Hi to all,
Here’s what I have
for this week’s price changes:
*Heating, stove oil
and Diesel all show no changes to prices this week.
*Gasoline shows an
increase of 8/10ths of a cent a litre.
Market highlights
OPEC meets this
week
OPEC members will
meet again tomorrow to discuss a partial lifting of cuts that are scheduled to
be lifted as some countries economies open up again.
OPEC cuts were supposed to ease somewhat at the start of August, going from 9.7
million barrels a day to 7.7 million barrels a day. The move is anticipated as
OPEC does not want to cause any alarming fall in the price of crude, nor does
it want to cause any harm to any economic recovery that may be underway.
At the same time, OPEC members need the revenue, so there is still support for
prices to be sustained over $40 US a barrel to help top up lost revenues.
Meanwhile, new data from OPEC is showing there was stronger than usual
compliance with production cuts in June month with numbers showing OPEC members
actually cut 10.5 million barrels a day, well over the 9.7 million members had
agreed to.
Chinese storage
drying up quickly
Those readers of
the update will recall just two weeks ago that I reported that data out of
China indicated they were buying low and filling strategic reserves. Further to
this, tanker traffic has become backlogged with unloading not going off as
planned, another strong indicator of just how fast Chinese storage capacity has
filled up.
Information at that time showed China buying more than two million barrels a
day more than what consumption figures were showing, ironically a figure being
discussed by OPEC as the total they will throw into the markets.
If Chinese storage does fill up, and offloading ceases
in Asia, the we may have another problem starting where, in addition to a
partial lifting of cuts, plus waning China purchases, could put 4 million
barrels of crude a day back onto the oil markets again.
US inventory data
The latest US EIA
inventory data is out, and crude oil added 5.7 million barrels of crude to US
supplies.
Gasoline dropped 4.8 million barrels, while distillates added 3.1 million
barrels on 77.5 percent refiner capacity.
US domestic production was reported at 11 million barrels a day for the third
week in a row, indicating a steady output with prices averaging $40 US a
barrel.
That’s it for this
week!
Regards,
George Murphy
Twitter
@GeorgeMurphyOil
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