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Tuesday, October 29, 2019

Price changes for Thursday, October 31st, 2019

Hi to all,

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

*Heating and stove oil to increase by 6/10ths of a cent a litre.

*Diesel to increase by 3/10ths of a cent a litre, and...

*Gasoline shows an increase of 1.5 cents a litre.

Market highlights

Oil prices up

As oil prices have been going in recent months, any increase in oil prices is a celebration for some speculators at a time when there hasn’t been much to celebrate.

      Over the past week, oil prices have risen about $2 US a barrel as speculators  see hopeful signs that the US and China will see an end to their trade and tariff dispute.

      Stock markets have been mostly in record territory again as traders see an increase in demand for oil if trade barriers are lifted off China.

OPEC making moves

OPEC and non-OPEC member oil producers continue to dwell on production cuts as Saudi Arabia is said to be ready to do anything to support prices.

     Already Saudi Arabia has made a preliminary move of checking on production levels in OPEC member nations to make sure they have been complying to their side of production cuts before they formally announce measures or further cuts to production quotas

     Old habits die hard as OPEC members have often been cheating on their own quotas whenever they see a fiscal advantage as prices rise. In the meantime, compliance was itself pretty good in recent months and talk amongst members and non-OPEC members indicates some willingness to institute a further round of cuts.

     Just how much they will end up cutting remains open at this time.

US inventory data

The Energy Information Administration released its weekly report Wednesday that showed a 1.7 million barrel drop in crude stocks as well as a draw in gasoline inventories of 3.1 million barrels.

     Distillate supplies also saw a draw of 2.7 million barrels.

     Refiner capacity was recorded at 85.2 percent for the week as refiners continued maintenance programs.

That’s it for this week!


George Murphy

Twitter @GeorgeMurphyOil  

Tuesday, October 15, 2019

Price changes for Thursday, October 17th, 2019

Hi to all,

Due to the fact that I have not received data for Friday’s market numbers, numbers may be off slightly from the actual that may occur. Here’s what I have for this week’s price changes:

*Heating and stove oil shows an increase of a half cent (5/10ths) a litre.

*Diesel fuel shows an increase of 9/10ths of a cent per litre, and...

*Gasoline shows an increase of 1.5 cents a litre.

Market highlights

US-China trade deal

The US and China are reported to be close to an agreement on tariffs, but you’d hardly think that was true according to oil’s performance the past few days.

     Speculators are laying 50/50 odds of a signed agreement by the end of October that may (or may not) return trade between the two world economic powers back to something more normal.

     Oil markets responded positively on Thursday moving higher as speculators thought an increase in oil demand would result, but it didn’t last very long.

     Chewing into details, speculators found that there wasn’t much detail and that the four foundations of the trade war weren’t even touched. China also made no mention of the agreement and still wants to see December tariffs removed before they sign onto anything.

Iranian tanker attacked

Iran has claimed that one of its tankers was attacked by missiles on Friday that helped support oil prices as tensions continued to weigh on oil markets.

     However, the attacks didn’t raise prices as much as feared, but still showed that Middle East targets abound and risk premiums remain on crude oil anywhere from the Middle East.

IEA makes a cut to forecasted oil growth demand

Just last month the US EIA made projections on lower demand and this past week seemed to be “seconded” by the International Energy Agency (IEA) as they moved downwards their forecast for any growth in demand by another 100,000 barrels a day from an initial projected growth of 1.1 million barrels a day.

     No doubt that the lower forecast signals lower demand due to world economic conditions.

US inventories

The US Energy Information Administration released inventory data again Wednesday that showed another build in overall crude oil stocks.

     Inventories of crude oil increased by 2.9 million barrels while gasoline stocks dropped 1.2 million  barrels as refiner capacity was measured at 85.7 percent for the week as some refineries remained closed for winter maintenance.

     Distillate inventories dropped by 3.9 million barrels as colder weather increased demand for heating product.

     U.S domestic oil production was recorded at 12.6 million barrels last week, an increase of 200,000 barrels.

That’s it for this week!


George Murphy

Twitter @GeorgeMurphyOil  

Tuesday, October 08, 2019

Price changes for Thursday, October 10th, 2019

Hi to all,

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

*Heating and stove oil to drop by 1.2 cents a litre.

*Diesel fuel to drop by 1.3 cents a litre, and...

*Gasoline shows a drop of 8/10ths of a cent per litre.

Market highlights

U.S-China talks

Speculators remain skittish over the possibility of the U.S and China reaching a settlement in their trade dispute when talks resume again on Thursday.

     The U.S has blacklisted more Chinese companies from doing business within U.S borders which may throw another wrench into things.

     The 28 companies were blacklisted for alleged human rights violations. The week previous was with optimism that a deal would be reached with Chinese officials expressing remorse that a better deal couldn’t be reached, but they would sign what was presented up to this point.

US EIA revises oil price forecast lower

The United States Energy Information Administration revised its Short term Energy Outlook (STEO) lower from what was forecast just a month ago citing the world economy and a strong building of world oil inventories as we get closer to 2020.

     Brent prices were forecast to be $5 a barrel lower than the $63 U.S that was forecast just in early September, with Brent dropping to $57 a barrel U.S in 2020. As far as I can read in the report, it doesn’t take into account rising geo-political risk such as that resulting in a production disruption in Saudi Arabia three weeks ago.

U.S inventory report

The latest report shows more refinery facilities have shut down for annual winter maintenance as refinery capacity was reported down to 86.4 percent.

     Crude inventories gained as oil throughputs halted and stocks built as a result.

     Gasoline inventories dipped by 200,000 barrels while distillates dropped 2.4 million barrels.

     U.S domestic production of crude dropped 100,000 barrels to sit at 12.4 million barrels a day.

That’s it for this week!


George Murphy

Twitter @GeorgeMurphyOil  

Tuesday, October 01, 2019

Price changes for Thursday, October 3rd, 2019

Hi to all,

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

*Heating and stove oils to decrease by 2.6 cents a litre.

*Diesel to decrease by 2.4 cents a litre, and...

*Gasoline shows a drop of 1.6 cents a litre.

Market highlights

Saudi Arabia recovery continues

Saudi Arabian oil infrastructure continues to recover after attacks by drones and cruise missiles took 5.7 million barrels a day of production capacity offline.

     The outages briefly took oil prices close to $70 US a barrel before retreating to todays close below $60 US.

     Refined prices also increased to consumers, but with this week’s drop in prices, should come close to what they were previous to the attacks.

     Saudi Arabia has announced that oil infrastructure will be ready for full production again by the start of November, and indeed, some are reporting that Aramco, the Saudi Arabian oil company has already reached pre-attack output of 9.9 million barrels a day.
      But really...
      Put this in the perspective of an attack against Saudi infrastructure twenty years ago. 
      With U.S domestic production of 5.8 million barrels a day then as compared to 12.5 million barrels a day just last week, it shouldn't be a wonder why oil prices never hit the roof. That, and the advent of other alternative energies that simply weren't "commercial enough" as what they are today, like solar and wind, have woken up some to the possibility that oil finally has competition.
     If there's any warning there for "Big Oil" from this attack, it's simply that they had better find more secure fields in "secure and stable" countries if oil is to survive as viable. Price matters, and the fact that solar and wind potential exists worldwide simply has shown that an attack against Saudi infrastructure to raise oil prices simply won't do it. There was a lot more at stake with the speed of the repairs than just to bring oil back online.
     A lot more could have been lost than just market share.

World reserves

In the event of outages, it seems the world was prepared for the worst.

     According to the International Energy Agency, world stocks of oil on government oil reserves like the US strategic reserve, amounted to 1.5 billion barrels, while private industrial-owned reserves totaled 2.5 billion barrels.

     These amounts do not include pooled reserves and discovered fields that have been left untapped, or facilities that have been shut down due to price or oversupply.

     There’s plenty out there!

U.S inventories

US crude oil inventories posted another gain last week as the Energy Information Administration said stocks increased by 2.4 million barrels.

     Gasoline stocks gained 500,000 barrels while distillates dropped 300,000 barrels as colder weather prospects increased demand there and gasoline demand tapered down.

     Refinery capacity was recorded at 89.8 percent as refiners continued fall maintenance programs.

That’s it for this week!


George Murphy

Twitter @GeorgeMurphyOil