Price changes for Thursday, September 5th, 2019

Hi to all,



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



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

*Diesel shows an increase of 7/10ths of a cent, and...

*Gasoline shows a drop of 1.6 cents a litre.



Market highlights



U.S-China tariff dispute heats up

The U.S and China trade dispute has entered a new cycle.

This week, the U.S started adding another round of tariffs on Chinese goods with the promise of more tariffs to come December 15^th. That has added concerns amongst traders that there will be a drop in crude demand in China as the Asian country faces a downturn in economic output to their largest trading partner.

     China was quick to respond.

     China also reacted by placing a 10 percent tariff on any U.S oil imports into China, throwing U.S producers offline and affecting U.S exports of crude.

      The Chinese have other places to but crude as most Middle East producers are shopping their wares to any nation that will take their supply.

     Brent crude prices were mainly supported, while West Texas Intermediate prices fell on the news, stalling U.S domestic growth the past few days since China placed tariffs on U.S crude.



End of summer

The summer driving season has come to an official end with the start of the school year now underway.

     Speculators are now placing their bids on the distillate group of fuels while gasoline has started to slide somewhat from summer highs.

     Consumers are at a disadvantage this year as spot prices for heating oils have not dropped appreciably from last winter’s highs, still ten cents a litre lower than last winter, but 13 cents higher than August of 2017 and the lead-up to winter. 
     On average, prices have crept up by ten cents a litre over the intervening winter months, so I expect to see heating oil prices to increase into the winter buying season.

     All oil price and distillate inventory dependent, of course.



U.S EIA inventories

The latest inventory report is out from the Energy Information Administration.

Wednesday’s inventories showed a draw-down of ten million barrels of crude , while gasoline and distillate fuels showed a drop of 2.1 million barrels each.

       Crude supplies are at the average level recorded over the last five years.

       Refiner capacity was recorded at 95.2 percent, up from the week previous, and U.S domestic production grew last week adding 200,000 barrels to sit at 12.5 million barrels a day.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil