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Tuesday, November 26, 2019

Price changes for Thursday, November 28th, 2019

Hi to all,

Been at this for twenty three years as of last week. Hard to believe...

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

*Heating, stove oil and Diesel fuel all show an increase of 4/10ths of a cent a litre.

*Gasoline shows an increase of 2.1 cents a litre.

Market highlights

OPEC meeting is set for next week

OPEC and non-OPEC members will meet December 5th and 6th to discuss a possible additional cut to oil production in an effort to cut back on a world glut of oil and to help support prices.

     OPEC members will start with their own meeting on the 5th, followed by a meeting on the 6th where they will be joined by non-OPEC Ministers.

     It is the 177th time for OPEC to meet and just the seventh time for non-OPEC countries.

     Meetings to discuss deeper cuts to OPEC’s self imposed cuts of 1.2 million barrels a day have played on the markets the last few weeks, with prices rising higher in the last two weeks as the meetings drew near.

US Thanksgiving Day drives demand

The U.S Thanksgiving Day holiday has done what some have feared the last few weeks: drive up prices to consumers.

     With an anticipated increase in travel over the next few days, gasoline has risen as a result that will have some impact on overall supply. But increases have been tempered somewhat by growing inventories with prices up, but not as sharply as other years.

US EIA inventory data

Latest news from the Energy Information Administration indicates that crude oil continues to build with inventories adding 1.4 million barrels for the ninth week out of ten.

     Gasoline inventories added 1.8 million barrels, while distillates dropped a million.

     Refiner capacity was recorded at 89.5 percent.

     US domestic output was steady at 12.8 million barrels a day.

That’s it for this week!


George Murphy

Twitter @GeorgeMurphyOil  

Tuesday, November 19, 2019

Price changes for Thursday, November 21st, 2019

Hi to all,

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

*Heating and stove oil show an increase of 3/10ths of a cent a litre.

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

*Gasoline shows a drop of 3/10ths of a cent.

Market highlights

US and China on again-off again

The U.S and China just seem to not be able to agree to anything, and the agreement that speculators thought may be coming-is not-again.

     China is said to be wanting the US to roll back some tariffs with more due to hit December 15th, just less than four weeks away.

     Having said that, China is also thinking that they may be better off waiting to find out the results of the U.S impeachment hearings that are ongoing, so they can try their luck with different leadership.

     Oil initially showed increasing prices for this session, that is, until news broke of stalled talks and a watered down agreement.

Russia dropping out?

Saudi-led OPEC cuts to production, in concert with other oil producing nations, may be in trouble when OPEC meets to renew the production cut agreement next month in Vienna.

     Russia is said to be not there yet in agreement to a further cut in production should the topic of deepening the cuts to production come up. The present agreement runs until March of 2020, and Russia seems to agree to the same level as agreed last year, but OPEC wants to reach a new agreement to carry on with deeper cuts this year.

     Oil started a retreat Monday on the news.

     OPEC meets December 5th, just under three weeks away.

US inventories

The latest report on the state of US inventories is out.

     Crude supplies grew for the eighth week out of nine as inventories added 2.2 million barrels to a growing US supply.

     Gasoline also increase 1.9 million barrels while distillates dropped by 2.5 million barrels.

     Refiner capacity was reported at 87.8 percent and US domestic output was up to 12.8 million barrels a day.

Interesting debate in the House of Assembly

The House of Assembly will debate a government motion about the placement and use of electric vehicle charging stations in the House on Wednesday as increased use of electric vehicles continues to draw interest from consumers.

     The motion introduced by MHA Perry Trimper, who himself is a user of an electric vehicle, will centre on an experimental program for placing charging stations in predominant locations along the Trans Canada Highway to generate interest in the use of electric vehicles as an alternative transportation choice.

      Interesting as it is and just as a comparison, I worked out preliminary numbers on an imaginary trip to Grand Falls-Winsor using gas and then comparing it to electricity.

      What cost me $70 in a fill-up to make it there would cost me about $7 in electricity.

      Not bad...

      The debate in the House starts at 3PM.

That’s it for this week!


George Murphy

Twitter @GeorgeMurphyOil  

Tuesday, November 12, 2019

Price changes for Thursday, November 14th, 2019

Hi to all,

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

*Heating oil, stove oil and Diesel fuel all show no changes to prices.

*Gasoline shows a drop of 1.4 cents a litre.

Market highlights

US-China trade and tariffs stall the markets

US-China trade talks have stalled and markets are eagerly awaiting word, positive or negative- that may at least give them a sense of direction.

     Markets stalled late last week as President Donald Trump denied earlier thinking that a deal was close, saying instead that “Washington wasn’t going to sign any deal that wasn’t good for the US”. Trump is on record at the Economics Club of New York just today stating that if the US doesn’t get a deal it likes, then tariffs will go up”.

     The next round of tariffs are due to be applied to almost $155 billion in Chinese goods and services on December 15th.

Iran sanctions continue

Iran is finding it harder to sell its oil on the open market because of ongoing sanctions, but it is selling some.

     Iran is running out of storage space that could create further issues in the country as it may have to cut back production.

     Iranian production was reported at 2.2 million barrels a day last month, well down from May 2018 when production was measured at 3.8 million barrels a day. Sanctions have hit hard at Iran’s bottom line with it showing in recent news that Iran needs oil to hit $195 US a barrel for the finances of the country to show balanced books.

U.S inventories

US inventories may singularly be showing signs of a growing glut and a world slowdown in demand of oil if the trend continues much longer.

     Seven of eight of the last sets of inventory data have shown growing crude oil supplies, the latest data still showing crude supply grew by an added 7.9 million barrels last week.

     Gasoline supplied dropped 2.8 million barrels while distillate supplies dropped 600,000 barrels.

     Refiner capacity dropped back slightly to sit at 86 percentage points.

The next release of inventory data happens Thursday, a day later than the usual as a result of Remembrance Day.

That’s it for this week!


George Murphy

Twitter @GeorgeMurphyOil  

Tuesday, November 05, 2019

Price changes for Thursday, November 7th, 2019

Hi to all,

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

*Heating and stove oils show a drop of 1.6 cents a litre.

*Diesel fuel shows a drop of 1.5 cents a litre, and...

*Gasoline shows no change in price this week.

Market highlights

US-China trade optimism

The US and China are said to be close to an agreement that could lead to resolution of the trade dispute that has cost both countries an estimated $100 billion in tariffs and fines.

    China has been asking the US to remove some tariffs that were imposed by the US as late as September as a show of optimism that a deal can be reached going forward. They may do exactly that as a measure to have Chinese tariffs on oil dropped so the US can export more, thus supporting US oil prices.

OPEC+ still mulling production cut

OPEC and non-OPEC members are still playing with the idea of a production cut as their December meeting comes closer, but the spectre of sticking to those cuts remains as pervasive as ever.

     Russia, a participant in the cuts since January has reported that they produced almost 11.3 million barrels a day of oil last month, well ahead of their own production cut as agreed to with OPEC member nations.

      The present agreement is set to end in March, 2020.

Iran rattles nerves

Iran has announced that it has added another 1000 centrifuges to refine uranium  as Iran makes further moves away from the 2015 nuclear agreement.

     Iran wants sanctions to be removed so it can avoid further damage to its economy, and according to officials that say the sanctions have been unduly harsh on the oil exporting country.

     There may be something to that as analysts say that Iran needs oil to hot in excess of $190 a barrel US just to balance the books in 2020.

US inventories

US crude oil inventories increased in the week ending October 25th, adding 5.7 million barrels to crude oil inventories.

     Gasoline lost three million barrels, while distillates dipped a million barrels.

     Refiner capacity was measured at 87.7 percent, up slightly from the last report as some refineries came back online.

That’s it for this week!


George Murphy

Twitter @GeorgeMurphyOil