Price changes for Thursday, April 29th, 2021

 

Hi to all,

 

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

 

*Heating oil, stove oil and Diesel all show a drop of 8/10ths of a cent a litre, and...

*Gasoline shows a drop of two cents a litre.

 

Market highlights

 

OPEC+ meeting cancelled

OPEC+ decided to cancel their next meeting on the 28^th as the Joint Technical Committee met ahead of the meeting to discuss the potential for cancelling any additions to oil production by the group.

     An announcement by the group earlier today did not see any potential drop in demand as affecting its policy of adding oil to the world market starting in May with the addition of 350,000 barrels from the OPEC+ group of 23 ministers and 250,000 barrels from Saudi Arabia.

    Keep in mind however, that both Japan and India are experiencing outbreaks of Covid-19 that could force the OPEC+ group to revisit the additions to production.

     The next meeting of the group is scheduled for June 1^st.

 

Granholm: Diversify!

US Energy Secretary Jennifer Granholm has warned major oil producers that they must diversify or risk becoming the next Kodak or Blockbuster Video of the energy world.

     Granholm was speaking at a special event organised by Politico last week when the message was sent out to the industry that they can no longer keep oil alone in their energy mix, and that they must diversify to other areas of the energy world or risk closure. She invited energy companies to join the green transition or be left behind as the world turns to lower carbon.

 

US EIA inventories

The latest inventory data from the Energy Information Administration shows a gain in crude stocks of 600,000 barrels while gasoline also increased by 100,000.

     Distillate stocks fell by 1.1 million barrels.

     US refinery capacity was steady at 85 percent again this week as refined products were closely in balance with inventory results.

     US gasoline  supplied to the markets was 9.1 million barrels a day against 5.3 million barrels a day for the same timeframe last year.

     US domestic production was recorded at 11 million barrels a day.

 

That’s it for this week!

 

Regards,

 

George Murphy

Twitter @GeorgeMurphyOil  

Price changes for Thursday, April 22, 2021

 

Hi to all,

 

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

 

*Heating and stove oil to increase by 2.6 cents a litre.

*Diesel to increase by 2.8 cents a litre, and...

*Gasoline to increase by 2.5 cents a litre.

 

Market highlights

 

Happy anniversary

It was one year ago yesterday that a record low price for West Texas Intermediate was recorded as the demand for oil crushed demand and prices for WTI went negative.

     Contractors and speculators couldn’t get rid of oil bought under contracts before the month end and storage fell sharply as covid-19 hit the oil industry and demand for refined products was crushed.

     April 20^th, 2020 saw WTI go to a negative $37 US a barrel as speculators even went as far to lease storage space off the US strategic reserve for the resulting glut from the demand crush.

     It’s been a long way back, but WTI is now averaging $63 US a barrel and demand is expected to increase as vaccinations worldwide continue to slowly ramp up.

 

Oil to trade higher?

It’s not the first time I’ve heard this possibility, but world oil trading company Vitol Group is expecting a major increase in world demand for oil and oil products as the world emerges from the pandemic.

     Prices have been recovering since last year’s fall in prices and the ensuing demand crunch that followed. Again however, the prospect of any recovery is hinging on possibilities of other breakouts of the covid-19 virus along with its variants that have cause for concern.

     Vitol Group expects that demand will see a sharp recovery as we get further through 2021 and into 2022 with demand increasing from today’s levels by another seven to eight million barrels a day by the end of 2022.

     Demand for refined products like jet fuel are still lagging however, and will still average 1.5 million barrels a day lower than normal by year end.

     Vitol expects oil to average $70 to $75 US a barrel by year end on rising demand.

 

Gasoline shortage?

I am getting notes that more than a few stations in the northeast Avalon area of the province have been selling premium gasoline for regular prices as deliveries of regular gasoline have been non-existent.

    Not that that deal is a bad thing, but...

    Reports range from South River to Costco where stations have been doing that. Again, not the first time I have seen that happen as deliveries may be well up with increasing demand.

   

US EIA inventories

The latest data from the US Energy Information Administration last week again showed a draw on crude inventories as stocks fell by 5.9 million barrels.

     Gasoline inventories rose by 300 thousand barrels and distillate stocks dropped by 2.1 million barrels.

     Refiner capacity was reported at 85 percent.

     US domestic production increased by 100 thousand barrels to eleven million barrels a day.

     Interesting to note that gasoline supplied to the US markets last week was a rough 8.9 million barrels a day, while the same time last year was a recorded low of 5.08 million barrels a day at the height of the demand crush.

 

That’s it for this week!

 

Regards,

 

George Murphy

Twitter @GeorgeMurphyOil  

Price changes for Thursday, April 15th, 2021

Hi to all,

 

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

 

*Heating and stove oil shows no change to prices.

*Diesel shows an increase of 2/10ths of a cent, and...

*Gasoline shows a drop of a penny a litre.

 

Market highlights

 

Oxford Institute for Energy Studies: No oil supercycle

The Oxford Institute has come out saying not to expect an oil supercycle of prices ranging to $100 a barrel.

     The energy studies organisation joins with the International Energy Agency in it’s thinking that lower demand with a slower than expected economic recovery worldwide, a slower vaccine rollout, and an increase in shutdowns due to covid are cited as reasons why.

     They go on to cite that oil prices will remain anywhere between $59 and $69 US for the rest of 2021 and 2022.

 

Come by Chance refinery sale close?

As yet unconfirmed, but sources are telling me that the possible sale of the Come By Chance refinery could be close.

     Holding up any agreement is the sale of the tank farm complex and retail operations owned by Silverpeak and North Atlantic Refining.

     I have also heard that the potential sale would involve production from the refinery amounting to 40,000 barrels a day of crude with the remainder being oil from recycling and renewable manufacturing of oil products.

    As late as February, Reuters reported on the potential sale of the refinery between Cresta Fund Management, North Atlantic Refining Limited and Silverpeak.

    The Newfoundland and Labrador government gave NARL $16.6 million to keep the refinery in warm idle mode.

    The refinery has been shuttered since last March when demand for product crashed due to Covid-19 that shuttered shuttered over 1.7 million barrels of production a day worldwide with more closures, shutdowns and conversions to renewable fuels in the mix.

    Possibly delaying any sale of the refinery is a third wave of covid-19 worldwide that promises to bring lower demand along with it.

    Also, as late as February the International Energy Agency said that the world remains with too much refining capacity with 102 million barrels a day and a world market that requires 80 million barrels in 2021.

 

US EIA inventories

The latest inventory report from the Energy Information Administration showed another draw on inventories as crude supplies dropped 3.5 million barrels.

     Gasoline inventories increased by four million barrels and distillates also climbed by 1.5 million barrels.

     Refiner capacity was recorded at 84 percent.

     US domestic production was reported at 10.9 million barrels a day.

 

That’s it for this week!

 

Regards,

 

George Murphy

Twitter @GeorgeMurphyOil   

Price changes for Thursday, April 8th, 2021

 

Hi to all,

 

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

 

*Heating and stove oil to increase by 3/10ths of a cent a litre.

*Diesel shows an increase of 2/10ths of a cent, and...

*Gasoline shows an increase of just 6/10ths of a cent a litre.

 

Market highlights

 

OPEC+ agrees to output increases

OPEC and other producing nations agreed to increases in production with the easing of cuts at the last meeting of OPEC and OPEC+ countries.

      Together, both groups will boost production by almost 600,000 barrels a day starting in May month, then adding another 600,000 in June and the balance of Saudi Arabian cuts in July.

      Still short of the total cuts of 5.6 million barrels, by July the world should see the addition of close to two million barrels a day added to word production.

      OPEC+ anticipates that demand in the second quarter of this year will increase enough to absorb the increases to production, but waiting in the wings is the prospect of new outbreaks of Covid-19 an its variants which may force the group of oil producing nations to re-adjust their figures to account for any slippage in world demand by the summertime.

 

US domestic production set to increase

While the Covid year of 2020 and the collapse in demand just about over, US domestic production of oil has been seeing steady increases in production recently aided by production cuts worldwide, and a steady increase in oil prices.

     US domestic production hit 11.1 million barrels a day in the US Energy Information Administration’s latest inventory reports, with production rising from a low of 9.7 million barrels a day just two months ago.

     The latest Baker Hughes rig count shows another 13 rigs back to work in the US last week, showing that small producers in the US shale fields can afford to operate with prices around $60 US a barrel.

     Canadian rig counts were down last week by 12 because of the spring thaw, but up 28 rigs over the same timeframe last year.

 

US EIA inventories

The latest report from the Energy Information Administration shows a drawdown of crude stocks last week with crude dropping 900 thousand barrels, while gasoline stocks also dropped 1.7 million barrels.

     Distillate supplies were up 2.5 million barrels as warmer weather weakened demand for that group of fuels.

     Refiner capacity was recorded at 83.9 percent, the highest this year and since the shutdown after the Texas weather events almost two months ago.

 

That’s it for this week!

 

Regards,

 

George Murphy

Twitter @GeorgeMurphyOil