Hi to all,
Here’s what I have for this Thursday’s price changes:
*Heating and stove oils to drop by 2.8 cents a litre.
*Diesel to drop by three cents a litre, and...
*Gasoline to drop by six cents a litre.
Market highlights
OPEC and Russia go head to head
There’s no sign of Russia or OPEC backing down from their promises to flood the markets with crude, and it looks like flooding the market may have been intended all along.
New figures on OPEC production for the moth of February show that Saudi Arabia may have been already gearing up for greasy combat with other producers as the lead OPEC member produced 36,000 barrels a day more than intended.
Not unusual to see a member overdo it, Saudi Arabia was always the member who policed the others into maintaining production levels and stuck to its own quotas quite rigidly since signing the initial production cut agreement in January 2015.
Tankers wanted: now at a premium
Word has it that tanker rates are rising amid signs that the Saudi-Russia oil war has begun.
Shipping rates have increased over six hundred percent as mainly Saudi sellers are using every tanker and sending them off to markets in Asia and Europe at the rate of over two million barrels a day in an attempt to grab market share from Russia by flooding the markets with cheap product.
Saudi Arabia announced last week that it would sell oil at discounted rates to preferred customers.
Jet fuel demand weakens
While the COVID-19 virus takes hold and people head home to isolation, strong signs of how much impact the virus and economic meltdown is having are becoming readily apparent.
The International Air Transport Authority is reporting a larger than normal drop in the important motive fuel in weekly, monthly and year to year data.
Weekly data is showing that the industry is slowing at a rapid pace with demand for product down 23.8 percent over the last week, 39.7 percent from last month and an astronomical 47.8 percent from the same time last year.
That’s just North American travel. The rest of the world averages close to the same.
Prices have averaged 37 cents a litre over the last week. With no one flying, expect these prices to drop further.
Word I am getting is that jet fuel stocks are filled to the rim with nowhere else to put refined inventories, including at North Atlantic Refining in Placentia Bay, NL.
Space is running out in the face of collapsing demand everywhere, another sign that shows the world was very close to a glut situation before the crude oil price war started.
That’s it for this week!
Regards,
George Murphy
Twitter @GeorgeMurphyOil
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