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Due to unpublished data through the U.S Thanksgiving holiday, I’m running on an incomplete dataset this week.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 5^th and 6^th 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!



Regards,



George Murphy

Twitter @GeorgeMurphyOil