Hi to all,
Here’s what I have for this Thursday’s price changes:
*Heating and stove oil to drop by 2/10ths of a cent per litre.
*Diesel fuel to drop by 3/10ths of a cent per litre, and...
*Gasoline to drop by 4/10ths of a cent per litre.
OPEC meets again Thursday
OPEC will have a special meeting to further discuss a longer timeframe for production cuts Implimented just about a month ago.
Oil prices had been increasing as a result of the cuts and a return of some demand as economies get back to work.
However, the latest survey seems to indicate that OPEC has failed to meet it’s own production cuts only meeting about 70 percent of the agreed-upon 9.7 million barrel a day total production cut.
According to Oilprice.com, Nigeria and Iraq are both seen as being two OPEC members who failed to meet the goal with Iraq meeting just under 40 percent of the ask of that country.
Russia, in the meantime, is looking at an end to production cuts at the end of June, in stark disagreement with Saudi Arabia who are looking to extend the production cut agreement.
US EIA inventories
The latest inventory report from the Energy Information Administration is out, a day later because of the US Memorial Day holiday.
Crude supplies increased by 7.9 million barrels, while gasoline showed a modest drop of 700,000 barrels.
Distillate inventories were up by 5.5 million barrels.
Refiner capacity was up this week to 71.3 percent, while US domestic production was recorded at 11.4 million barrels a day, down another 100,000 barrels.
Refined gasoline supplied to the US markets was recorded at 7.25 million barrels against 9.39 million barrels a day for the same time period last year, down close to 2.1 million barrels.
**Oddly, while oil stocks have been dropping in Cushing, Oklahoma, giving some support for WTI prices, has anyone noticed that stocks in PADD’s 3, 4 and 5 have been increasing in the last few weeks? It’s my contention that they have been diverting inventory rather than seeing a more pronounced drop in production.
Canadian dollar rises
Anytime we see a rise in the Canadian dollar against the US greenback, some effect is had against fuel spot prices. This week is no different as the sharp rise in the dollar has resulted in consumers seeing a drop in prices while actual spot prices for refined product have also risen right along with them.
Since May 22nd, the Canadian dollar has gained a full nickel saving consumers a rough 4 to five cent a litre increase across the board for refined products.
Rig counts down further
US drilling rigs in the field were down another 17 rigs according to last week’s Baker Hughes rig count, and down 683 rigs from the same timeframe last year.
While rigs exploring and drilling may be down, that doesn’t mean that production of oil has dropped at the same rate as indicated by the numbers of rigs offline.
Key US domestic production figures need to be watched closely as does the rig count as some producers may return to the field as oil prices rise again.
That’s it for this week!