Price changes for Thursday, February 28th, 2019

Hi to all,

Here’s what I have for this week’s price changes. Keep in mind that winter blending may throw off distillate prices a little:

*Heating and stove oils show an increase of 1/10^th of a cent a litre.

*Diesel fuel shows an increase of 3/10ths of a cent a litre, and...

*Gasoline shows an increase of two cents a litre.

Market highlights

Trump tweet sends oil downwards-Monday

It’s not often you see it, but when the U.S president sees oil rise, and then reacts, it’s amazing to see the markets react as much as they did on Monday.

     Trump tweeted:  “Oil prices getting too high. OPEC, please relax and take it easy. World cannot take a price hike-Fragile”

     Oil prices retreated on Monday, losing over $2 US according to US Energy Information Administration data.

 

Added value to heavy crude could benefit this province

A story I read online on Oilprice.com talking about Venezuela’s heavy crude has me thinking...

    The story at the supplied link talks about a possible shortage of heavy crude oils on the markets that could potentially run short as a result of sanctions and political strife in Venezuela.

     But the article also talks about infrastructure issues here particularly in central/western Canada, but not mention the situation here off the coast of Newfoundland and Labrador.

     We’ve got a fair bit of heavy crude off our shores now.

     But remember, with sanctions against Iran, OPEC production cuts and possibly further disruptions coming from Venezuela and a lack of infrastructure to get it out of central Canada, this province may be in line to benefit by the shortage.

     I’ll keep an eye to further moves in heavies...

U.S inventories

U.S crude inventories were up over the last week ending February 15^th with crude adding 3.7 million barrels.

     Inventories of distillate and gasoline both dropped by 1.5 million barrels on 85.9 percent capacity as refineries remained partially shut down for routine maintenance to make ready for spring production of gasoline.

     U.S domestic production added another 100,000 barrels bringing U.S domestic production to an even 12 million barrels a day.

That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, February 21st, 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, so the distillate numbers may be off somewhat.

*Heating and stove oils show an increase of 3.4 cents a litre.

*Diesel fuel shows an increase of 3.7 cents a litre, and...

*Gasoline shows an increase of 4.3 cents a litre.

Market highlights

Saudi Arabia expands production...cuts

Surprise!

     OPEC member Saudi Arabia announced last week that it would add another 500,000 barrels a day to cuts already made with other OPEC and non-OPEC nations in a move designed to help support oil prices.

     The cuts would start in March and add to the 1.3 million barrel a day cut agreed to by those enations in November. The surprise announcement helped boost oil prices another $3 US over the past week.

Refiner production down

Ironic as it may be, just as prices for gasoline start to ramp up ahead of the spring run-up to the summer driving season, refiners are shutting down for maintenance and to do the switch from mostly distillate production to gasoline.

     It may be February, but with a 45 day delivery time from the oil patch to consumer, there’s really not that much time before we enter spring, or at least south of the border anyway.

     With speculators eying the summer driving season, it stands to reason the same time every year, that a run-up in gasoline spot prices is also quick to follow.

Eye on Venezuela

US sanctioning of Venezuelan imports of crude haven’t had too much effect on Venezuelan production...yet.

      January production of crude oil was measured at 1.1 million barrels a day, down 59,000 barrels from the month previous, but down almost thirty percentage points for the same time period a year earlier.

      US sanctions have helped support the price of West Texas Intermediate as any sour crude from Venezuela has resulted in replacement from American and other sources.

      I’ll be keeping an eye for any other signs of disruptions here as any may cause further increases in price if supply can’t be met through other sources.

That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, February 14th, 2019

Hi to all,

Here’s what I have for price changes for this week, all data in:

Keep in mind winter blending, which may throw off the distillate numbers a little!

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

*Gasoline shows an increase of 1.7 cents a litre at the pumps.

Market highlights

Saudi Arabia to add to cuts

In an effort to support prices and indeed increase them, Saudi Arabia announced yesterday that it would add more cuts starting in March.

     While previous cuts of 800,000 barrels have already started to hit the markets, the additional cuts will bring Saudi output of crude oil down to 9.8 million barrels a day.

      Saudi Arabia is possibly trying to reach a balanced budget point for the year, but according to the International Monetary Fund, they need oil priced at $80 US to do it.

     Keeping a close eye to this piece of news as the cuts come immediately leading into the spring run-up as we head to the summer driving season.

U.S and China trade talks on again

Trade talks are on again between the U.S and China as we quickly approach their own March 1^st deadline.

     Speculators are optimistic that if tariffs are still in place by that time, then the likelihood of a further slowdown in the Chinese economy will occur, thus driving the price of oil down again as a result of lower demand.

EIA predicts new production in the U.S

The U.S Energy Information Administration predicts that U.S domestic production will hit 13.2 million barrels a day through the year 2020, if the present trend holds out and oil prices stay steady or increase further.

     U.S domestic growth has increased to the point that it is now the highest it has been in recent memory. Since 2008, oil production in the U.S has increased almost six million barrels a day.

That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, February 7th, 2019

Hi to all,

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

*Heating and stove oils show an increase of 2/10ths of a cent a litre.

*Diesel fuel shows an increase of 3/10ths of a cent, and...

*Gasoline shows an increase of 5/10ths of a cent a litre.

**Keep in mind that winter blending may throw off the distillate numbers somewhat.

Market highlights

Keep watching Venezuela

The political situation in Venezuela is being watched closely as political protests continue. But the real possibility of revolution in Venezuela still weighs on the markets, even though sanctioning of Venezuelan crude has been put in place.

      While sanctioning keeps their crude out of the U.S, it also means that the U.S has to look for other sources of crude oil to replace supplies lost from the South American country.

      U.S domestic production is believed to be one real possibility as crude prices or West Texas Intermediate have risen more noticeably than Brent. Brent prices, in the meantime, have risen in recent weeks also, but are probably more influenced by upwards pressure from OPEC Plus (OPEC and non-OPEC producers) cuts that have nnot really taken a full bight of the markets as of yet.

What’s holding oil back?

With all the word on a possible drop in exports from Venezuela, it’s the weight of disturbing economic news that also permeates the markets.

     Economic growth just about stagnated in the Eurozone during January month, sending ripples through the markets and signifying that all may not be well with projected demand that would help bolster prices.

     It was a slowdown in the Chinese economy last month, but any signals from Europe would only bolster the thought that any slowdown is underway.

Electric vehicles to impact oil?

I remember a number of years ago, King Fahd I think it was, said that the Kingdom had fifty years more to sell oil and make whatever it could from the riches it had been given.

     His prophecy may come true.

     With a caveat about rare earth minerals, the Bank of America has stated that the advent of the electric vehicle will kill overall demand growth for crude oil by the year 2030.

     That has huge implications as rare earth metals such a lithium and cobalt, predominant metals in electric vehicle batteries are only recently being explored. Countries in Central America have the most promise, says the bank, and if more is found, then the predicted growth in demand may indeed falter. Oil demand itself may peak amidst predictions of a collapse in demand growth, and may in fact drop off again as other alternatives besides crude oil become readily available to world consumers.

That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil