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
No comments:
Post a Comment