much they will end up cutting remains open at this time.



US inventory data

The Energy Information Administration released its weekly report Wednesday that showed a 1.7 million barrel drop in crude stocks as well as a draw in gasoline inventories of 3.1 million barrels.

     Distillate supplies also saw a draw of 2.7 million barrels.

     Refiner capacity was recorded at 85.2 percent for the week as refiners continued maintenance programs.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil  

Tuesday, October 15, 2019

Price changes for Thursday, October 17th, 2019


Hi to all,



Due to the fact that I have not received data for Friday’s market numbers, numbers may be off slightly from the actual that may occur. Here’s what I have for this week’s price changes:



*Heating and stove oil shows an increase of a half cent (5/10ths) a litre.

*Diesel fuel shows an increase of 9/10ths of a cent per litre, and...

*Gasoline shows an increase of 1.5 cents a litre.



Market highlights



US-China trade deal

The US and China are reported to be close to an agreement on tariffs, but you’d hardly think that was true according to oil’s performance the past few days.

     Speculators are laying 50/50 odds of a signed agreement by the end of October that may (or may not) return trade between the two world economic powers back to something more normal.

     Oil markets responded positively on Thursday moving higher as speculators thought an increase in oil demand would result, but it didn’t last very long.

     Chewing into details, speculators found that there wasn’t much detail and that the four foundations of the trade war weren’t even touched. China also made no mention of the agreement and still wants to see December tariffs removed before they sign onto anything.



Iranian tanker attacked

Iran has claimed that one of its tankers was attacked by missiles on Friday that helped support oil prices as tensions continued to weigh on oil markets.

     However, the attacks didn’t raise prices as much as feared, but still showed that Middle East targets abound and risk premiums remain on crude oil anywhere from the Middle East.



IEA makes a cut to forecasted oil growth demand

Just last month the US EIA made projections on lower demand and this past week seemed to be “seconded” by the International Energy Agency (IEA) as they moved downwards their forecast for any growth in demand by another 100,000 barrels a day from an initial projected growth of 1.1 million barrels a day.

     No doubt that the lower forecast signals lower demand due to world economic conditions.



US inventories

The US Energy Information Administration released inventory data again Wednesday that showed another build in overall crude oil stocks.

     Inventories of crude oil increased by 2.9 million barrels while gasoline stocks dropped 1.2 million  barrels as refiner capacity was measured at 85.7 percent for the week as some refineries remained closed for winter maintenance.

     Distillate inventories dropped by 3.9 million barrels as colder weather increased demand for heating product.

     U.S domestic oil production was recorded at 12.6 million barrels last week, an increase of 200,000 barrels.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil  

Tuesday, October 08, 2019

Price changes for Thursday, October 10th, 2019


Hi to all,



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



*Heating and stove oil to drop by 1.2 cents a litre.

*Diesel fuel to drop by 1.3 cents a litre, and...

*Gasoline shows a drop of 8/10ths of a cent per litre.



Market highlights



U.S-China talks

Speculators remain skittish over the possibility of the U.S and China reaching a settlement in their trade dispute when talks resume again on Thursday.

     The U.S has blacklisted more Chinese companies from doing business within U.S borders which may throw another wrench into things.

     The 28 companies were blacklisted for alleged human rights violations. The week previous was with optimism that a deal would be reached with Chinese officials expressing remorse that a better deal couldn’t be reached, but they would sign what was presented up to this point.



US EIA revises oil price forecast lower

The United States Energy Information Administration revised its Short term Energy Outlook (STEO) lower from what was forecast just a month ago citing the world economy and a strong building of world oil inventories as we get closer to 2020.

     Brent prices were forecast to be $5 a barrel lower than the $63 U.S that was forecast just in early September, with Brent dropping to $57 a barrel U.S in 2020. As far as I can read in the report, it doesn’t take into account rising geo-political risk such as that resulting in a production disruption in Saudi Arabia three weeks ago.



U.S inventory report

The latest report shows more refinery facilities have shut down for annual winter maintenance as refinery capacity was reported down to 86.4 percent.

     Crude inventories gained as oil throughputs halted and stocks built as a result.

     Gasoline inventories dipped by 200,000 barrels while distillates dropped 2.4 million barrels.

     U.S domestic production of crude dropped 100,000 barrels to sit at 12.4 million barrels a day.





That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil  

Tuesday, October 01, 2019

Price changes for Thursday, October 3rd, 2019


Hi to all,



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



*Heating and stove oils to decrease by 2.6 cents a litre.

*Diesel to decrease by 2.4 cents a litre, and...

*Gasoline shows a drop of 1.6 cents a litre.



Market highlights



Saudi Arabia recovery continues

Saudi Arabian oil infrastructure continues to recover after attacks by drones and cruise missiles took 5.7 million barrels a day of production capacity offline.

     The outages briefly took oil prices close to $70 US a barrel before retreating to todays close below $60 US.

     Refined prices also increased to consumers, but with this week’s drop in prices, should come close to what they were previous to the attacks.

     Saudi Arabia has announced that oil infrastructure will be ready for full production again by the start of November, and indeed, some are reporting that Aramco, the Saudi Arabian oil company has already reached pre-attack output of 9.9 million barrels a day.
      But really...
      Put this in the perspective of an attack against Saudi infrastructure twenty years ago. 
      With U.S domestic production of 5.8 million barrels a day then as compared to 12.5 million barrels a day just last week, it shouldn't be a wonder why oil prices never hit the roof. That, and the advent of other alternative energies that simply weren't "commercial enough" as what they are today, like solar and wind, have woken up some to the possibility that oil finally has competition.
     If there's any warning there for "Big Oil" from this attack, it's simply that they had better find more secure fields in "secure and stable" countries if oil is to survive as viable. Price matters, and the fact that solar and wind potential exists worldwide simply has shown that an attack against Saudi infrastructure to raise oil prices simply won't do it. There was a lot more at stake with the speed of the repairs than just to bring oil back online.
     A lot more could have been lost than just market share.



World reserves

In the event of outages, it seems the world was prepared for the worst.

     According to the International Energy Agency, world stocks of oil on government oil reserves like the US strategic reserve, amounted to 1.5 billion barrels, while private industrial-owned reserves totaled 2.5 billion barrels.

     These amounts do not include pooled reserves and discovered fields that have been left untapped, or facilities that have been shut down due to price or oversupply.

     There’s plenty out there!



U.S inventories

US crude oil inventories posted another gain last week as the Energy Information Administration said stocks increased by 2.4 million barrels.

     Gasoline stocks gained 500,000 barrels while distillates dropped 300,000 barrels as colder weather prospects increased demand there and gasoline demand tapered down.

     Refinery capacity was recorded at 89.8 percent as refiners continued fall maintenance programs.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil  

Tuesday, September 24, 2019

Price changes for Thursday, September 26th, 2019


Hi to all,



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



*Heating and stove oils to increase by 3.1 cents a litre.

*Diesel fuel to increase by 2.9 cents a litre, and...

*Gasoline to increase by 2.4 cents a litre.



Market highlights



Aftermath of Saudi attacks

Markets continued to rise sharply as continuing disruptions in Saudi Arabian oil production continued to play in the markets.

     Initial reports indicated that 5.7 million barrels of daily production was knocked offline. As this weeks session continued, it appeared, at least by Saudi reports, that the damage was “easily repaired” and that full production of upwards of 12 million barrels a day would be available by December, with 5.7 million lost production to be back online by the start of November.

     Talks of returning quickly to full production started a slow retreat in oil that still supported my predicted increases in refined product prices for this week.

     Oil prices, along with refined product prices, continued to decline as Iran sent signals that it would be ready to make changes to the 2016 nuclear agreement in exchange for the lifting of some sanctions that have hurt Iran and its economy. That, combined with Saudi Arabia’s return to full production helped turn oil prices lower in the session.

     As a side note, Houthis rebels from Yemen are also making peace overtures that have made an uneasy peace in the Middle East in recent days, while at the U.N, Britain, France and Germany all pointed the accusing finger at Iran for the attacks.

     Numbers are showing a slow, gradual retreat for gasoline prices, but still show some support for distillate prices like heating, stove oil and diesel fuel.



U.S inventory data

The latest report from the U.S Energy Information Administration shows that 1.1 million barrels of crude was added to current supplies, while gasoline and distillates also showed gains in inventory.

     Gasoline gained 800,000 barrels while distillates increased 400,000 barrels.

     Refiner capacity was recorded at 91.1 percent as some refiners started Fall maintenance programs.

     U.S domestic production was reported at 12.4 million barrels a day.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil  
  

Tuesday, September 17, 2019

Price changes for Thursday, September 19th, 2019


Hi to all,



Here’s what I have for this week’s price changes in what has been one of the most remarkable weeks I’ve seen in oil in a very long time!



*Heating and stove oil shows an increase of 1.3 cents a litre.

*Diesel fuel shows an increase of 1.6 cents a litre, and...

*Gasoline shows a DROP of one cent.





Market highlights



It’s all Saudi Arabia and Iran folks!

Attacks against the Abqaiq production facility and the Khurais oil field were successful in knocking out 5.7 million barrels of production out of 9.8 million that was online.

     The Saudi’s have almost 12 million barrels a day of processing at its fingertips that was already shut down and mothballed because of OPEC cuts. Surprisingly, the cut to production has not affected fuel prices as much as was first thought they would be.

     While important infrastructure is already well on its way to returning to normal, the Saudi’s are saying by the start of November before capacity is back to the original 12 million barrels of production a day. Some of that was already in mothball as a result of past production cuts.

     UN investigators are said to be on the way to investigate the damage to Saudi facilities, and that itself may be enough to dissuade the U.S from taking any preliminary action or military intervention with Iran, who are being blamed by the U.S for the attacks.

     Houthi from Yemen have claimed responsibility and promised in a statement yesterday that more attacks are imminent, so, we may not be out of the woods on this situation yet.



Local effect

As regards to what NL consumers will see this week and next is probably all going to be determined by market factors over the next week. Projections are panning out a little lower than forecast a day ago. Right now, numbers are showing possible increases right across the board of 2.3 for heating, 1.8 on Diesel and 2.2 up for gasoline as a result of elevated spot prices.

     Hopefully, with any retreat in oil and refined product prices the next couple of days, these projections will turn around and show a drop in prices rather than any possible increase to consumers!



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil 

Tuesday, September 10, 2019

Price changes for Thursday, September 12th, 2019


Hi to all,



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



*Heating and stove oils show an increase of 2.5 cents a litre.

*Diesel fuel shows an increase of 1.8 cents a litre, and...

*Gasoline shows an increase of 2/10ths of a cent per litre.



Market highlights



Peak oil here?

“Not likely” says I...

      While market speculators fret over the latest news on US domestic production growth and the latest rig counts, much is being said that the markets have hit peak production and demand is still rising. Others say we’ll hit peak production in the late 2020’s.

      And while there may be some evidence that US domestic production has indeed stalled for the moment, it doesn’t mean that we have hit key peak production in the face of rising demand for oil.

      The facts are simple.

      The only thing that is holding back on future increases in production are the fact that West Texas Intermediate prices are held down because no one wants to get pumping oil and not make a dollar at it. Production costs are higher than elsewhere, and Chinese tariffs on U.S exports to China simply don’t help. A low price for WTI isn’t good if you’re trying to generate interest in U.S shale reserves.

      It’s no wonder Baker Hughes has reported a decline in rigs operating south of the border in August as compared to July. There were 926 rigs operating against the July figure of 955, and well down from 1050 in August 2018.

      Brent prices have risen slightly as a result of lower production costs, particularly for Middle East crudes, all in the face of self-imposed production quotas.

      My best guess here is that this is at best a temporary slowdown as rising prices will bring domestic production up again as more get back into the markets.



EIA releases “STEO”: Short Term Energy Outlook

In a monthly update, the US Energy Information Administration has released its outlook on both West Texas and Brent crude oil for 2020.

     West Texas Intermediate prices are projected to average $56.31 US a barrel for 2019 and stay steady at $56.50 US for the rest of 2020, while Brent prices will average $63.39 US a barrel for the remainder of 2019 and then average $62 US a barrel in 2020.

     And on another note, the US EIA predicts domestic oil production to grow to 13.2 million barrels a day in 2020 from this year’s average of 12.2 million a day so far in 2019.



US EIA inventories

The Energy Information Administration released its latest inventory data last Thursday, a day later than usual as a result of the Labour Day holiday.

     Crude supplies dropped 4.8 million barrels, while gasoline also showed a drop of 2.4 million barrels.

     Distillate inventories were also down, but by 2.5 million barrels on 94.8 percent refiner capacity.

     US domestic production was set at 12.4 million barrels a day for the week ending August 30th.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil 

Tuesday, September 03, 2019

Price changes for Thursday, September 5th, 2019


Hi to all,



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



*Heating and stove oils show an increase of 8/10ths of a cent a litre.

*Diesel shows an increase of 7/10ths of a cent, and...

*Gasoline shows a drop of 1.6 cents a litre.



Market highlights



U.S-China tariff dispute heats up

The U.S and China trade dispute has entered a new cycle.

This week, the U.S started adding another round of tariffs on Chinese goods with the promise of more tariffs to come December 15th. That has added concerns amongst traders that there will be a drop in crude demand in China as the Asian country faces a downturn in economic output to their largest trading partner.

     China was quick to respond.

     China also reacted by placing a 10 percent tariff on any U.S oil imports into China, throwing U.S producers offline and affecting U.S exports of crude.

      The Chinese have other places to but crude as most Middle East producers are shopping their wares to any nation that will take their supply.

     Brent crude prices were mainly supported, while West Texas Intermediate prices fell on the news, stalling U.S domestic growth the past few days since China placed tariffs on U.S crude.



End of summer

The summer driving season has come to an official end with the start of the school year now underway.

     Speculators are now placing their bids on the distillate group of fuels while gasoline has started to slide somewhat from summer highs.

     Consumers are at a disadvantage this year as spot prices for heating oils have not dropped appreciably from last winter’s highs, still ten cents a litre lower than last winter, but 13 cents higher than August of 2017 and the lead-up to winter. 
     On average, prices have crept up by ten cents a litre over the intervening winter months, so I expect to see heating oil prices to increase into the winter buying season.

     All oil price and distillate inventory dependent, of course.



U.S EIA inventories

The latest inventory report is out from the Energy Information Administration.

Wednesday’s inventories showed a draw-down of ten million barrels of crude , while gasoline and distillate fuels showed a drop of 2.1 million barrels each.

       Crude supplies are at the average level recorded over the last five years.

       Refiner capacity was recorded at 95.2 percent, up from the week previous, and U.S domestic production grew last week adding 200,000 barrels to sit at 12.5 million barrels a day.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil  

Tuesday, August 13, 2019

Price changes for Thursday, August 15th, 2019


Hi to all,



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



*Heating and stove oil to drop by 2.2 cents a litre.

*Diesel fuel to drop by 2.3 cents a litre, and...

*Gasoline to drop by 4.1 cents a litre.



Market highlights



US-China tariff argument

Everyone has been waiting for some sort of break in the trade and tariff war between the US and China.

     The U.S blinked today...

     The U.S Trade Representative office announced today that it would hold back on the placement of tariffs on some ten percent of Chinese goods that includes everything from electronics like laptops and cellular devices.

     Other goods, like toys, will not see any tariffs added until December 15th, which effectively means well after goods are shipped from China ahead of the Christmas season.

     China had been pondering cutting off sales of US shale oil to add another dimension to the tariff and trade war.

      Both the US and China have agreed to terms to begin talks again in two weeks time.



US inventories surprise

Wednesday last week saw the release of inventory data from the US Energy Information Administration that held a surprise for some expecting a draw on supplies.

     US crude inventories increased last week by 2.4 million barrels, while gasoline inventories also went into positive territory, adding 4.4 million barrels.

     Distillate inventories were also up, adding 1.5 million barrels.

     Refiner capacity was recorded at 96.4 percent, the highest of the summer season.

     Those factors helped drop oil and refined product prices lower in the past week before Wednesday’s rebound in crude prices.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil