Price changes for Thursday, November 26th, 2020

 

Hi to all,

 

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

 

*Heating and stove oil to increase by 2.3 cents a litre.

*Diesel to increase by 2.6 cents a litre, and...

*Gasoline to increase by 1.5 cents a litre.

 

Market highlights

 

Covid-19 vaccines continue to power the markets

It’s all about “anticipated demand” as markets reacted heavily to more Covid-19 vaccine talk this week with the latest announcement by AstraZeneca.

     Oil responded as anticipated demand was seen with any vaccine availability with talk in the US that the vaccinations there could begin as soon as the first week in December.

 

Yellen as Biden’s Chair of the Federal Reserve

Joe Biden is not quite the US President yet, but his appointment of Janet Yellen as Chair of the Federal Reserve yesterday was also seen to power up the markets.

     Yellen was chair of the reserve appointed under Barrack Obama, but was not reappointed by Trump when her term expired in 2018. She headed up defense of the stimulus packages into the US economy during Obama’s tenure, so her appointment signals a possible return of a stimulus program in January to aid in any economic recovery.

 

Soon time to give back?

Watching spot prices this week made me turn my eyes back to March when markets collapsed and spot prices retreated on lower oil and demand from consumers.

     It may be slightly early, but spot prices are just five cents a litre lower than where they were “pre-collapse” in March for heating oil and six cents off the mark for gasoline.

      If I may be too presumptuous to ask, at what point do we as consumers get our money back from the approved increase given by the Public Utilities Board to carry NARL through this “crisis”? Surely, refining margins have improved markedly over the past two weeks, enough to “consider” a re-start of the refinery.

 

US inventory data

The latest inventory data shows yet another rare increase in oil inventories with crude stocks rising by 800,000 barrels.

     Gasoline increased by 2.6 million barrels, while distillates dropped 5.2 million barrels.

      Refiner capacity increased to 77.4 percent, up from last week.

      US domestic production was reported at 10.9 million barrels a day, up 400,000 barrels a day over the last week, possibly signalling a return of production.

       Although down by two rigs this past week, there were 310 rigs operating in North America, up from last month’s 293.

 

That’s it for this week!

 

Regards,

 

George Murphy

Twitter @GeorgeMurphyOil  

Price changes for Thursday, November 19, 2020

 

Hi to all,

 

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

 

*Heating and stove oils to increase by 2.2 cents a litre.

*Diesel shows an increase of two cents even, and...

*Gasoline shows an increase of 1.7 cents a litre.

 

Market highlights

 

Covid-19 vaccines make an impact

Pfizer and Moderna both have announced what they call effective vaccines for Covid-19, helping to spur upwards movement for oil prices.

     Ironic as it is with huge outbreaks of the virus, markets were looking for some optimistic news and the announcements of the vaccines over the last week certainly were enough to give just some support to oil prices, while markets also still fought off the downturn of demand for fuels brought on by uncontrolled outbreaks of the virus worldwide.

 

Alternatives: Quebec announces the inevitable

Quebec made a huge announcement this week that will see the end of gasoline powered vehicles in that province by the end of 2035, just fifteen years away.

     The province joins California, Ireland, France, Britain, Belgium, Norway and Germany as countries who have all set deadlines to any fossil-fuelled new vehicle sales as those emerging markets see electric/battery powered vehicles as the way of the future.

     In Norway, almost seventy percent of new vehicle sales in September were of electric vehicles.

 

OPEC+ still talking output levels

OPEC and non-OPEC oil producing nations are still talking about production cuts and still discussing when they will put more oil onto the markets, even as they all see their world oil demand slipping.

      Their production cuts agreement was to see two million barrels of oil a day added to the markets starting in January 2021, but they are now in discussions ahead of next week’s OPEC+ meeting next week to come up with a new deadline three to six months further down the road as the world has yet to see any form of economic recovery as a result of Covid-19.

       Meanwhile, no doubt discussions will also include Libya, whose oil output has reached 1.2 million barrels a day from last month’s 250,000 as a result of a UN brokered peace deal between warring factions there.

 

US EIA inventories

The latest report from the Energy Information Administration has been released, and it shows an increase of 4.3 million barrels.

     Gasoline showed a drop of 2.3 million barrels, while distillates also dropped 5.4 million barrels.

      Refiner capacity was recorded at 74.5 percent.

      Domestic production was reported steady at 10.5 million barrels a day.

 

That’s it for this week!

 

Regards,

 

George Murphy

Twitter @GeorgeMurphyOil  

Price changes for Thursday, November 12th, 2020

 

Hi to all,

 

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

 

*Heating and stove oil to increase by 1.8 cents a litre.

*Diesel fuel to increase by 2.2 cents a litre, and...

*Gasoline to increase by 1.4 cents a litre.

 

Market highlights

 

Pfizer’s treatment weighs

A new treatment for Covid-19 announced by Pfizer on Sunday helped power up oil and refined prices this week as the treatment, reported to be ninety percent effective, will allow for the economy to return to some form of normalcy sometime in the early part of the new year.

     Transportation-related industries like airlines and cruise companies saw stocks well up, and oil as well as refined up on future anticipated demand while the recovery happens.

      Oil prices rose sharply by $3.50 a barrel to sit at $43 US for Brent.

 

Biden win also raises oil-for now

A Biden win has also caused a rise with oil prices, with the industry more optimistic that the Biden presidency will bring in more regulations on fracking, and also turn attention to more alternatives.

     The fracking industry is what is behind the US meteoric increase in US domestic production of oil and gas, at least until the start of the pandemic.

 

Unique situation could develop for refiners

A unique situation where not enough refining will be available in the industry, leaving shortages of most fuels could develop in the North American markets if refineries stay closed even while the economy returns after covid-19.

     The US northeast has already lost well over 700,000 barrels a day of refinery production with at least four other refineries talking about possible closure if demand continues to falter. The latest refinery closure happened in Paulsboro, New Jersey last week.

      If the economy does recover quickly with the advent of the covid-19 vaccine, then demand could increase prices sharply to consumers, even though oil prices remain lower. However, any drop in demand from present levels may also continue with refinery closures.

     In a strategic sense, then it is easy to see why it may be really important to get a new operator for the North Atlantic facility in Placentia Bay.

 

US inventory data

The latest US EIA inventory data shows a drop in crude this week, losing eight million barrels. Gasoline was the only fuel to show an increase with 1.5 million barrels of stock added.

     Distillates dropped 1.6 million on 75.3 percent refiner capacity.

     US domestic production dropped 600,000 barrels to 10.5 million barrels a day.

 

That’s it for this week!

 

Regards,

 

George Murphy

Twitter @GeorgeMurphyOil  

Price changes for Thursday, November 5th, 2020

 

Hi to all,

 

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

 

*Heating and stove oils show a drop of a penny a litre.

*Diesel fuel shows a drop of 1.4 cents a litre, and...

*Gasoline shows a drop of 2.8 cents a litre.

 

Market highlights

 

More refineries pack it in

Three more refineries have shuttered this week, all reporting dropping demand and issues caused by alternatives and Covid-19’s onslaught.

    A refinery in Australia, Belgium and closer in New Jersey have all added their closures to a rapidly changing market.

    The Paulsboro, New Jersey refinery had a capacity of 180,000 barrels a day and will be converted to produce mostly lubricants and asphalt. Closures and reduced capacity has cost over 410,000 barrels of refining capacity between US east coast refiners during the Covid crisis and economic slowdown so far.

     PHB refiners also decided to dismantle a refinery with 330,000 barrel capacity in the wake of the world slowdown.

 

OPEC+ meets November 30th

OPEC and non-OPEC oil producing nations will meet again to discuss a potential extension to production cuts for another six months as the Coronavirus pandemic continues to impact demand and the recovery of the world economy.

     OPEC and other nations who agreed to output cuts some time ago were scheduled to add an additional 2 million barrels a day to the markets in January as part of the plan to remove a glut of supply of crude in the markets.

     In the meantime, Russia is bargaining with Saudi Arabia to extend the production cuts for three months instead of six months, ending the agreement in March, 2021 instead of January.

 

Libya production on the upswing

After a UN brokered agreement, Libyan oil production is back on the upswing, measuring 800,000 barrels a day over the last two weeks, and well up from the 250,000 barrels as measured last month. The OPEC member was faced with internal issues that saw a production shutdown as factions fought for control of oil exports.

     Libyan exports will add more oil to an already over-burdened market, putting some downwards pressure on Brent prices.

 

Alternatives:

Germany turning to more wind & Norway has too much electric

Norwegian hydroelectric production hit a point last week where they couldn’t put electricity into the grid, paying customers to consume the energy, while across the Denmark Strait, Germany has begun the road of adding at least 40 gigawatts of wind power to their grid by the year 2040.

      They presently have a total of 7.75 Gigawatts of wind-driven electricity capability, with more alternative energy being researched.

       According to RenewableUK, the wind energy industry worldwide has grown by 47 percent since January, and all in spite of the Covid crisis...

    

 

That’s it for this week!

 

Regards,

 

George Murphy

Twitter @GeorgeMurphyOil