Hi to all,
Here’s what I have
for this week’s price changes:
*Heating and stove
oil to drop by 6/10ths of a cent.
*Diesel to drop by
7/10ths, and...
*Gasoline shows an
increase of 7/10ths of a cent.
Market highlights
Saudi’s surprise
OPEC schedules
meetings that are meant to come to some form of consensus on the world
regulation of oil supplies, but this time around was different.
With OPEC ok with a modest increase in production to world supplies from Russia
and Azerbaijan allowed an increase of 65,000 barrels a day each to meet
domestic needs, Saudi Arabia announced that it would cut production by another
one million barrels a day starting in February.
While that announcement lit a fire under crude prices, outside conditions may
prove to be detrimental to the Saudi move.
With
US domestic production offline, it has been given a good reason for a sharp
return in the coming weeks from it’s current low of 11 million barrels a day.
My guess is a timeframe of a couple of weeks where we will see a measurable
return of US domestic production to meet the shortfall.
After all, the spigots were only recently turned back while Covid rages, and
could be turned back on in short order to meet the shortfall.
Year in review Part
II
Oil continued a
downturn as prices hit rock bottom. But a turnaround was soon to take place in
oil prices’ slow recovery with the first announcement of a covid-19 vaccine by
Oxford University, soon to be followed by announcements from Pfizer and
Moderna. Oil was given a spark as anticipated demand was the prop the markets
were looking for to begin July.
August saw “peak oil” announcements from BP and Conoco Philips, with BP
announcing that oil may have already peaked and oil demand dropping to 55 million
barrels a day by 2050.
Hurricane’s Laura and Zita both create production shutdowns and temporary
disruptions to US domestic production numbers.
September saw the provincial government announce enhancements to the provinces’
offshore drilling program with money to supplement any programs that would be
undertaken by participants.
September
25th also saw the federal government give $320 million in aid to the
oil industry through the province that formed a reason why the Oil and Gas
Recovery Task Force was formed. That announcement would be a key cornerstone of
how best to spend the money as part of the mandate of the task force.
The
announcement of the Oil and Gas Recovery taskforce with terms of reference will
be due to report back to government by the end of January 2021.
Oil
prices continue a slow rise to $42 US by the middle of October with further
word of the coming availability of the Covid vaccines to the population.
Locally, the North Atlantic Refinery applied for an increase through the Public
Utilities Board as an emergency measure to keep retailers in business as they
had, in essence, had to rely on imports from outside of the province.
November saw increasing oil prices as release dates are set for the first
Pfizer and Moderna vaccines to the world market, while in Quebec, the
government there announces a ban on new fossil fuel vehicle sales will come
into effect in 2035 with the province joining California as the other
jurisdiction bringing in the law to combat carbon and climate change.
Three
more refineries close with the closest in New Jersey. Closures total 14 in
North America and Europe with many more throttling back on production or
converting to other fuel types.
December saw Brent rebound to break $50 US a barrel on continuing hopes of the
covid-19 vaccine and future anticipated demand.
Locally, support for both the Hibernia platform and a continuation of their drilling
program, and a support program for the West White Rose projects were announced.
US EIA inventory
data
The EIA is
reporting a drop of 6.1 million barrels of crude up to December 25th
and a drop of 1.2 million barrels of gasoline stocks as a result of Christmas
travel and elevated demand.
Distillate stocks increased 3.1 million barrels on 79.4 percent refinery
capacity.
US domestic production was recorded at 11 million barrels a day, unchanged from
the week previous.
That’s it for this
week!
Regards,
George Murphy
Twitter
@GeorgeMurphyOil
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