Hi to all,
Here’s what I have
for this week’s price changes:
*Heating and stove
oil to rise by 7/10ths of a cent a litre.
*Diesel to rise by
6/10ths of a cent a litre, and...
*Gasoline shows an
increase of 2.5 cents a litre.
Market highlights
Demand outlook
becomes uncertain
Oil prices showed a
third day of retreat as the world economy looks on new waves of the virus
making it’s rounds across Europe. Countries such as France are still about 11
percent below demand where they were last February before the pandemic closed in, and
expectations are that another drop in demand is at hand as the third wave goes
through European countries.
Jet travel could be
up-in price
Jet fuel prices have
hit the same mark where they were pre-pandemic, but jet travel still remains
about 22 percent lower than the same time last year pre outbreak of the
pandemic.
Prices have risen along with speculators beliefs that the world is starting to
recover from the pandemic, amidst renewed concerns of a third wave in Europe.
As the world recovers, it is believed that more people will travel, especially
as vaccines make their way into the population, helping to increase prices well
ahead of world travel.
However, consumers may take the brunt of any increase in jet fuel costs as more
fuel surcharges will most likely be levied as a hedge against higher travel
costs as people get back to travel again.
A record price at
the pumps? Not yet.
Prices are forecast
to increase again this week by 2.5 cents a litre putting pump prices at an even
$1.46 a litre, but it’s not the highest prices we have seen in the St. John’s
area.
In
July of 2008, pump prices hit $1.49.3 a litre as oil rose to a record $147 US a
barrel, driven by high summer demand. Prices hit a record $1.49.6 in September
2008 and $1.48.1 in September 2005, but as a result of hurricane damage in the
Gulf of Mexico area that affected refinery capacity.
More
recently, St. John’s saw a high of $1.44.5 in May of 2018 as the run-up to the
summer driving season peaked.
In the
meantime, heating oil prices, while forecast to rise, will still be well below
the record of $1.25.6 a litre set in July 2008 when oil prices hit the record
of $147 US a barrel for Brent.
EIA inventory data
US Energy
Information Administration data from last week continues to show a slow return
of refiner capacity that could signal a peak in prices for gasoline-at least
for now.
Data indicates that refineries are now back to 69 percent of capacity from a
drop from 82 percent just three weeks ago.
Crude inventories rose by 13.8 million barrels as refinery inputs were affected
by outages.
Gasoline inventories saw a drawdown in stocks as supplies dropped 11.9 million
barrels. Distillates also dropped by 5.5 million barrels.
US domestic production of oil saw an increase of 900 thousand barrels as the US
pumped 10.9 million barrels a day, still well down from 13 million barrels a
day for the same time last year.
That’s it for this
week!
Regards,
George Murphy
Twitter @GeorgeMurphyOil
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