Price changes for Thursday, October 29th, 2020

 

Hi to all,

 

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

 

*Heating and stove oil to drop by 1.2 cents a litre.

*Diesel fuel to drop 1.5 cents a litre, and...

*Gasoline to drop by 1.6 cents a litre.

 

Market highlights

 

Covid drops oil again

Outbreaks worldwide of Covid-19 has again led to a oil price retreat the past few days as worldwide outbreaks have speculators worried about a drop in demand for oil and related refined products.

     Both Brent and WTI prices retreated about $2 US on covid fears.

     France has extended curfews and shut-ins to two thirds of its population  while Italy is also into an extended shut-in of its population. Other countries are considering shut-ins and closures which also affects the world oil price outlook.

 

Hurricane in the Gulf-again

Another hurricane is set to shut down oil production in the Gulf of Mexico again as tropical storm Zeta is projected to become Hurricane Zeta sometime today, or overnight.

     Hurricane Delta was successful in shutting in almost 90 percent of Gulf production, while Zeta has been projected to shut in close to the same amount, temporarily giving support to oil prices.

     Meanwhile, production had just been returning from Delta with the American Petroleum Institute reporting a crude oil build in the wake of the return of production.

 

NARL applies to the PUB for an increase

Papers have the tendency to be redacted these days...

Such is the case with North Atlantic Refining’s application for an increase in fuel prices after what it says where changes in the markets that have affected their operations and profitability.

     I had asked the PUB for information on the applied for increases, only to receive a redacted information for the increase with no information on the requested increase visible.

     Interesting to note that NARL and others received an allowable increase to wholesale and retail margins just this past July to their bottom line. That comes after an increase to margins in 2019 for heating fuels and propane.

     A quick look at the market news and information I have been able to attain out there is grim in some cases for most refined products as margins have been severely squeezed. That has led to some refinery closures worldwide and future closures to at least eleven more I have in Europe due to alternative energy policies and projected lower deamand.

 

US EIA inventory data

Crude oil inventories dropped by a million barrels last week, while gasoline inventories climbed 1.9 million barrels as demand was seen to slip with rising covid cases affecting it.

     Distillate inventories dropped 3.8 million barrels on lower refinery capacity of 72.9 percent.

     US domestic production was reported at 9.9 million barrels for the same timeframe that production was shut in the Gulf of Mexico.

 

That’s it for this week!

 

Regards,

 

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, October 22, 2020

 

Hi to all,

 

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

 

*Heating and stove oil show no changes this week.

*Diesel fuel shows an increase of 3/10ths of a cent a litre, and...

*Gasoline shows a drop of one cent a litre.

 

Market highlights

 

OPEC and OPEC+ meetings

OPEC and non-OPEC countries who agreed to production cuts several months ago met again this past week and agreed to -nothing.

     No decision on whether to increase output in the face of the covid-induced world economic slowdown was reached in two days of talks.

     OPEC+ members are afraid that any cut to production would hinder any economic recovery, while any addition to production would hurt oil prices in the face of world oil demand and consumption, hurting the various countries treasuries who have become heavily dependent on oil revenues.

     Saudi Arabia seems to be the most dependent on them , with the Saudi’s wishing for anything $50 US a barrel and better.

     The country was said to be over $29 billion in debt during the second quarter of 2020 alone because of low oil.

 

Twenty years ago this winter...

Go back to the fall/winter of 2000-01 and you may very well find the root of oil’s problems today.

    That fall and winter was the heaviest in recent memory, but was also marked by skyrocketing energy prices worldwide that saw countries, particularly in Europe, answering the call from their residents to address higher energy costs that put a lot of people on the border of energy starvation.

     In Canada, it was marked by a truckers strike because of high diesel prices, fuel surcharges and the start of energy rebate programs both federally and provincially.

    Government’s of the day sought to change it up and look for other sources of energy so they wouldn’t be so oil dependent, and the subsidization of alternate forms of energy research has gained speed ever since, to the point there may be no turning back, with carbon emission agreements now in place worldwide.

     My, how the world has changed...and in quick order!

 

Remember this word: Perovskite

It may very well be the next biggest alternative energy breakthrough, but the use of the mineral in the manufacture of solar panels may well prove to increase the performance of solar panels. That’s important because the performance brings down the costs of the energy produced by the panels.

     According to the US National Renewable Energy Laboratory, perovskite solar panels are 66 percent efficient, well up as compared to older panels running at 25 percent efficiency.

     Some are calling it a game-changer that may very well soon take out coal as an energy source.

      Perovskite was first discovered in the Ural Mountains of Russia in the mid 1830’s.

      https://oilprice.com/Alternative-Energy/Solar-Energy/Another-Major-Breakthrough-For-Solar-Energy.html

 

US EIA inventory data

Latest inventory results are in, and oil supplies have dropped again, this time by 3.8 million barrels.

     Gasoline also dropped by 1.6 million, while distillates were also down by 7.2 million barrels.

     US domestic production also went lower as producers still haven’t turned on the spigots after Hurricane Delta blew through the Gulf of Mexico.

 

That’s it for this week!

 

Regards to all!

 

George Murphy

Twitter @GeorgeMurphyOil  

Price changes for Thursday, October 15th, 2020

 

Hi to all,

 

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

 

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

*Diesel to increase by 1.4 cents a litre, and...

*Gasoline to increase by 1.2 cents a litre.

 

*A reminder that we are now into winter blending for distillate fuels now, so the numbers there can be off somewhat for now until springtime when the blend is lifted on the return of warmer weather.

 

Market highlights

 

World Energy Outlook 2020 released from IEA

The International Energy Agency has released its 2020 world oil outlook has been released.

     It gives three different scenarios for oil and demand growth, all forecast under Covid-19 conditions, that gives us a snapshot on what could be for the future of oil.

     In all scenarios, alternative energies take centre stage, particularly solar energy which it predicts, has become the cheapest form of energy available in most countries that the world now knows.

      Hydropower remains the most accessed, but it is also followed by offshore and on shore wind power.

      The report also states that a robust investment in electrical infrastructure will be required if countries are to take full advantage of these alternate energies.

      On the oil side, it states that demand will not recover for oil until 2023 and that demand growth will grow modestly until 2030 at which time demand growth for oil reverses.

       But no real sign of dropping demand growth is realised unless government policies change.

Release here: https://www.iea.org/news/world-energy-outlook-2020-shows-how-the-response-to-the-covid-crisis-can-reshape-the-future-of-energy

Report link here: https://www.iea.org/reports/world-energy-outlook-2020#

 

OPEC report shows dropping demand

OPEC also released its monthly oil report today, also reflecting a drop in world demand, mainly by OECD (Organization for Economic Cooperation and Development) and non-OECD countries taking the drop of 800,000 barrels  a day, projecting demand in 2021 at 96.84 million barrels a day from today’s 90.3 million barrels a day, up 6.5 million barrels.

     Its report goes on to state that world demand pre-pandemic was recorded at 99.7 million barrels a day, so any growth will still be well off from the normal.  

 

US EIA inventories

The latest report on US inventories is out and it shows a modest build in crude oil inventories of 500,000 barrels.

     Gasoline dropped 1.4 million barrels while distillates dropped a million.

Refinery capacity was up to 77.1 percent overall with 8.89 million barrels a day supplied to the US markets against 9.46 supplied over the same time period for last year, a difference of just 570,000 barrels a day.

 

That’s it for this week!

 

Regards,

 

George Murphy

Twitter @GeorgeMurphyOil  

Price changes for Thursday, October 8th, 2020

 

Hi to all,

 

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

 

*Heating and stove oils to drop by 2/10ths of a cent.

*Diesel to drop by 1/10^th of a cent, and...

*Gasoline to drop by 2.4 cents a litre.

 

Market highlights

 

North Atlantic Refinery to shutter?

Word is that the North Atlantic refinery is due to close its doors after operating almost uninterrupted since 1986.

     Irving supposedly walked away from the deal to buy the refinery that was said to be close, with workers I know being told to expect a return to work by early October.

     It was not to be.

     A company called “Origin International” also made approaches to purchase the refinery in July, but nothing has been heard from them yet, other than a possible statement in the coming days.

     While refineries around the world have begun to shut their doors as a result of Covid-19 and unending price wars, it could also be said that alternative energies have made a huge dent in decisions for major refiners to remain in operation.

      But the sale of North Atlantic was important, if not to the Irving’s who, when you look at it, may possibly have been given “conditional sale” conditions that had to be met by the Federal Competition Bureau before any purchase could happen.

      In my mind, the sale of the refinery could have led to “too much concentration in the marketplace” and consumers and possibly pricing could have been at risk, not just here, but anywhere in eastern Canada that would be serviced by the refinery.

 

Libya and Venezuela coming back online could see oil lower

A closely brokered peace deal between rival factions in Libya has resulted in the first exports of crude oil from the North African country in six months.

     Shipments measuring 290,000 barrels a day over the last week have hit the waves and are mostly bound for European ports of call.

     In the meantime, Venezuela has also started exporting some crude, particularly in Iranian tankers as Venezuela remains under a heavy watch by the US.

     690,000 barrels a day left ports there in September, up from 503,000 the month previous.

 

US inventory data

US crude oil inventories as reported by the US Energy Information Administration this week, dropped another two million barrels, while gasoline inventories were up just slightly by 700,000 barrels.

      Distillate inventories were reported down by 3.2 million barrels on 75.8% refiner capacity.

      US domestic production was recorded at 10.7 million barrels a day, down 1.7 million from the year earlier.

 

That’s it for this week!

 

Regards,

 

George Murphy

Twitter @georgemurphyoil