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
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