Price changes for Thursday, April 9th, 2020

Hi to all,

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

*Heating and stove oil to drop by 3/10ths of a cent a litre.

*Diesel to drop by 1.1 cents a litre, and...

*Gasoline to increase by 3.5 cents a litre.

A phone call for the ages...

For what may be the first time ever, nations outside of OPEC are going to be asked to join in on a world effort to support the oil industry by instituting their own production cuts.

     In a phone call/teleconference, Canada will be asked to institute it’s own round of cuts in a three month effort to stem the bleeding to the industry and help support oil prices in the face of the Covid-19 pandemic.

     The disease has cause da shutdown of the world economy and, according to estimates a drop in demand of 20 million barrels a day, unheard of in my memory.

     World demand was topping 98 million barrels a day before the crisis and economic slowdown.

      The US, Norway, Canada, Britain and Brazil are among the countries asked to take part of what could be a production cut amounting to 10 million barrels with OPEC taking the other 10 million barrel cut.

Trump not happy?

Mind you, with the OPEC nations now looking for a cut by non-OPEC nations, they also want to include the US, which itself has become a powerhouse with shale production. But don’t expect the US to jump in willingly to cut.

     When asked the other day whether the US will introduce a cut, Trump said the industry is already shutting down with lower prices. The cuts were coming, but not on his terms.

     Trump went off the deep end calling for tariffs on Saudi crude just to support his own industry, rather than see the US make meaningful cuts.

US EIA inventories

Better later than never as they say, but the latest EIA inventories are showing a steep increase in crude supplies as demand dies south of the border.

     US crude supplies gained 13.5 million barrels as gasoline showed slipping demand, adding 7.5 million barrels added to stocks.

     Distillate inventories showed a drop of 2.2 million barrels as tractor trailers and trains still ran and heating oil remained up in demand.

    Refiner capacity was shown to have dropped considerably, measuring in at 82.3 percent.

That’s It for this week!

Regards, and go wash your hands!

George Murphy

Twitter @GeorgeMurphyOil