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Tuesday, February 25, 2020

Price changes for Thursday, February 27, 2020


Hi to all,



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



*Heating and stove oil shows a drop of an even penny a litre.

*Diesel fuel shows a drop of 1.4 cents a litre, and...

*Gasoline shows an increase of 1.4 cents a litre.



Markets get pounded by Coronavirus

With a drop in the markets of almost 1900 points on the DOW exchange and refined commodities starting to move lower, it’s all going to be a little more prevalent next week than this. While the markets started down Monday afternoon, all data had initially showed an increase to refined prices right up to Sunday night, with a marked retreat showing late Monday night.

     That trend continued today, but not enough to reverse the increase to gasoline prices, but certainly showed itself in the down trend on distillate prices.

     All numbers are trending downwards for next week on the heels of all this for Newfoundland and Labrador as well as New Brunswick.

     As Nova Scotia regulates on a different timeframe, it looks like they will be the first in Atlantic Canada to experience a drop in gasoline prices as we head to the pumps on Friday. So far, the numbers there indicate three cents down if all holds in the markets through Wednesday.

     The rest of us follow then in next week’s price changes.



Chinese oil demand faultering

As a direct result of the Coronavirus, Chinese demand for oil product is dropping sharply as reported here as a possibility here weeks ago.

     Accordingly, China demand for oil has immediately dropped by a million barrels a day at the start of February, while refined product consumption has dropped almost 35 percent during February month so far.

    Concerns are also mounting as the world glut of oil increases with dropping demand in China. As contagion spreads, so does consumption worldwide take a pause as the world is about to find out in the coming weeks if the spread of the virus is not contained.



OPEC can only hold its breath

Talks between OPEC and Russia are said to have failed after Saudi Arabia and Russia couldn’t agree on how much to cut production by.

     Apparently, the Russians were not seeing eye to eye with the Saudi’s when they broached a 600,000 per day figure.

     With talks now off for the time being, the Saudi’s are now in talks with both Kuwait and the United Arab Emirates for an additional 300,000 barrels per day cut to try and support prices.

     In the meantime, while OPEC is not affected by Corona for the time being, they are absolutely powerless to support prices while the virus runs amuck. With industries like airlines, tourism and trade being hit hard, there’s no doubt that inventory data will shortly see gains as a result.

     We’ll possibly get a first glance at the effect of the virus tomorrow when the Energy Information Administration releases its next set of inventory data.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil  

Tuesday, February 18, 2020

Price changes for Thursday, February 20th, 2020


Hi to all,



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



*Heating and stove oil to increase by 1.7 cents a litre.

*Diesel fuel to increase by 1.6 cents a litre, and...

*Gasoline to increase by 3.1 cents a litre.



Market highlights



Corona virus still affecting distillate prices

Oil prices may be up slightly, as are distillates, but according to the numbers, it may be some time before distillates regain ground it lost a few weeks back.

     Distillates may not gain back that ground until next fall, and that’s only if demand returns to pre-Corona levels we saw about two months back before the virus hit the markets hard.

     To complicate things, the Chinese economy has now slowed by a heavy 25 percent, and distillate use is still dropping in Asia as a result.



It may not look like it, but summer is coming...

It may not look like it, but speculators know a seasonal change that brings with it a change in the type of fuels that sees further investment.

     As happens every year, speculators start turning eyes from distillates as demand for heating and other distillates drop off, and they turn to gasoline. Whenever they make this turn, they look 45 days ahead and to the sunny skies of April month, at least in the US, where it is hoped, drivers start to hit the roads and bets are made that gasoline will be consumed.

     They’re hardly wrong about the change as gasoline numbers have started to go up in hopes that getting in early might establish a few returns in the months ahead.

     As you can see in the numbers this week, distillates are down and gasoline is increasing just a little bit more this week. The weeks ahead may promise more, maybe not so much, unless demand rises along with it.



US inventories

The Energy Information Administration released its data again this last week that showed a large build in crude oil inventories, up this week by 7.5 million barrels.

    That could be caused by refiners shutting down for early spring maintenance ahead of the spring run-up in gasoline prices.

     Gasoline inventories were recorded down by 100K barrels, while distillates were down two million barrels.

     Refiner capacity was recorded at 88 percent and US domestic production up again to 13 million barrels a day.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil  

Tuesday, February 11, 2020

Price changes for Thursday, February 13th, 2020


Hi to all,



Due to the fact that, up to release time, I have a lack of published data, I am not in the position to make a guess on price changes!



I have two days data that showed no change to gasoline and a 1.5 upwards change to heating, stove oils and diesel fuels.



However, that data for Wednesday and Thursday are simply not enough to make the guess as prices for oil alone started to drop after Thursday. The most important data needed simply wasn’t available.



In spite of that, if I happen to get data between this evening and tomorrow afternoon, I will try and get those numbers out to everyone concerned!



That’s what happens when you rely on the free sites!



Market highlights



OPEC+ considers cuts to support oil

Both OPEC and non-OPEC members are hoping to reach another agreement to deepen cuts to production, even after signing an agreement just weeks ago to extend present cuts to June.

      OPEC feels that the extension on the cuts agreement simply wasn’t enough to help support prices, especially in the face of a drop in world demand caused by the Coronavirus.



Corona virus still playing  a heavy role

Demand for oil and some refined products is till on the retreat, albeit slowing, in the face of the Corona virus outbreak.

     With the Chinese economy showing strong slowdown signs as a result, and tempered demand for distillate products for the airline industry as China travel slows, there is still no sign of a turn-around for oil while the virus sweeps economies before it.

     Unknown as of yet exactly how much demand is going to be affected for marine diesels and other distillates as the cruise industry also starts to take the force of a hit as a result of the virus.



US inventory data

The latest report from the Energy Information Administration is out, and crude oil has again climbed upwards adding 3.4 million barrels to total stocks.

     Gasoline inventories dropped a hundred thousand barrels, while distillate inventories added 1.5 million barrels.

     US data also shows refiner capacity at 87.4 percent as refineries look towards summer and maintenance shutdowns.



Oil and electricity

July is still a long way away, but if low oil prices keep the trend, electrical consumers will see a direct benefit from the rate stabilisation formula.

     Projections just a few months back showed a projected $106 a barrel Canadian cost while recently, prices have been ranging $72 Canadian.

     The electrical provider was allowed to increase prices based on a projected increase from $86 a barrel Canadian to $106 Canadian.

     The increase allowed at the time was 6.4 percent, or $6.40 on a $100 power bill. The allowable increase to rates occurred in October, 2019.



That’s it for this week!



Again, you might see a second note from me if I can chase down the data somewhere!

 

Regards,



George Murphy

Twitter @GeorgeMurphyOil 

Tuesday, February 04, 2020

Price changes for Thursday, February 6th, 2020


Hi to all,



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



*Heating and stove oil to drop 3.7 cents a litre.

*Diesel fuel to drop four cents even, and...

*Gasoline shows a drop of 1.3 cents a litre.



Market highlights



Corona virus hits again

The Corona virus still is the talk of the markets this week as weakening China and Asia demand hits oil and distillate fuels hard.

     With airlines curtailing flights into and out of China for the next while, distillate demand is also getting a hard hit as demand drops sharply for jet fuels in Asia. United Airlines is the latest in a string of overseas airlines that have curtailed flights into and out of China, and that has added to oil’s woes.

      On the oil side, as the economy has almost shut down in some areas of China, so also has the demand for oil imports as the economy slows. And with no sign as of yet that the virus is slowing, then so goes the fall of oil prices.



North American demand

Here in North America, markets are starting to turn towards the coming spring and that brings another factor into play as spring draws closer, bringing with it the prospects for warmer temperatures.

      It’s usually this time of year we start to see a first sign of spring: where speculators look at the calendar to see the end of winter approach, and with it, the prospects for warmer weather and dropping demand for heating fuels. That in itself sees waning demand also for distillates, exacerbated by the weather as well as lower demand in China due to Corona.

     As speculators start the move from distillates, attention goes toward gasoline, still showing some support even as oil prices fall. And even though gasoline is still dropping, the fall is not as prominent as that of distillate fuels.

    However, the move to gasoline may have already started as refiner capacity was reported down by a good five percent from the week previous, possibly caused by upcoming spring refinery maintenance.



EIA inventories

The latest US EIA inventory report is out and the news continues to show builds in crude oil inventories with supplies gaining 3.5 million barrels.

     Gasoline inventories continued a string of builds, this time adding 1.2 million barrels, while distillates dropped 1.3 million barrels.

     Refiner capacity was reported at 87.2 percent and US domestic production remained at 13 million barrels a day.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil