Hi to all,
Here’s what I have for this week’s price changes:
*Heating/stove oil to drop by 1.6 cents a litre.
*Diesel to drop by 2 cents a litre, and...
*Gasoline to drop by 2.2 cents a litre.
IEA report released-and it’s not good
The International Energy Agency released it’s latest report on demand for oil this week as promised, and the news for oil is not good...again.
The August report showed a drop in demand that showed 180,000 barrels a day less would be used. Demand was down by 8.1 million barrels a day.
The September report shows an additional 300,000 barrel drop in demand growth that brings the total drop in demand to 8.4 million barrels. The agency goes on to say that they expect any recovery in oil prices to decelerate markedly during the second half of
Overall world demand is predicted to be 91.7 million barrels a day this year.
Oil and gas companies set to lose
It’s a remarkable story I found through CNBC this week as estimated losses due to Covid-19 continue to confound and confuse the oil markets and the future of some oil companies and their projects.
Before Covid-19, according to Rystad Energy, companies were set to generate a record $2.47 trillion in revenues, where with the advent of Covid-19 and the effects on supply and demand, revenues are now projected to drop by an amazing $1 trillion this year.
And no wonder some companies are being forced to reign in spending on some projects, especially knowing that besides a projected drop in demand, there may be no recovery in oil until we get past Covid-19.
Plain and simple, a world of instability in the industry until 2022 by the look of things.
Don’t look, but here comes Iran
Sanctions against Iran were lifted by the United Nations recently, and that also adds an issue to the growing world glut of oil.
Iran produces almost 3.68 million barrels a day, and has set plans ahead for a rapid expansion of its industry, all in spite of any US attempts to shut down its oil exports and production.
A lifting of sanctions means another load of Middle East oil that will only add to the world oversupply issue.
It also means another source of supply and competition to other producing nations that will have the potential to choke off liquidity to companies.
US EIA inventory data
US crude oil inventories were up last week for the September 4th reporting period.
Gasoline supplies dropped by 3 million barrels and distillates decreased by 1.7 million barrels.
Refiner capacity was recorded at 71.8 percent as some refineries still underwent the shutdown from Hurricane Laura.
That’s it for this week!