Hi to all,
Here’s what I have for price changes for this week:
*Heating and stove oil shows a drop of 3.5 cents a litre.
*Diesel fuel shows a drop of 3.7 cents a litre, and...
*Gasoline shows a drop of 2.9 cents a litre.
Market highlights
Middle East tension eases...for now
Tensions in the Middle East are still there and always will be, but both antagonists in the latest events between Iran and the US have taken a pause as the world reacts to the shock of the shootdown of a civilian airliner that saw 57 Canadians amongst the lost.
Oil increased in the days ahead of the missile attacks launched by Iran last week, but showed a steady retreat as Iran was forced to look back on itself as people there began protesting against the leadership of the Middle East country that now faces it’s own internal issues.
Speculators are betting on an uneasy peace while other nations, including the European Union, show some interest in sparking talks in getting a new round of negotiations in the search for a new nuclear weapons deal.
US EIA inventory data
The latest report on inventories from the Energy Information Administration is out.
The report indicates that crude oil inventories gained in the week up to last Wednesday, rising by 1.2 million barrels.
Gasoline increased by a whopping 9.1 million barrels, while distillates that include heating oil and diesel added 5.3 million barrels.
Refiner capacity was reported at 93 percent.
US domestic production was reported at a steady 12.9 million barrels a day.
Marine diesel and new rules
New regulations around sulphur content in bunker type crudes is now in effect.
Starting in January of this year, new regulations governing the use of heavy sulphur crude and bunker type fuels came into effect with the marine transport industry leading the charge to lower sulphur emissions.
IMO 2020 has new regulations restricting the use of heavy and dirtier bunker type crudes in marine applications that has resulted in worldwide changes that also has the potential to increase other distillate prices if demand cannot be met for lower sulphur content in marine diesel applications. Questions are out there asking if the refining industry can meet demand for lower sulphur distillates.
That’s why we hear so much on the value of some crude oils as an immediate source of lower sulphur content (gravity) as it can be blended with higher sulphur content crudes to meet new environmental standards.
Recently, a type of crude known as Pyrenees from Australia sold for close to $100 US a barrel, its sulphur content being .19 percent sulphur content and a gravity of a little over 19 API.
That’s probably why there’s so much interest in our offshore, having some lower gravity crude types off our own shores.
That’s it for this week!
Regards,
George Murphy
Twitter @GeorgeMurphyOil
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