Hi to all,
Here’s what I have
for this week’s price changes, all data in:
*Heating and stove
oil to increase by 3.5 cents a litre.
*Diesel to increase
by 3.2 cents a litre, and...
*Gasoline shows an
increase of 2.5 cents a litre.
Market highlights
Hedge funds betting
on summer
It’s not just about
refiners having troubles moving product that has increased costs, and thus
prices for consumers, but word is out that hedge funds are starting to bet on
vaccine distribution that will help increase prices for oil and refined
products as demand picks up right along with Covid-19 vaccine availability.
Here in Canada, Prime Minister Justin Trudeau made an announcement that the
Pfizer vaccine will amount to 20 million doses by the spring at the time when
traditional run-ups in prices really starts to catch for gasoline, bringing
with it upwards pressure on prices.
To quote from the Reuters story,
“By the summer, the vaccine
should be widely provided and just in time for summer travel and I think things
are going to go gangbusters,” said David D. Tawil, co-founder at New York-based
event-driven hedge fund, Maglan Capital, and interim CEO of Centaurus Energy”.
Oil prices have increased $4 US a barrel over the last week.
Oil to
increase to $100 US?
It’s a
bold prediction, but again precipitated on word of further covid-19 vaccine
rollout as markets have turned their attention to the futures markets and
speculators play with the scenario of returning demand.
That means hopes for our offshore as oil will rebound-if the predictions from
Amrita Sen of Energy Aspects is right.
Speaking to Bloomberg, he said that while, right now, the markets have gotten
ahead of themselves with demand still weak, vaccine rollout has the promise of
increased demand in the second half of this year.
The only mitigating factor may very well be how many producers get back into
the market of production, and how fast the US production figures will be in
turning back to full production pre-covid.
US domestic production was recorded at 10.9 million barrels a day, falling from
13.5 million barrels a day the same time last year.
Also, Saudi Arabian production is due to pick up again, adding a million
barrels a day by the end of March, putting some pressure on growth.
US EIA
inventories
The
latest report from the Energy Information Administration, crude oil supplies
dropped by a million barrels last week.
Gasoline inventories were up by 4.3 million, while distillate inventories
remained unchanged from the week previous.
Refiner capacity was recorded at 82.3 percent and US domestic production
reported at 10.9 million barrels a day.
That’s
it for this week!
Regards,
George
Murphy
Twitter
@GeorgeMurphyOil
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