Tuesday, September 22, 2020

Price changes for Thursday, September 24th. 2020

 

Hi to all,

 

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

 

*Heating, stove oil and Diesel all to increase by 1.9 cents a litre.

*Gasoline shows an increase of 4.2 cents a litre.

 

Hurricane Sally backs down

While Hurricane Sally came ashore along the coast of Louisiana, the damage that it left may be felt in the pocketbook more so than anywhere along the Gulf coast.

     Disruptions again hit the Gulf with offshore pumping and processing facilities along the Louisiana coast, cutting off some crude oil and causing short-term spikes to oil prices, which started to retreat again Sunday as the lack of storm damage became apparent.

     Spot prices for gasoline increased from 39 cents a litre to 43.1 cents as oil prices for WTI went from $38 US to $41. Brent went from $40.70US to $43.10 before beginning the retreat Sunday, ending today at $41.70 US again as Covid concerns took over the markets again.

 

Impacts on oil may be insurmountable

While Covid-19 reigns and rails against economies, let alone people, the damage the worldwide shutdown may be causing to oil may never be fully overcome.

     Even OPEC nations are experiencing increased debt ratio numbers as they try and cope with oil prices well below what they had budgeted for.

     With nations in Europe placing fossil fueled vehicles on the endangered list, it begs to question how oil prices will survive the “green crush” that is about to hit.

     As of today, the last year for which a fossil fuel burning vehicle can be sold in Britain is being proposed to be moved ahead to 2030, the same year as France, Belgium and Germany, and to expedite the rollout of environmental programming.

     Norway has it tagged to the year 2025.

     With the shutdown by Covid-19 and the drop in demand, a worldwide issue remains with building inventories and storage areas becoming filled with unused oil and refined products. China has slowed imports as storage is reported close to full, and India’s strategic reserves are said to be filled to the brim.

     Also signalling change is directly from BP who, in their report say that India may see peak oil demand by the year 2025, a full 25 years earlier than expected.

     They go on to say that, while they will still need energy, that will come from natural gas and renewables, rather than oil itself.

     BP goes on to say in the report that the world “may have already passed peak oil demand as fuel consumption may never recover from the pandemic-inflicted decline”.

     Yes, troubles with oil are universal, and not just off our shores.

 

US inventory data weighs

The latest inventory report from the Energy Information Administration showed another drop in crude oil supplies, this time by 4.4 million barrels, but still almost 15 percent higher than the five year average.

     Gasoline inventories dropped by 400 thousand barrels, and distillates increased 3.5 million barrels on 75.8 percent refiner capacity.

      US domestic production was reported at 10.9 million barrels a day, just 100 thousand barrels off pre-hurricane levels.

 

That’s it for this week!

 

Regards,

 

George Murphy

Twitter @GeorgeMurphyOil  

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