Hi to all,
Here’s what I have for price changes this week:
*Heating and stove oils to drop by 1.5 cents a litre.
*Diesel to drop by 2.3 cents a litre, and...
*Gasoline shows an increase by one cent a litre.
Market highlights
Record cut between OPEC+
Starting May 1st, OPEC and non-OPEC producers will institute a production cut that amounts to close to 13. 4 million barrels a day, but even that may not be enough.
In a last minute negotiation that lasted until Monday, OPEC and non-OPEC producers signed on to a history making round of cuts in an attempt to reign in the falling price of oil.
Since the start of a price war between Russia and Saudi Arabia few weeks back, oil spilled onto an already weighed down oil market and a world economy weighed down with a war on Covid-19 and a world economy shutting down.
No side was willing to back down.
With the “sudden realisation that the fight wasn’t going anywhere, the Saudi’s reluctantly returned to the table in an effort to stop falling prices, and to call an end to a losing proposition.
With OPEC taking up 9.7 million barrels, other non-OPEC producers like Canada, Norway and the U.S were expected to take on the rest of a 13.4 million barrel per day cut in production.
Deal in trouble already?
News out of Asian markets supposedly are saying that Saudi Arabia has continued to discount oil to its preferred Asian customers again, all ahead of the cuts due to be implemented.
According to oilprice.com, the deal includes a further discount to May purchases for Asian customers of up to an additional $4.20 a barrel discount that could potentially kill the production cut agreement that doesn’t even have the ink dry yet.
Brent oil prices immediately dropped to $30 US a barrel just before the end of trading.
US inventories skyrocket
In a sign of dropping demand and open spigots, the US EIA inventory report from last week again showed a massive build in stocks with oil increasing by 15.2 million barrels.
Gasoline gained 10.5 million barrels while distillate stocks increased 476,000 barrels.
Refiner capacity was reported at 75.6%, a sign that refiners are reducing refining capacity and getting close to shutting down.
Late Tuesday, the American Petroleum Institute reported another massive build in crude stocks, with their numbers showing an increase of 13.1 million barrels on top of last week’s report of an increase of 12 million barrels.
The next EIA inventory repot is Wednesday, April 15th that is also expected to show another massive inventory build.
That’s it for this week!
Regards,
George Murphy
Twitter @GeorgeMurphyOil
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