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Tuesday, January 29, 2019

Price changes for Thursday, January 31st, 2019

Hi to all,

Here’s what I have for this week’s price changes. Keep in mind that winter blending is still in effect and that may throw off the distillate numbers slightly!

*Heating and stove oil to drop by 1.9 cents a litre.

*Diesel fuel to drop by 1.5 cents a litre, and...

*Gasoline to drop by 3.5 cents a litre.

Markets were topsy-turvy this past week as weak economic data was mixed with inventory numbers that sent speculators wondering where it would all end.

     Inventory data this past Thursday suggest that demand for gasoline is off for now, but margins are still good for distillate fuels like heating, stove oil and diesel. With those fuels still in a high demand phase with colder weather in central regions of North America, refiners are still operating at just shy of 93 percent capacity to take advantage of the situation.

     Crude oil is still also gaining inventory, with crude adding eight million barrels and gasoline adding another 4.1 million to an ever expanding inventory ahead of the spring run-up in prices.

     In spite of colder weather, particularly in the central US and Canada, distillate inventories only dropped 600,000 barrels on the week.

     In the meantime, big troubles may be on the way for Venezuela politically, but oil increased today as the U.S placed sanctions on the Venezuelan state-owned oil company Petroleos de Venezuela SA.

     Increasing violence and tensions are mounting, adding the possibility that supply disruptions could result if a shutdown to the oil industry occurs.

     Venezuelan production has dropped to close to 1.1 million barrels a day, and could drop further if violence ensues in the South American country.

     Still no word from the federal Competition Bureau in Ottawa as I filed a complaint regarding the sale of Ultramar gas stations to Irving some time back.

     Places such as Conception Bay South have lost the competition between companies that I believe is costing them lower prices at the pumps as of late. And with the added closure of a Canadian Tire gas bar here beside the Ultramar station , consumers here are pretty much left with three of the larger companies who’s prices have crept up and left one company in more than a dominant position, I believe, in the CBS market particularly.

     The loss of the ValueMax program along the shore, not to mention the benefits of Canadian Tire has meant that consumers don’t have as much say on lower prices. CBS gas station prices are now a few pennies above most prices in St. John’s, a condition that hasn’t happened in years.

      Prices here are still somewhat below the regulated maximum, but not as much as they used to be. I’ll let you know if I do hear anything back...

That’s it for this week!


George Murphy

Twitter @GeorgeMurphyOil

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