Tuesday, March 09, 2021

Price changes for Thursday, March 11th, 2021

 

Hi to all,

 

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

 

*Heating, stove oil and Diesel all show an increase of 2.2 cents a litre.

*Gasoline shows an increase of 2.3 cents a litre (5.6 on summer gasoline)

 

I don’t know if summer gasoline is on the markets yet, so that’s why I’m putting it there, but not going with it this week. I believe it comes into effect at the end of the month.

 

Market highlights

 

Oil still rising. Refined prices too.

They’re not at their old record highs ever recorded yet, but the after-effects of the Texas outages two weeks ago are readily apparent in the latest EIA report, and that’s reflective of the same pricing we saw back when Hurricane Katrina hit back in 2005.

     The EIA reported refinery outages that amounted to close to five million barrels a day in production removed from the markets that has continued to drive up prices at the pumps.

     In 2005, refinery outages amounted to a loss of production of one third of US refining capacity (5.6 of 17 million barrels)and took a daily production of 2.2 million barrels a  day of oil off the markets.

     Prices during the week of Katrina hit $1.48.1 a litre in St. John’s with oil at $65 US a barrel. The all-time record here was $1.49.6 set in September of ’08 when hurricanes again ravaged to Gulf of Mexico.

     The Texas weather events of two weeks ago now took almost the identical refining capacity off the markets with the US EIA reporting that capacity dropped from 82 percent to 56 percent during the shutdown and removed temporarily about three million barrels a day in crude oil production offline.

     The next EIA report is due on Wednesday at noon and will give a better indication of how long these prices will last, and how much capacity will have returned-if any this week.

 

OPEC delays increases to production

OPEC, in a surprise move to most, delayed any increases to quotas and production by announcing that increases will be held back until April month, instead of March, leaving oil prices to go nowhere but up.

     Oi prices briefly hit $71 US as another attack against the Ras Tanura facilities in Saudi Arabia also temporarily rattled the markets.

     Expectations were that Saudi Arabia would begin adding their million barrel per day cut back into the markets.

     The only exceptions were to allow Russia and Kazakhstan to increase daily production to meet their won domestic needs.

     On average this week, oil prices increased by $5 US a barrel mainly as a reaction to the OPEC move.

 

EIA inventory report

As expected, the latest EIA inventory report reflected the damage caused by the Texas weather events.

     Latest figures show an increase in crude oil inventories adding a record 21.6 million barrels a day as refinery capacity dropped to 56 percent due to refinery outages. Crude supplies went up as a result.

     Gasoline inventories dropped 13.6 million while distillate inventories dropped 9.7 million barrels as refineries were reported offline.

 

That’s it for this week!

 

Regards,

 

George Murphy

Twitter @GeorgeMurphyOil  

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