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 20th, 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
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