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
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