Price changes for Thursday, June 11th, 2020

Hi to all,



First off, I have no media availability tomorrow morning. Sorry!



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



*Heating and stove oils show an increase of 3.6 cents a litre.

*Diesel fuel shows an increase of 4.6 cents a litre, and...

*Gasoline shows an increase of 4.7 cents a litre.



Market highlights



OPEC+ extends cut agreement

OPEC and non-OPEC producers like Russia reached an agreement to extend cuts past the June deadline, adding another month to the cuts agreement reached a short two months ago.

      But there remains a problem of oversupply remaining in the markets that some are speculating is still a billion barrels over world needs. OPEC and non-OPEC cuts at close to 10 million barrels a day can only account for 300 million in June month, and oil prices rising slightly have drillers in US shale regions thinking it may be time to return to the oil patch.

      US drillers may not have been taken out of the markets as much as OPEC had thought

      While oil prices increased after the agreement was reached, they didn’t hit levels that some thought would signal a significant impact on oil inventories.

       And while a US jobs report showed some optimism of increased economic activity, there’s still the spectre of Covid-19 hanging over the markets.



First real tropical storm in the Gulf takes some production offline

Tropical storm Cristobal hit the coast of Louisiana on Sunday bringing heavy rain and some flooding.

     The storm also took about 660,000 barrels a day of production offline, bringing in a temporary rise in oil prices due to the short-term disruption.



US EIA inventories

The latest report from the Energy Information Administration shows that crude supplies dropped by 2.1 million barrels as US domestic production also dropped to 11.2 million barrels a day.

     Refiner capacity was recorded at 71.8 percent.

     Gasoline inventories increased by 2.8 million barrels and distillates were up sharply by 9.9 million barrels as some distillate users like airlines remain on the ground.

     Meanwhile the Baker Hughes rig count was down another 17 rigs to 284 from 984 rigs at the same timeframe for last year.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil