Hi to all,
Here’s what I have for this week’s price changes:
*Heating and stove oil to increase by 2.9 cents a litre.
*Diesel to increase by 3.2 cents, and...
*Gasoline shows an increase of 4.4 cents a litre.
Markets have been responding all week to the Saudi surprise oil production cut immediately after last week’s OPEC+ meeting where Saudi Arabia announced a further cut to their own production of an added one million barrels a day.
Further support for higher oil was also featured in last week’s Energy Information Agency report which showed a huge drop in crude oil inventories of almost eight million barrels.
Oil prices have been well up after the meetings with oil prices rising another $5 US a barrel over the intervening timeframe. Expectations of a tightening oil supply situation has helped increase prices as the surprise cut is said to be well above expectations of the markets.
Brent prices closed close to $57 US a barrel today, rising from $51.80 US last Tuesday.
OPEC compliance drops
According to Petro-Logistics, OPEC+ compliance amongst its members fell to just 75 percent after some countries were seen to break away somewhat from imposed quotas ahead of last week’s OPEC+ meeting, but you couldn’t tell by oil’s reaction as figures were only released today.
Other companies have had higher OPEC+ compliance numbers the past few days with numbers in excess of 75 percent.
OPEC and non-OPEC members agreed to a 9.7 million barrel per day cut several months ago, but added more oil to the markets over the intervening months.
Total cuts now amount to 7.7 million barrels a day amongst members as of December.
Refiners may still pay a price
According to reports from the International Energy Agency, worldwide refinery capacity is still over 20 million barrels over the needed capacity worldwide.
Over 1.7 million barrels a day of refinery production capacity has been permanently closed worldwide since the start of the pandemic and it remains to be seen if it will ever return based on how alternatives have been impacting the markets.
With countries now putting timeframes on the end of new fossil fuel vehicle sales by 2030 to 2040, it now remains in doubt whether any capacity will return, or any refineries to re-open again within the highly competitive refining markets.
US EIA inventories
The latest numbers are out from the US Energy Information administration.
Crude supplies showed a drawdown of 8.1 million barrels, while gasoline inventories saw an increase of 4.5 million in the week after Christmas.
Distillates also saw an increase of 6.4 million barrels.
Refinery capacity was recorded at 80.7 percent, while US domestic production was steady at 11 million barrels a day.
That’s it for this week!