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Tuesday, July 30, 2019

Price changes for Thursday, August 1st, 2019



Hi to all,



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



*Heating and stove oils to increase by 8/10ths of a cent a litre.

*Diesel fuel to increase by 1.5 cents, and...

*Gasoline shows an increase of a penny a litre.



Market highlights

US inventories

US crude inventories took a major hit last week as crude supplies from the Gulf of Mexico were cut off with the disruption showing up in the data.

     Crude inventories dropped 10.8 million barrels while gasoline was down marginally by 200,000 barrels.

     Distillate inventories were up by 600,000 barrels on 93.1 percent refiner capacity.

     US domestic production dropped the same week with production recorded at 11.3 million barrels a day, possibly as a result of rig shutdowns throughout the Gulf of Mexico region as Hurricane Barry passed through. I fully expect those numbers to return to normal in the next inventory report Wednesday.



US-China trade and tariff talks on again

World oil prices increased slightly this past week as negotiators from both sides seek to end the impasse in trade talks between the US and China. Oil prices rose close on $2 US Brent as both sides are anxious to reach an agreement that would see China tariffs lifted.

     Still, the spectre of a slowing world economy and troubling stats out of China showing a slowdown there taking hold, held back prices from taking off as future oil demand was seen to be a factor.



US economic slowdown?

In the meantime, according to a Bloomberg story, the US is starting to show signs of a slowdown that could also start to play its part in lowering of demand and oil prices.

     Figures from the last quarter show US growth down to 2.1 percentage points from the first quarter’s 3.1 percent as the US Federal Reserve considers a rate cut to help bolster a possible stall in the US economy.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil  

Tuesday, July 23, 2019

Price changes for Thursday, July 25th, 2019


Hi to all,



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



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

*Diesel shows a retreat of 3.1 cents a litre, and...

*Gasoline shows a drop of 4.3 cents a litre.



Market highlights



US and Iran standoff?

Makes you wonder sometimes whether the US-Iran standoff over sanctions and the nuclear production deal are really enough to spur higher oil prices. Even as tensions rise, oil prices have not reacted in their usual manner as in the past with a knee-jerk rise in prices.

     I’ve wondered about this before and can really only attribute this “phenomenon” as to rising US domestic output of oil.

     Keeping in mind that the US has increased production by 1.4 million barrels in the last year alone (12.3million from 10.9 million), one can only imagine the growth rate should something sinister happen in the Straits of Hormuz and the Gulf of Oman that may temporarily disrupt shipping access points.

     But when you consider other factors such as a worldwide economic slowdown, dropping demand as predicted by the International Energy Agency, a steady but modest 1.1 million barrel a day output from Venezuela and the ongoing trade dispute between the US and China, you can be excused for feeling sceptical.



US EIA inventories

US supplies of crude oil dropped by 3.1 million barrels of oil, but inventories of gasoline showed a positive increase of 3.6 million barrels.

     Distillate supplies also increased by 5.7 million barrels, allowing the retreat of refined product prices.

      Refiner capacity was recorded at 94.4 percent.



That’s it for this week!



Regards,



George Murphy

Twitter: @GeorgeMurphyOil

Tuesday, July 16, 2019

Price changes for Thursday, July 18th, 2019


Hi to all,



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



*Heating and stove oils to increase by 2.5 cents a litre.

*Diesel shows an increase of 2.4 cents a litre, and...

*Gasoline shows an increase of 1.4 cents a litre.



Market highlights



US inventories take a beating

The EIA (Energy Information Administration) released it’s latest inventory report which showed oil inventories continuing to drop, this week by 9.5 million barrels.

     Gasoline dipped another 1.5 million, while distillate inventories added 3.7 million barrels.

     Refiner capacity was recorded at 94.7 percent.

     U.S domestic production hit 12.3 million barrels a day, 1.4 million barrels over the same period last year, the numbers showing how much effect OPEC cuts are having since the same timeframe.



Hurricane Barry

Barry blew ashore, causing some consternation last week as US domestic production in the Gulf of Mexico was shut down for a few days. With no damage reported in the Gulf as of Monday, production is getting back in gear, at least until the next storm bears down on the area.

      Gas prices, as well as other refined prices, increased for a few days as the storm was thought to gain strength enough where supplies may be curtailed. But that didn’t happen as in other years where concerns about the landing point of the storm was thought to have been close to the area where major centres of refining occur along the Texas-Louisiana border.



NL Hydro looking for a rate increase?

NL Hydro is again looking at the Public Utilities Board for an increase in rates as they think that oil prices will range $106 Canadian a barrel, bringing consumers an increase of 7.6 percent to electrical bills.

     They must be the only ones thinking oil prices will increase to that level, as other agencies predict a world glut coming in 2020 (IEA). Even the US Energy Information Administration in their short-term energy outlook is predicting $67 Brent at US rates for the second half of 2019 and to remain there for 2020. WTI is expected to be $62 US a barrel for the second half, while 2020 sees a modest $63 US a barrel.

      Even some Bunker C blends like IFO 380 and IFO 180 are showing a rough $430 US a metric ton (roughly 7.5 barrels depending on oil gravity and other content) priced at $560 Canadian ($74.80 Canadian a barrel).

      The numbers certainly aren’t there, and mere speculation that numbers will be there simply doesn’t cut it.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil

Tuesday, July 09, 2019

Price changes for Thursday, July 11th, 2019


Hi to all,



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



*Heating, stove and Diesel fuel all show a drop of 1.8 cents a litre.

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



Market highlights



US inventory data

US inventories showed just a slight draw against oil supplies last week as crude showed a retreat of 1.1 million barrels.

    Gasoline supplies dropped by 1.6 million barrels.

     Refiner capacity remained well up, showing refiners are meeting the needs of the consumer market, with production ranging 94.2 percent for the week.

     Distillate supplies showed an increase of 1.4 million barrels.

     US domestic production also increased week over week, adding another 100,000 barrels for total production of 12.2 million barrels a day, mostly from shale reserves and output from Alaska.



Iran situation escalates

A British force sailing out of Gibraltar halted an Iranian tanker late last week. The tanker was halted under the guides of sanctions placed against Syria by the European Union.

     The tanker was believed to be on it’s way to Syrian refineries after taking the long way around the horn of Africa before entering the Mediterranean Ocean.



Keeping an eye to Libya

The unrest in Libya continues and the fight goes on between two factions trying to gain the throne of government.

     While the fighting goes on, no disruptions to exports have been reported so far, but with fighting going on between the Libyan National Army and the Government of National Accord. Most fighting is around Tripoli, but could disrupt exports if new centres of fighting open up.

     Oi prices could rise if the fighting spreads. Last report I have on total Libyan production shows the North African country producing an average of 1.1 million barrels a day.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil

Tuesday, July 02, 2019

Price changes for Thursday, July 4th, 2019


Hi to all,



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



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

*Diesel shows an increase of 1.3 cents, and...

*Gasoline shows an increase of 3.1 cents a litre.



Market highlights



US-China tariff war taking a “hiatus”

Oil prices rose a solid three dollars a US barrel over the past seven days as the US and China were said to meet at the G20 meetings in Japan. Oil rose as speculation in the markets swayed toward the thought that demand would pick up for oil if there was to be any settlement in the dispute between the US and China.

      Oil started a retreat today on word that only a truce was agreed upon to allow for more time for discussions to happen. Headwinds still are out there in efforts to get nearly $250 billion in tariffs removed from Chinese goods that have been hit.



US inventories take a hit

The inventory report from the US Energy Information Administration was released last Wednesday that also saw another impetus for oil to rise.

     Crude oil inventories took a major hit as supplies dipped by 12.8 million barrels, but still remained five percentage points over the average for this time of year.

     Gasoline supplies also dipped a million barrels as refiner capacity increased, springing signs of a slight increase in demand even though some describe demand as being “tempered”.

     US domestic production also dropped another hundred thousand barrels to show the US producing 12.1 million barrels a day, a drop of three hundred thousand in three weeks.



Costco moves west-but prices haven’t dropped-yet

While the new Costco location has opened, the hoped for continued difference in prices at the pumps in the west end of the city haven’t reacted to the new competition-yet.

     While prices saw a noticeable drop in the Immediate St. John’s northeast area the last couple of years, no real difference in prices have been seen yet with the move by Costco.

     Worth noting is that prices in St. John’s and the northeast ranged well below the regulated maximum during Costco’s time there.

      I’ll be keeping an eye to this one for any price moves in the coming weeks.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil