Hi to all,
Here’s what I have for this week’s price changes.
Distillate prices are subject to “winter blending” so they could potentially be off slightly.
*Heating and stove oils to increase by 1.9 cents a litre.
*Diesel fuel to increase by 2.1 cents a litre, and...
*Gasoline to increase by just 6/10ths of a cent a litre.
Oil rises for the first week of 2019
It is usual for market speculators to look at the first five days of any New Year and make predictions that the year in question will be a good one.
If that is the case, then the first five days of trading this year may be an indicator that oil prices will rebound somewhat, probably to within OPEC’s target range of $70 US a barrel.
With oil rising for the first five days, market speculators have sensed that OPEC’s round of cuts will soon take hold and are seeing the December cut in production as being positive for rising oil.
Markets responded positively to news that OPEC members successfully lowered production by 530,000 barrels a day for the month of December.
Canadian dollar rises
The Canadian dollar increased roughly three cents against the U.S greenback over the last nine days with the dollar trading at $1.3638U.S on the 28th of December to today’s $1.3293.
With the rise in the dollar, consumers gained a little with refined product prices. For each penny the Canadian dollar gains, the rough equivalent of close on three quarters to a full penny is saved by consumers.
U.S inventories tell a story
U.S refiners may be looking at adding more refiner capacity just to “soak up” added oil inventories in recent weeks.
With crude inventories expanding to 441 million barrels in the U.S, almost eight percentage points over their own five year averages, refiners have turned up production to try to bring the crude levels down.
But are they succeeding in supporting prices?
While oil prices have increased, West Texas Intermediate prices have not increased at the same rate as Brent prices, with the differential between the two expanding by $4 US with Brent rising faster than WTI.
Refiners are left in a quandary, that if they can’t export enough to the outside, then they are left to try to refine it to remove it from inventory.
The problem they have this week in the numbers is that, while crude inventories remained steady, gasoline showed a massive gain of 6.9 million barrels, while distillates showed an increase of 9.5 million barrels. Another such build as this week showed, anything else added may complicate inventories as a consideration to the sell price to the end user in spite of rising oil, and that squeezes margins.
Refiner capacity was recorded at 97.2 percent with the data for the week up to December 28th.
U.S domestic oil production also remained steady through the Christmas holidays at 11.7 million barrels a day.
That’s it for this week!