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Tuesday, December 17, 2019

Price changes for Thursday, December 19th, 2019

Hi to all,

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

*Heating, stove oil and Diesel fuel all show an increase of 1.2 cents a litre.

*Gasoline shows an increase of 2/10ths of a cent per litre.

Market highlights

Colder US weather moves distillates up

All of a sudden, it’s cold outside.

     With colder weather suddenly gripping the U.S northeast, market traders have seen an increase in demand for distillate fuels like heating and stove oils, and that has also played into a slight increase coming to diesel fuel prices as well.

     Spot prices for distillate fuels have moved up in lock step with oil prices through this pricing session, and as the weather continues to be colder heading into the depths of winter, we may not see upwards pricing pressures drop anytime soon.

      Markets tend to change their focus to distillates this time of year as colder weather spurs demand for heating, stove oil and diesel fuel.

US-China trade deal done?

Some movement in trade talks has also spurred oil prices upwards this week as speculation surrounds the markets with word that the US has suspended fifty percent of tariffs placed on Chinese goods and services back in September in exchange for China buying all American produced agricultural products.

     In addition, the U.S will delay implementation of additional tariffs on China that would have taken effect on December 15th.

     China has also dropped additional tariffs on US manufactured cars and other agricultural products as there seems to be a “truce” called in what is known as “Phase one”.

     “Phase Two” talks will involve deeper talks to remove remaining tariffs and are said to be starting “immediately”.

      Estimates amongst traders say the economic damage caused by the tariff disagreement between the two countries ranges anywhere between $160 and $250 billion dollars, not to mention the damage caused by the slowdown in the world economy.

     Oil turned slightly higher this week as some hope is showing for the recovery of the world economy through to the end of 2020.

US inventories:EIA

The latest US inventory report has crude oil supplies adding 800,000 barrels ahile a surprise gain showed for distillates, adding 4.1 million barrels.

     Gasoline supplies increased by 5.4 million barrels with refiner capacity measured at 90.6 percent.

      US domestic crude oil production was recorded at 12.8 million barrels a day, down 100,000 from the previous week.

That’s it for this week!

Regards and Merry Christmas!

George Murphy

Twitter @GeorgeMurphyOil  

Tuesday, December 10, 2019

Price changes for Thursday, December 12th, 2019

Hi to all,

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

*Heating and stove oil shows a slight increase of a half penny a litre.

*Diesel shows an increase of 6/10ths of a cent a litre, and...

*Gasoline shows no change to prices this week.

Market highlights

US-China trade deal close?

As a possible sign of an agreement between the US and China in their trade dispute, the US has reportedly delayed the imposition of further tariffs on Chinese goods and services as a gesture of good will as a final deal is said to be close at hand.

     New tariffs from the Trump government were due to kick in December 15th as a measure to get the Chinese to bend to economic pressure.

     Oil prices rose slightly in the face of anticipated higher demand for oil and refined products.

Propane price sticker shock

Last week’s strong upwards movement of propane prices was probably a shock to some consumers in the province as prices increased by over 14 cents per litre.

     As far as I know, spot prices in Sarnia, Ontario rose sharply as a result of a strike by CN Railway that curtailed deliveries of propane supplies from Western Canada, thus driving up prices for any available stock.

     As the strike is now over, I fully expect to see prices retreat to more normal levels in the coming couple of days.

US Inventories

The US Energy Information Administration has released its latest inventory data showing that crude supplies dropped 4.9 million barrels while gasoline supplies grew by 3.4 million barrels.

     Distillate supplies increased 3.1 million barrels on a reported capacity of 91.9 percent a s refineries returned back from maintenance programs and drew on oil stocks.

     Domestic production was reported at 12.9 million barrels a day.

That’s it for this week!


George Murphy

Twitter @GeorgeMurphyOil  

Tuesday, December 03, 2019

Price changes for Thursday, December 5th, 2019

Hi to all,

Due to unpublished data through the U.S Thanksgiving holiday, I’m running on an incomplete dataset this week. However, I do have something to go on!

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

*Heating, stove oil and Diesel fuel all show a drop of 8/10ths of a cent a litre, and...

*Gasoline shows a drop of 1.8 cents a litre.

Market highlights

Markets await OPEC moves

Markets were showing a slight increase at the start of the session last Wednesday as OPEC discussion had some pretty heavy talk over the prospects of an extended cut in production ahead of the December 5th and 6th meetings.

     However, markets showed an almost 5 percent drop in oil prices as speculators saw initial numbers that showed OPEC and other non-OPEC members had not stuck to their agreed-upon production cuts. Oil gained some lost ground on Monday as traders again saw hope of cuts to production and even an extension and deepening of cuts to help support prices.

     For now, it’s all eyes on OPEC meetings later this week.

U.S inventory data

U.S inventory data again showed a build in U.S crude stocks, bringing with it sure signs that a glut is beginning to tell in the U.S as sales drop.

     EIA data shows that crude stocks increased by 1.6 million barrels, while gasoline inventories increased by 5.1 million barrels, a sign that demand may be waning in spite of the U.S thanksgiving Day holiday. New data will be released Thursday that may give me a better lay of the land on demand.

     Distillate stocks also increased by 700,000 barrels as refiner capacity was  reported at 89.3 percent.

     U.S domestic production also was recorded  at 12.9 million barrels a day.

IEA warns of global glut in supply

The International Energy Agency is again warning of a growing glut of world oil supplies as non-OPEC producers add more production to world supplies.

     The IEA is projecting that world supplies will increase by an estimated 2.3 million barrels a day, while projected demand is forecast to grow by a mere 1.2 million barrels a day as the world economy slows.

     Again, according to the IEA, it may come down to what OPEC will do this week as any cut to production will have to be substantial in order to support oil prices, and that’s also not taking into consideration OPEC+ being able to stick to their self-imposed cuts.

      Traders are saying that, a failure for OPEC to act may lead to another sell-off in oil as the glut looms.

That’s it for this week!


George Murphy

Twitter @GeorgeMurphyOil