Tuesday, February 02, 2021

Price changes for Thursday, February 4th, 2021

 

Hi to all,

 

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

 

*Heating and stove oil to increase by 1.7 cents a litre.

*Diesel to increase by 1.6 cents a litre, and...

*Gasoline to increase by 1.8 cents a litre.

 

Market news

 

Markets continue to tighten supplies

Crude oil prices continued to increase this week as markets were seen to tighten supplies as Saudi Arabian cuts to production have started, with the Saudi’s promising to cut an additional one million barrels of production a day that started February 1st.

     However, markets have been watching the possibility of another developing situation where the Saudi’s may lose market share as others jump in to fill the need left open for oil by the Saudi cut. Other oil producers like Guyana and US shale producers could be set to increase production to fill the gap immediately left by the OPEC country that left the markets with a shortfall of oil for the next two months.

     The Saudi’s are set to keep production down until the end of March 2021.

 

Goldman Sachs increases estimates

Goldman Sachs expects oil consumption to have a robust rebound to at least 100 million barrels a day by the end of August, back near levels not seen since the start of the pandemic.

     According to Goldman Sachs, oil supplies faced a deficit of close to 2.5 million barrels a day in the last quarter of 2020 that helped set prices for crude in the upwards direction. The only factor that could limit to forecast on future demand are new outbreaks of Covid-19.

 

US crude oil inventory report

The latest Energy Information Administration inventory report showed another drop in crude oil inventories last Wednesday as refiners continued to maintain capacity levels above the eighty percent mark for the fifth week in a row. Capacity was reported at 81.7 percent that maybe indicative of slowly returning demand.

     Gasoline inventories were reported up by 2.5 million barrels, while distillates were down 800 thousand barrels.

     US domestic production was down 100 thousand barrels a day to 10.9 million barrels a day.

 

That’s it for this week!

 

Regards,

 

George Murphy

Twitter @GeorgeMurphyOil  

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