Hi to all,
Here’s what I have
for this week’s price changes:
*Heating and stove
oil to drop 4.8 cents a litre.
*Diesel to drop 5.1
cents a litre, and...
*Gasoline shows a
drop of 6.7 cents a litre.
Market highlights
Unsteady markets
Both West Texas
Intermediate and Brent crude were sent crashing down to reality again today as
markets continued to worry over demand concerns as most of Europe and some
parts of North America experienced a third wave of the Covid-19 pandemic.
Oil has been given a hard ride over the past year leaving speculators and
consumers reeling at times as oil experienced a wave of crash then recovery,
and back to crash again as demand concerns weighed.
In spite of OPEC announcing earlier this session that it would continue with
their line of production cuts until the end of April, the news of covid
shutdown through Europe was enough to question demand.
International
Energy Agency report
A report from the
International Energy Agency late Thursday also sent oil markets into a downward
direction with the IEA announcing that due to lower demand recovery and
climbing alternative energy vehicle use, oil would not experience a
“supercycle” of higher oil prices and that transportation fuels probably have
come close to their peak of usage.
The report should be a signal that alternative powered vehicles including
electrics and hydrogen powered and hybrids will be a force to be reckoned with
in the years ahead.
Does the PUB need a
redo?
Last week’s
interruption by the Nova Scotia UARB sent gasoline prices south with a drop at
the pumps of eight cents a litre a day after their regular price setting that
saw prices increase 1.2 cents a litre reflected of the markets in the
intermediate days before.
The same drop was reflected in my numbers two days after our own price setting,
however, there is no interruption of prices within the regulations except in
extraordinary circumstances such as we saw when gas prices and other fuels drop
by as much as 14.4 cents a litre.
But what is the definition of an “extraordinary situation”?
Changes
in the markets could very well be a financial issue for consumers as well as
retailers of fuel. A mechanism where we see such radical changes to the numbers
over a short period such as we have seen the last two weeks should be enough to
address concerns by consumers as well as retailers who may be hurt by the
sudden rise or fall in prices.
It may be time for a review of the procedures by which the PUB sets prices from
week to week, and re-introduce the use of a interrupter clause that could be
used in such situations.
The PUB has been setting prices since 2004 when the Williams administration
closed the independent price regulators’ office in Grand Falls-Winsor and moved
the oversight of prices to the PUB in St. John’s.
EIA inventories
The latest report
from the Energy Information Administration showed a build in crude oil of 2.4
million barrels, while gasoline also saw an increase of 500 thousand barrels.
Distillate inventories gained 300 thousand barrels, while refiner capacity also
showed another increase to 76.1 percent from 69 percent the week previous.
US domestic production was reported at 10.9 million barrels a day last week,
unchanged from the week previous.
That’s it for this
week!
Regards,
George Murphy
Twitter
@GeorgeMurphyOil
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