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