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!
Regards,
George Murphy
Twitter @GeorgeMurphyOil
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