Price changes for Thursday, July 26, 2016

Hi to all,

Here's what I have for price changes for this week!

*Heating and stove oils show a slight drop of 8/10ths of a cent a litre....
*Diesel fuel shows a slight drop as well of 6/10ths of a cent a litre, and...
*Gasoline is also down this week, but just by 3/10ths of a cent a litre.

Market highlights

Crude drops again
      Monday this week saw another drop in crude oil as market analysts have a renewed fear over crude oil over-supply continues to sway oil prices.
Latest API inventory data from the industry-led group shows a less than expected drawdown on crude oil inventories.
      No surprise here, but the real confirmation may come from the US Energy Information's Administration's inventory data when it is released tomorrow noon our time. Another reported build in inventory, or smaller than expected drawdown on inventories of crude, may very well extend the recent slide in crude oil prices.
     Weak demand for gasoline and indications of a huge surplus in gasoline and distillate supplies has also played in to the latest drop in crude oil prices.

Canadian dollar moves lower
      With lower oil comes a lower Canadian dollar, with the Canuck Buck dropping a full two cents against the US greenback over the past three days since oil's slide.
      The Canadian dollar was measured at $1.3209 against the US dollar at noon today.

Rig counts up again
      The US rig count was up again last Friday, and it is probably a huge indicator of just how robust the smaller producers have become in the face of lower prices. The rig count rose another 15 rigs last week, up again for the seventh week in a row.

That's it for this week!

George Murphy
Twitter @GeorgeMurphyOil

Price changes for Thursday, July 21, 2016

Hi to all,

Final numbers for this week are actually not far off from last night's posting. Here's what I have:

*Heating and stove oils show a drop of 2.1 cents a litre....
*Diesel fuel shows a drop of 1.5 cents a litre, and...
*Gasoline shows an increase of 7/10ths of a cent a litre.

Market highlights

Gasoline to drop next week?
     An after hours American Petroleum Institute inventory report sent gasoline futures lower as the industry report showed a build in gasoline inventories that lends further support to weaker demand for gasoline than industry speculators thought. When the industry starts sending out signs of weak demand, you know there's a "problem" with demand.
     Inventory reports out of the US Energy Information Administration in recent weeks has been showing the same sign of weak summer demand that has played well into lower prices (except here because of the added tax).

Distillate drops ahead of September buying contract
     Distillate prices in the trading markets are down again this week, ahead of the September buying contract. Inventories of heating, stove oil and diesel fuels are all well above last years levels for this time of the year and show promise of potentially lower prices for those fuels to consumers if the trend keeps going.
     Stocks are presently about twelve million barrels ahead of last year's mark. With refinery capacity close to 93 percent, I expect there to be more additions to inventories of distillate that will mitigate any increase to consumer prices...At least for the time-being!

That's it for this week!

Regards,

George Murphy
Twitter @GeorgeMurphyOil

Price changes for Thursday, July 14, 2016

Hi to all,
Here's what I have for this week's price changes in what has been a very volatile week!

*Heating and stove oils show a drop of three cents a litre....
*Diesel fuel also shows a drop of three cents a litre, and...
*Gasoline shows a drop of 3.4 cents a litre on the way.

Market highlights

*Gasoline inventories remain high
       As reported by the US Energy Information last week, "product supplied" versus "product used" remains about 250,000 barrels above where refiners feel the numbers should be to maintain prices. The result played heavy in the markets last week as demand was seen to be weak and inventories for gasoline will remain high through the summer.
       Gasoline inventories are a strong 21 million barrels above last year's numbers. Refiner capacity is close to 92 percent as they just keep refining!

*Early winter outlook
       While the US EIA reports inventories for gasoline up, distillate inventories are also up, but not to the same degree. As of last week, distillate inventory is just above 11 million barrels for the same timeframe last year, and that number may be important to see maintained in the long term.
If inventories remain above the seasonal we are seeing this week, it may prove that the industry may be able to keep up with any anticipated demand over the winter, and this may keep prices relatively steady as compared to last winter.
       Any drop in refiner capacity or uptick in demand for distillate will, however, impact inventories and may help to increase prices. But for now, it's looking like "steady as she goes".

I'll leave it there for this week!

Regards,
George Murphy
Twitter @GeorgeMurphyOil

Price changes for Thursday, July 7, 2016

Hi to all,

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

*Heating and stove oils are up by 1.2 cents a litre....
*Diesel fuel is up by a penny even, and...
*Gasoline shows a penny down.

Market highlights

*US drilling rig count rises
        The US drill rig count rose again last week, partly sparking the markets to look again at rising oil prices and sparking fears that the US domestic production has hit a level where they can show clear profits at lower oil prices.
        The count rose by eleven rigs last week, with news hitting the markets only today as markets remained closed over the US Independence Day holiday.
        With rig counts rising again, the possibilities of added oil to US domestic supplies saw oil prices again in retreat, falling close to five percentage points from Friday's market close.

*Gasoline demand takes a tumble
        As predicted here a few weeks ago, US demand for summer gasoline has taken an "expected" shift downwards in a late report from the US Energy Information Administration.
        Last week's inventory report saw the markets force gasoline prices on the New York Mercantile Exchange to "freefall" by close to eight cents a US gallon as reality of rising production and rising inventories of gasoline midway through the US summer driving season bites home.
        Latest trends in the US reports show refinery capacity rising and exceeding US consumption of gasoline by close to 250,000 barrels a day and leaving inventories over 20 million barrels over the same timeframe from last year.
        The sell-off was on and oil prices paid for it.

*Don't expect big changes...
        While both oil and gasoline prices were down today, don't expect big changes to prices this week as a few days trading are needed to bring prices down. The latest hit on the markets will most likely play into prices next week, if the downward trend continues.

That's it for this week!

Regards,

George
Twitter: @GeorgeMurphyOil

Price changes for Thursday, June 30th, 2016

Hi to all,

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

*Heating and stove oils show a drop of just 6/10ths of a cent.
*Diesel fuel shows a drop of a half penny, and...
*Gasoline shows an added 1.9 cents a litre.

Market highlights

HST increase this week!
*Remember that this week's increase at the pumps will also see price changes that include an extra 2% increase in the HST, going from 13% to 15%. The increase MAY be reflected in this Thursday's price setting, or there will be a second increase to follow to account for the adjustment directly on July 1st.

Venezuela turmoil takes away barrels
*While unrest in Venezuela continues, crude output from the South American oil giant continues to slip as prices show little sign of a rebound and Venezuela slips further into the economic doldrums. Output there is projected to drop another ten percent as the country slips further into recession and world oil prices remain low.

Brexit weighs...Or it did!
* Interesting to watch oil slip late last week as Britain voted to get out of the European Union. What happened was a huge move by speculators moving dollars from currencies like the Pound, over to other stable commodities like gold or the US greenback. Our own dollar lost a solid two cents against the US dollar as oil fell through the next two days.

I'll leave it there for now!

Regards,

George Murphy
Twitter @GeorgeMurphyOil

Price changes for Thursday, June 23, 2016

Hi to all,

Here's what I have for price changes for this week!

*Heating and stove oils show a drop of 6/10ths of a cent....
*Diesel shows a drop of an even penny, and...
*Gasoline shows a drop of 3.5 cents a litre on the way.

Market highlights

Rig count continues to rise
       It may be a painful thing to watch, but the fact that the US drilling rig count was up again last week put some worries back into the markets late last week that US drilling is more resilient to the "Saudi onslaught" of oil that has been dumped into the markets.
      That's the second week in a row that the rig count has been up and probably proves that the US drilling industry itself has learned how to cut some of their costs in order to keep operating.

Return of Alberta crude
      As Alberta crude starts to come back online starting last week, also coming along with it was less of a worry about any implied shortages of oil in the markets. The fires in Alberta's Fort McMurray area took close to 750,000 barrels offline, making some imports to the US Midwest and Oklahoma area a little shy on inventory that helped support prices.

Demand for gasoline slipping?

      While US inventories of gasoline were down again last week, refiner capacity just came over the line of 90%, a bit of a signal to the markets that maybe some refiners are trying to throttle back on gasoline production to help support the price.
      Gasoline and crude oil are both at historically high levels of inventory for this time of the year with gasoline inventories 19 million barrels over the same time period for last year.
I'm thinking that speculators aren't entirely "pleased" with the notion going forward that demand will pick up anytime soon based on that figure.

I'll leave it at that for now!

George Murphy
Twitter @GeorgeMurphyOil

Price changes for Thursday, June 16, 2016

Hi to all,

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

*Heating and stove oils to increase by 4/10ths of a cent....
*Diesel shows an increase of just 1/10th of a cent a litre, and...
*Gasoline shows a drop of 2.5 cents a litre coming.

Market highlights

*Baker Hughes rig count is up
      News from the drilling fields may include some happy points for some as the Baker Hughes rig count is up for the second week in a row.
      The rig count, showing active and new start-ups at various locations across the US and North America, showed an added six rigs back in operation. The rise in oil prices in recent weeks is reason enough why we are seeing a rebound in active rigs.
      Here in Canada, another twelve rigs went back into operation.
      With the rise in active rigs the past two weeks, oil industry people are now looking at the added effect of more pumped oil will have on US domestic production figures.

*Iran oil production
      It was only the middle of January when sanctions were lifted against Iran, a move that many predicted would add an immediate 500K barrels to the markets within six months of the sanctions being lifted.
      News today seems to indicate that Iran has beaten that estimate and is also well on their way to hitting the million barrel day added oil production before year's end.
Latest figures show Iran produced 750,000 barrels more than what they did in the month before sanctions were lifted, quite a remarkable feat!
      But keep an eye to Iran and Saudi Arabia as they both compete for market share. As predicted, that fight will carry on with evidence already pointing to Saudi Arabia discounting prices to European customers, a mainstay market for Iranian crude oil.

That's it for this week!

Regards,

George Murphy
Twitter @GeorgeMurphyOil

Price changes for Thursday, June 9, 2016

Hi to all,

Here's what I have for price changes this week, with all data now in:

*Heating and stove oils show a drop of 27/100ths of a cent drop....
*Diesel fuel shows a drop of a half cent a litre, and...
*Gasoline shows a drop of 2.3 cents a litre.

Small consolation for the huge increase in the taxation component last week!

Market highlights

Canadian dollar shows an increase
*A small and disappointing US jobs report showed some weakness in the US greenback last week that allowed the price of oil to rise as a measured response from speculators withdrew from the dollar and invested in oil. Speculators played on oil, helping the Canadian dollar increase against the US greenback as a result, with the Canadian dollar averaging two cents up against the US currency as of market close today.

US gasoline at peak?
*The price of gas has started to drop on most exchanges this past week as the peak of US summer driving season is now upon us. With speculators seeing ample supply of gas to match demand, and most futures markets into the August buying contract, it seems to me at least, that investors won't see prices any higher than right now. Look for prices to remain relatively steady now through the summer.

OPEC meetings a failure?
*Meetings between OPEC members were rather tepid and seemed to be more designed to keep the group together, rather than meant for the imposition of any kind of round of production cuts. While prices have been rising for oil as of late, I believe that this was the excuse that the group needed to not change present levels of production. In the meantime, production as well as exports, keeps climbing in OPEC members' Iraq and Iran in the face of self-imposed production maintenance.

I'll leave it at that for this week!

Regards,
George Murphy
Twitter @GeorgeMurphyOil

Price changes for Thursday, June 2nd, 2016

Hi to all,

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

*Heating and stove oils show a drop of just 1/10^th of a cent a litre.

*Diesel fuel shows an increase of 5.2 cents a litre, inclusive of the new government road tax, and...

*Gasoline shows an increase of 20.9 cents a litre, inclusive of the new government road tax increase.

Market news

OPEC meets June 2^nd in Vienna

*OPEC will hold its next meeting later this week in Vienna to discuss further possible measures to help support oil prices. Saudi Arabia hopes to arrange a hold in production to help support prices, but the possible measure is not coming to fruition with OPEC members Iraq and Iran, who have increased production to capture more market share.

     Speculators and analysts are out there thinking that nothing of consequence will come from the meeting as OPEC has a history of it’s own members cheating on self-imposed quotas.

Budget a done deal

*Here in Newfoundland and Labrador, the provincial budget passed and the notion of higher taxes on most transportation fuels ahead of the increase in HST in July is now reality. The budget passed earlier this afternoon by a 26-10 margin.

   Bill #20 dealing with allowing that increase to the gas tax was passed in the House of Assembly just last week.

That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil

Price increases across the board for Thursday

Hi to all,

Here are the final numbers for this week's projected fuel price changes:

*Heating and stove oils add 3.7 cents a litre....
*Diesel fuel is up 3.6 cents a litre, and
*Gasoline shows an increase of 2.7 cents a litre.

Market highlights

Increase to road taxes means a huge bump at the pumps
*Today in the House of Assembly, the government passed the motion allowing for an increase to the road tax collected on gasoline to be instituted June 2nd.
The increase, plus the applicable increase in the HST works out to an additional 20.9 cents a litre on the present price for gasoline.
With today's price change prediction in hand, the price at the pumps would go from $1.13.8 cents a litre to $1.34.8 cents a litre.

Demand still up ahead of US Memorial Day holiday
*As the US memorial Day holiday approaches in the US next week, gasoline prices on the New York Mercantile Exchange keeps rising, this week to hit $1.64 a US gallon. Anticipated demand through the summer is the chief cause of these increases, along with a rising US dollar against the Canadian dollar.
       The Canadian dollar has lost a rough two cents this past week against its US counterpart.

       I'll leave it at this for now. There's lot's of news out there, but Bill#20 seems to be the major story right now.

Regards,

George Murphy
Twitter @GeorgeMurphyMHA

Price changes for Thursday, May 19, 2016

Hi to all,

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

*Heating and stove oils to increase by 2.9 cents a litre....
*Diesel shows an additional 3.2 cents at the pumps, and...
*Gasoline shows an added 4.2 cents a litre!

Market highlights

*Disruptions are the order of the day
With wildfires in Alberta now threatening both work camps and oil fields themselves, the western Canadian province has also another distinction, being another region of the world that is adding to a supply disruption.
      Almost 600,000 barrels has so far been shut in. That goes hand in hand with Nigeria, also showing some 700,000 barrels a day shut in due to strife in the oil-producing region of that country. Libya also is affected with an ongoing internal struggle for power that has dropped output from the North African country to 200,000 barrels a day.
      Finally, with US domestic production taking a pounding, a drop in production of close on 800,000 a day since the oil crash has some wondering just how quickly the world over-supply is being taken up.
      These disruptions alone amount to 3.5 million barrels a day drop from last year, and we haven't even touched on other projects put on hold because of the crash in other oil-producing countries.

*Demand for gasoline rises
      Gasoline demand is picking up again ahead of the US summer driving season.
      Demand for gasoline products is up 5.1% from the same four week period last year, according to the US Energy Information Administration. That's probably enough to see traders get back into the markets and force up prices to match demand.

       Just another reason why you and me are going to pay for it this week.

That's it for now!

Regards,

George Murphy
Twitter @GeorgeMurphyOil

Price changes for Thursday, May 12, 2016

Good evening to all,

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

*Heating and stove oils to drop by 8/10ths of a cent....
*Diesel fuel to drop by 6/10ths of a cent, and...
*Gasoline to drop by 2.2 cents a litre.

Market highlights

*Saudi Arabia to continue to pump
Saudi Arabia, set to replace it's present oil minister Ali Al Naimi, says it will continue to follow conditions it has recently set in order to maintain production at January levels. The new Saudi oil minister, Khalid Al Falid said he would maintain policies currently in place by his predecessor.

          However, that goes contrary to statements made by the head of Saudi Aramco, Amin Nasser, who said plans are being made by the state-owned company to expand capacity by next year to an added one million barrels a day from the Shaybah oil field. It will be interesting to see how other countries respond as, I believe the Saudi's are setting themselves up for an "unrestricted oil war" against other oil producing nations.

*Canadian dollar falls
The Canadian dollar fell in the last few days an average of 2.5 cents over the last week as both a weak economic outlook and the shaky ground beneath oil prices saw the dollar retreat against the US greenback.

*Latest US inventory report
With US domestic oil production still falling, this month averaging 8.8 million barrels a day from last year's 9.6 million barrels, the latest inventory report still shows a steady flow of oil coming into the US from outside sources. Inventories reported a gain of 2.8 million barrels, while gasoline also showed a modest 500 thousand barrels up from the week previous.

         At a critical juncture before the start of the US driving season, the predicted drop in prices is most likely related to a withdrawal of speculators from the July buying contract, where traditionally we start to see a drop in gasoline prices through to the fall.

I'll leave it at that for this week.

Sorry for any inconvenience last week, but it was a great trip to Cuba.

Regards,

George Murphy
Twitter @GeorgeMurphyOil

Price changes for Thursday, April 28, 2016

Hi to all,

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

*Heating and stove oils show an increase of 2.9 cents a litre.
*Diesel shows an added 2 cents a litre, and...
*Gasoline shows an added 1.6 cents a litre at the pumps.

Market highlights

*While the Canadian dollar has risen slightly in the last week against its US counterpart, it still wasn't enough to absorb a corresponding rise in the basic cost price of most fuels I measure. All spot prices have shown a startling increase that goes hand in hand with rising oil prices. As a result of rising oil, the Canadian dollar has increased a rough 1.3 cents against the greenback.

*Consumers in Newfoundland and Labrador will feel the pinch this coming winter with the end of the Heating Rebate program in this year's provincial budget.
Consumers in Labrador will particularly feel the hardest hit living in a harsh environment with no benefit of the rebate program that saw considerable money to consumers to assist them with paying higher heating costs.

       Consumers will also be tagged with an added two percentage points to heating costs.
Government should re-instate the rebate program and render assistance to those who will be faced with higher energy costs. Again in this province, people will be forced to choose again between food and heat!

        Bring back the rebate and remove the tax on the necessities like heat!

*As predicted months ago, a new bottom line for the start of the return of US domestic drilling programs is slowly starting to form a picture of where we can all expect oil prices to top out.
$50 US is the new floor for oil where it is widely expected to see US domestic drilling and production programs to recover from the last year's drop in oil that initially shut down drilling.
It's also widely seen as a reason why speculators have been pouring dollars into oil this week. However, the spectre of a world over-supply of oil still hangs in the balance, so there's still predicted to be some volatility in pricing.

*Gasoline demand has picked up in recent weeks with US gas production alone hitting 9.4 million barrels a day, an increase of 3.9% over last years figures!

That's it for this week!

Regards,
George Murphy
Twitter @GeorgeMurphyOil

Price changes for Thursday, April 21, 2016

Hi to all,

Here's what I have for this week's price changes. With winter blending over until the fall, the numbers should be more accurate for heating and diesel numbers.

*Heating and stove oils show an increase of 1.4 cents a litre.

*Diesel fuel shows an increase of 1.7 cents a litre, and...

*Gasoline shows no change.

Market highlights

Canadian dollar up

*The Canadian dollar continued to rise against the US dollar this past week, increasing by an average two cents against the Greenback. While US spot prices increased for gasoline this past week, the rise in the dollar absorbed any increase to Newfoundland and Labrador consumers.

Budget reaction

*The budget will prove to be a very painful one this year with increases to energy consumers, especially for those who use the main transportation fuels of diesel and gasoline.

         Both fuels will increase June 2nd by close on twenty cents a litre by the time taxes are accounted for on top of the proposed 16.5 cent a litre increase. Total provincial take in road taxes alone will amount to 33 cents a litre, the highest in Canada. The rumours I heard of a possible five cent a litre increase in the works makes the actual that occurred that much harder, and it's really obvious that consumers could see the return of fuel surcharges to anything being moved by ground transportation.

         Food prices could again be on the upswing in June month with additional fuel surcharges on freight and tourism efforts geared toward drive-in tourists may have been knee-capped with a broken promise from the markets of the potential for lower summer fuel prices.

        This increase makes it harder for everyone, including those who are in business and needs to be rejected outright!

Doha meeting failure

*Meetings in Doha, Qatar aimed at the world's major producers limiting production were a failure this past Sunday as agreement on reaching production limitations failed to meet with any concrete actions by both OPEC and non-OPEC producers. People are saying that they "need more time" to achieve the objectives of any world cut to production and they may try again for agreement in June at the next regular meeting of OPEC.

             I'll keep a close eye on that...

That's it for this week.

Be sure to let your voices be heard over the budget. Call and contact your MHA and be sure to let them know your simply not going to take this one lying down.

Any questions, feel free to drop me a note, and don't forget to share this note!

Regards,

George Murphy

Twitter @GeorgeMurphyOil

Talks in Doha, Qatar a failure from the start

It's not good news for anyone hoping to see oil prices continue to rise.

Talks in Doha, Qatar amongst some of the world's major oil producers failed to reach a final agreement on cuts to production that would have helped to stabilize oil prices.

Hopes amongst attending nations was to see an agreement hammered out that would increase oil revenues to these oil nations, but Saudi Arabia threw a wrench into talks at the start of the day with an expectation by the world's number one producer and exporter that all OPEC nations would participate in production cuts. Word silently hinting to Iran to join in.

It was the Saudi's last hope, as well as OPEC's...

Iran, the major bone of contention, was expected to follow along as a fellow OPEC member, and sign on to the "gentleman's agreement" to maintain output at January levels ranging close to 32.4 million barrels a day. Iran, fully aware of it's own standing amongst OPEC members, already had in place it's own position as regards to their own nation's output: They fully expected to replace lost market-share from sanctions placed on the OPEC member in UN resolution 1636 that saw production curtailed and shut in.

Saudi Arabia was an OPEC member that fully benefitted from Iran's lost customer base...

Was there any hope of these nations reaching consensus in Doha based on a mutual dislike for each other?

While some thought there would be, it seems that the conditions were already set in the oil markets for a complete and utter race to the bottom of the barrel to oil prices. While some thought that $40 US was a new bottom, it seems more than likely that a downwards slide in oil prices is about to begin again.

While this is an oil war no side will win, both fully deserve the market-share they so rightfully deserve.

"Pump madly and keep pumping away" seems to be the new OPEC order of the day, every day that much closer to the end of the organisation that held world economies hostage for so long.

Somehow, it all seems so fitting...

Regards,

George
Twitter @GeorgeMurphyOil

Price changes for Thursday, April 14, 2016

Hello to everyone,

Not good news if you're into low prices for all fuels. With winter blending now a "thing of the past" until the fall, the numbers for heating oil and diesel fuel should show more accuracy in the next two weeks.

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

*Heating and stove oils show an increase of 2.9 cents a litre.
*Diesel fuel shows an increase of 2.3 cents a litre, and...
*Gasoline shows an added 3.3 cents a litre at the pumps.

Market highlights

*I'm expecting a hit on this Thursday's provincial budget.
      It shouldn't be any surprise if we see government increase its revenue stream by increasing the provincial road tax component of both gasoline and diesel fuel. Possibilities amount to anywhere up to a nickel is being kicked around and is within the realm of possibilities. Up to five cents a litre is being heard out there, but my sources simply won't confirm this.

*Talk in the international oil markets all are focused on April 17th's important meeting set for Doha, Qatar between OPEC and non-OPEC producers attempting to hammer out an agreement on limits to production, all in a vain attempt to give support to oil prices. Oil has been trading well up this week, mainly on speculation that this meeting will bring a measure of success in helping any recovery in oil prices.
       Norway has already stated that they will not be participating. Iran has said a "yes" to attending the meeting. I wonder if Canada will be represented?

*US inventories of crude oil took a dip last week dropping nearly 4.9 million barrels as refineries in the US picked up speed and output. The uptick in capacity utilisation meant an increase in gasoline inventories last week of 1.4 million barrels. But the news on that front wasn't enough to stop the run-up in gasoline prices on the NYMEX exchange ahead of the traditional start of the US summer driving season. Gasoline spots increased along with crude oil acquisition prices.

*Oil prices have increased by an average $5 US on both West Texas Intermediate and Brent crude prices this last seven days, while the Canadian dollar has gained a rough two and a half cents against its US counterpart in the same timeframe.

I'll leave it at that for now.

Regards,

George Murphy
Twitter @GeorgeMurphyOil

Price changes for Thursday, April 7, 2016

Hi to all,

Here's what I have for this week's price changes. Keep in mind the winter blend that affects both heating and Diesel numbers!

*Heating and stove oils both show a drop of 2.6 cents a litre....
*Diesel fuel shows a drop of 3.4 cents a litre, and...
*Gasoline shows a modest drop of a half penny a litre.

Market highlights

*Oil started another retreat this week as speculators began to doubt whether an agreement would be reached on total output levels by both OPEC and non-OPEC members. According to a news source, an agreement has been reached ahead of an upcoming meeting in Doha, Qatar on April 17th.

*Iran has no intention of signing on to the fixed output agreement at this point. Production levels there continue to increase along with that of Iraq, who both helped to add an additional 90,000 barrels on to OPEC's total March output.

*Last Wednesday's inventory report from the EIA was a little bit bullish and probably gave a good snapshot of where prices may be headed in the next bit. While distillate prices are lower because of warming US weather, gasoline remains steady ahead of the summer driving season-for now.
The report showed an increase in refiner capacity, growing output an additional two percentage points. While gasoline inventory was down, the numbers seem to show that gasoline demand can be met for the rest of the summer. That helped gasoline spot prices, as well as futures prices, start a slow retreat. That's why we're looking at a very modest drop in prices this week.

That's it for now!

Regards,

George Murphy
Twitter @GeorgeMurphyOil

Price changes for Thursday, March 31, 2016

Hi to all,

Here's what I have for this week's price changes. Keep in mind winter blending that throws off heating and diesel numbers a little from the actual that may occur!

*Heating and stove oils show a drop of 1.1 cents a litre....
*Diesel fuel shows a drop of 1.3 cents a litre, and...
*Gasoline shows a big increase of 4.9 cents a litre.

Highlights

*While speculators have been making huge pushes in the gasoline markets, we could be on the edge of seeing a second drop in oil prices towards the thirty dollar a barrel range. Considerable evidence suggests that the recent spike in oil prices has been overdone, and that the actualities of a glut of oil out there will again catch up to reality: that oil is over-valued. Countries who have agreed to limit production simply aren't going to be able to make enough of an impact in the markets to bring prices back to sustainable levels.

*In the meantime, gasoline futures have continued to rise the last week along with New York harbour prices. Another draw on US inventories last week of 4.6 million barrels again showed an uptick in demand ahead of the US summer driving season. Any build in inventories in the coming six weeks will probably stop the increases to consumer prices. Refinery capacity numbers have also been a little low ahead of summer due to spring maintenance, and it is anticipated that gasoline inventories will pick up with any increase in refinery production levels.

    The next US inventory report is due again tomorrow, noon Newfoundland time (NST).

*Key OPEC member Iran is not throwing their weight behind any limitations in production. The sanction-free country has announced that it will not even consider any kind of production limits until it has hit four million barrels a day production, from present levels of 3.1 million barrels. The news has to come as a disappointment to neighbouring Saudi Arabia who took over some of Iran's customers when sanctions were first placed on Iran in 2006 with UN resolution 1696. The past, it appears, is coming back to bite the Saudi's.

That's it for this week!

Don't forget to share this note. Any questions, feel free to drop me a note!

Regards,

George Murphy
Twitter @GeorgeMurphyOil

Price changes for Thursday, March 24, 2016

Hi to all,

Here's what I have for this week's price changes. Remember the winter blending that may affect heating and diesel fuel prices.

*Heating and stove oils show an added 7/10ths of a cent per litre....
*Diesel fuel shows an added 4/10ths of a cent, and...
*Gasoline shows an added 9/10ths of a cent per litre.

Market highlights

World oil production meeting?
OPEC and non-OPEC producers will meet in Doha, Qatar this coming April 17th to discuss future actions geared towards limiting production levels. It's been a bone of contention between Saudi Arabia, Venezuela and Russia that all producers should take a role in cutting oil production to bring world oil supplies back into balance.
Iran however, has no intentions of discussing the possibility of limiting its own production levels until production reaches four million barrels a day from their present level of 3.1 million barrels a day.

Closely watching gasoline
With futures prices sharply up over the past three weeks, I'm keeping a close eye to spot prices that are being affected as a result. Spot prices are present-day reads, while futures prices are speculators bets thirty to forty five days down the road. Futures prices have been rising ahead of the summer driving season that is usually marked by the US Memorial Day holiday weekend in May. The run-up to the season usually starts in March, and is well on pace by speculators to add some increases at the pump. Right now, futures prices are running around $1.50 a US gallon, while the actual spot for today has hit $1.31 a US gallon. Factors that could affect the spot outcome could be factors like inventory builds/draws, refinery capacity levels, or even demand.

I'll keep you all informed here, if I notice anything substantial on the way!

That's it for this week!

George Murphy
Twitter @GeorgeMurphyOil

Price changes for Thursday, March 17, 2016

Hello to all,

All the data is in. Here's what I have for price changes for this Thursday. Keep in mind winter blending!

*Heating and stove oils show a modest increase of 8/10ths of a cent litre....
*Diesel shows an increase of 2.1 cents a litre, and...
*Gasoline still shows an increase of 4.1 cents a litre.

Highlights

*Iran is not set to talk about a possible drop in production with Saudi Arabia, Venezuela and Russia until it has hit full stride in gaining back the same production levels it had hit before sanctions were placed on it. If that's the case, then Iran could be set to increase production by an added one million barrels a day by June. Will the Saudi-Russia maintenance of January production levels hold? It's doubtful.

*With oil now in retreat again, thanks to the news from Iran, the Canadian dollar has also lost some ground against the US greenback, losing about a cent and a half the last couple of days.

*Gasoline demand may be on the up-tick, that's if US inventory data is correct in telling the story. US gasoline inventories fell short of expectations last week with a draw of 4.5 million barrels. Crude inventories again climbed last week, reaching a historic high 519 million barrels. 3.9 million barrels was added, showing that the oil glut continues to weigh on the markets.

That's it for this week!

George
Twitter @GeorgeMurphyOil

Is there a new meaning of "company growth"?

I'm asking you this for a reason...

About a month ago, Venezuela, Russia and Saudi Arabia had a meeting to discuss production cuts that would be undertaken by the countries in an effort to prevent any other crude from adding to the glut of oil worldwide, now estimated to be in the millions of barrels, with about 1.75 million barrels a day added to it.

Some say the excess supply exceeds three billion barrels, a not-very-small amount. It would take the world 33 days to consume it, and for the world not to produce one drop while we're doing it.

But, it was an interesting comment coming from the meeting of the minds that got me thinking the prospects to Big Oil in the future, if they follow the writing on the wall from the new group bent on halting production growth. You see, they also picked up the charge that other producing countries should do likewise and also limit production to help pick up the price.

That's a huge "ask"...

Now, if I was the chair of the board at a major oil company, I would have to be thinking about what the Saudi-Russia alliance were saying. Essentially, they were saying that, because the whole world was awash with black gold, they would have to have a hand in helping them to limit production...

They were going to have to limit the growth of the company that reports to their own share-holder.

Think about that for a minute.

In what must be an almost impossible "ask" of Big Oil, they're being asked to limit production that could affect everything from investment by shareholders, limiting their own exploration programs, refining, storage,  and most especially, take a shot at their profitability and dividends to their shareholders.

Quite a corner to be painted into now, isn't it?

"Cut production, or open the floodgates to lower oil prices".

Boy...I'd love to be a fly on the wall of the BP or Exxon-Mobil boardroom!

All the best,

George

Price changes for Thursday, March 10, 2016

Hi to all,

Remember the winter blend of fuels that may throw off the heating and Diesel fuel numbers somewhat.

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

*Heating and stove oils both show an added 2.7 cents a litre up.
*Diesel fuel shows another 3.1 cents a litre up, and...
*Gasoline shows an added 4/10ths of a cent a litre up.

Highlights

*The drive for $50 US is on as OPEC and other non-OPEC oil producing nations are set to meet sometime around March 20th to discuss further moves to limit production.
OPEC member Saudi Arabia and Russia are both looking for other nations to join them in limiting production levels to "take care" of a world oil surplus that has been driving down prices to historic lows. I'll be keeping an eye to this one!

*The move has started by speculators on gasoline prices for the summer. As April trading markets opened, speculators moved in an attempt to ramp up prices ahead of the summer driving season. Traditionally, that move starts around the April buying contract, but right on cue, prices started out almost thirty cents higher than the close of the March buying contract the month previous.
We'll be watching this one as any inventory building or drop in consumption ahead of May month may help to keep prices low. Right now, because of speculators are pouring money into the gas trading market, it is driving up spot prices to the point that we may see further price increases at the pumps next week.

    I'll also give you the "heads up" when I see these numbers up, so stay tuned!

That's it for now!

Any questions, drop me a note!

George Murphy
Twitter @GeorgeMurphyOil

Price changes for Thursday, March 3, 2016

Good evening everyone,

Here's what I have for this week's price changes. Keep in mind the winter blend that may throw off the heating and diesel numbers a little. As well, don't forget my margin for error is three tenths of a cent a litre!

*Heating and stove oils show a 4/10ths of a cent a litre increase....
*Diesel fuel shows an added 3/10ths of a cent, and...
*Gasoline shows an added 1.1 cents a litre increase.

Market Highlights

*The Canadian dollar continues to rise against the US greenback, this week with the Canadian dollar rising almost 2.5 cents against it's competitor from south of the border. It's been rising slightly in par with increasing oil prices. Brent prices have increased this past week from Wednesday's $33.91 a barrel to today's $36.24 US.

*February production numbers show that most OPEC members are sticking by a self-imposed fix in output first proposed by member Saudi Arabia. Numbers show that the Saudi's are sticking pretty close to their January production of 10.2 million barrels a day in February as well. The exception here is with Iran, who produced more than 140,000 barrels a day more in February than in January, hitting 3 million barrels a day since sanctions were lifted.

The weak news on OPEC here is that production remained at a fairly strong 33.06 million barrels a day, down just 79,000 barrels from January figures.

That's enough for this week!

Any comments, feel free to leave them here, or drop me a note!

Regards,

George Murphy
Twitter @GeorgeMurphyOil

From the markets: Worth watching

Speculators have got to be running on empty and on desperation!

Watching the oil markets this past week at least gave one some reasonable hope that, maybe...just maybe...consumers will be given some pause for low prices for gasoline this coming summer. Maybe we may be able to kick-start the economy by getting out and about and spend a few dollars while out on summer vacation...

Enter the start of the April buying contract...

Now, keep in mind that every year starting around March month, we usually see some sort of a move by speculators to put a few dollars on a bet that consumers will burn a little more gasoline during the summer than in any other time of the year...

Keep in mind too, that when they place their bets, it's usually hinged on the start of the US summer driving season, which as we all know in the markets has a traditional start of the US Memorial Day weekend. That usually falls on or about Canada's "May Two four" weekend.

So, with that "buying contract" for April opening officially yesterday, what did I see?...

A run-up in gasoline from about $1.05 US a gallon to yesterday's $1.31 US, an increase of twenty six cents US, or in Newfoundland and Labrador terms, an added 9.3 cents a litre...Plus taxes.

I'm keeping an eye to this to see if it sticks in the markets. At this point, it's just a "bet" that speculators are making that I'm hoping will burn them. Gasoline inventories are well up from last year's levels by almost 30 million barrels, making it a good bet that we may see more builds in gasoline inventories before the US summer driving season starts.

Right now, for the gouge that speculators are putting in the gasoline futures markets, I'm hoping that the latest US inventory data will burn them at their own game!

Fingers crossed on that one!

I'll have numbers for this week's price changes later tonight!

George

Price changes for Thursday, February 25, 2016

Hello everyone,

Here's what I have for this week, all in all, not too much off what I had last night.

Keep in mind the winter blend, which may throw off the numbers for heating and diesel fuel slightly...

*Heating oil shows a drop of 9/10ths of a cent a litre.

*Stove oil shows the same drop of 9/10ths of a cent.

*Diesel shows a drop of 1/10th of a cent a litre, and...

*Gasoline shows a drop of 1.5 cents a litre.

*Highlights

*The Canadian dollar gained a little more ground against its US counterpart, averaging another penny up over the last week against the greenback.

*A good build in gasoline inventories last Wednesday from the US Energy Information Administration is starting to show consumers some good signs on where potential pricing may be positioned come the summer driving season. With inventories still maintaining their builds, consumers may see the same prices that they are seeing now. Demand for gasoline remains weak and refinery capacity is also low as refiners head into their switchover from distillate production to gasoline. When capacity picks up, and that is expected over the next couple of weeks, it could add extra gasoline inventory to already positive numbers. Prices could potentially fall further!

*OPEC, Saudi Arabia can't seem to get it right...

In what must have been an almost embarrassing speech by the Saudi Arabian oil minister Ali Al Naimi, he professed today at a Houston oil conference that they had no intention of trying to knock out US shale production. But he also added that this may be a good cause for more expensive projects to shut down, or for investors to pull out of those same projects.

     Secondly, and probably more importantly, he also recognised the new reality that oil prices may never rebound to their previous highs of just two years ago when oil prices exceeded $100 US. They're not happy with oil where it is to now, but they may have no choice but to live with it. That's a signal to me that they're into the fight for their market-share for a long time.

I'll leave it at that for now!

Regards,

George Murphy

Twitter @GeorgeMurphyOil  

US Energy Information Administration report: Starting to get a "read" on summer

The latest report from the US Energy Information Administration released today gives a good indication where prices could be headed for consumers this summer.

According to the report, crude stocks have climbed again to reach a rough 504 million barrels on inventory on-hand, a record since record keeping began in 1981. Another 2.1 million barrels of crude oil was added to last week's numbers.

Gasoline inventories were also reported up this week by another 3 million barrels, and along with an increase in refiner capacity, figures show that in spite of the low price, consumers still seem to be holding back.
(See the summary here: http://ir.eia.gov/wpsr/wpsrsummary.pdf )

Why?

Well, maybe it's a sign that consumers are simply not paying as much attention to the pump price now that they're at a level that is more affordable. They simply don't have to go on a buying spree when they see prices reflected at a level that is affordable.

And maybe they are more aware and simply are practising conservation, which is great!

Perhaps the oil industry should take note the next time (if ever) that prices start to increase with rising oil.

What the report tells me simply is this: While gasoline and crude oil stocks are continuing to build, it is the middle of February. Traditionally, you would see gasoline speculators pouring into the markets well ahead of the summer driving season to try and take advantage of the opportunity to invest in anticipation of an increase in demand.

That hasn't started to happen. I'm wondering if it ever is going to...

Here's my read then for the summer, if this "trend" keeps up.

Simply put, "what you see is what you get"...At least so far...

With no sign of an increase in demand yet, consumers looking to plan their summer might be able to do something they haven't done in a few years: Go further!

Regards,

George

Price changes for Thursday, February 18, 2016

Hi to all,

Here's what I have for this week's price changes, keeping in mind "winter blending" which may throw off the numbers for heating oil and diesel fuel just a little.

*Heating oil shows a drop of just 8/10ths of a cent a litre....
Stove oil shows the same 8/10ths of a cent drop.
*Diesel fuel shows a drop of 4/10ths of a cent a litre, and...
*Gasoline shows a slight increase of just 3/10ths of a cent a litre.

Keep in mind that my margin for error is three tenths of a cent a litre outside of winter blending!

Highlights.

*The Canadian dollar remained relatively steady against the US greenback, averaging a rough $1.385 against the US buck over the last seven days.

*Markets are mostly in a waiting mode as they wait to see if any concerted action will be taken to institute production cuts between Russia, Venezuela and Saudi Arabia. Saudi Arabia and Russia are mostly responsible for added oil supplies worldwide.
   As a footnote to all this: The Saudi's, Russia, Venezuela and Qatar, all signatories to a deal that will stabilise production at January levels, say that Iraq and Iran must also curtail production if the agreement is to hold.

   Fat chance of that!

   Remarkable when you think about it, but world oil producers' concerns over added world crude stocks that is keeping crude oil prices at an extreme low are now talked about between major producers in the world's biggest case of "collusion" in an effort to help bolster prices again.
So much for the free market!

*Watch Brent prices in the coming few weeks.
News out of Iran sees that country sending it's first load of oil in four years to the European markets this week as Total SA out of France is seen to be buying off the now sanction-free country.
Iran, by the way, is not party to ongoing talks between Russia, Venezuela and Saudi Arabia over production cuts.

*A new brokered peace in Libya may also add more crude to the markets. With a peace deal in place with a new provisional government, it is possible that European markets will see added shipments from the North Africa country in the coming weeks as they seek to re-enter the market after an uneasy civil war.

That's it for this posting!

Regards,

George
Twitter @GeorgeMurphyOil

Price changes for Thursday, February 11, 2016

Good evening everyone,

Here's what I have for this week's price changes, keeping in mind winter blending that may throw off the heating oil and diesel numbers a little.

*Heating oil shows a drop of 1.3 cents a litre....
*Stove oils show down by 1.3 also.
*Diesel shows a half penny drop, and...
*Gasoline shows a huge drop of 4.7 cents a litre.

Highlights


*As predicted a few weeks ago, it certainly appears that a price war of sorts will start up against oil prices with most OPEC nations raising production in January month by an added 280 thousand barrels a month. Current production was a total of 32.6 million barrels a day. That hit Brent prices particularly hard today as most of this production would most likely be sent to the European markets. Keep reading...

*Still no real sign of a drop in US domestic production after a slight drop over the last six months. US domestic production in January remains at a  stalwart 9.2 million barrels a day. Pretty important signal to Saudi Arabia that they're going to have to drive prices lower, if they hope to knock out US domestic production as an important player in world oil prices. That, and compete directly with US customers for crude oil.

*The International Energy Agency is warning that low prices may continue for some time yet as all countries currently are producing 1.75 million barrels a day more than what the world actually needs. That's up another 250,000 barrels a day from their previous needs of world demand.

*Add to the mix, Kuwait as another country and OPEC member setting themselves up to produce more crude oil in the final quarter of 2016. They're set to increase production from 2.5 million barrels a day to 3.15 million by the end of the year.
Talk about exacerbating the problem!

*Finally, I'm surprised to hear that Nalcor will be looking for an increase to allowable expenses for added burning of oil in Holyrood! All things considered, prices for #6 oil that they use is now well below what they adjusted for months ago when we received a drop in electricity rates. Hopefully, the consumer advocate will defend this "ask" on the part of Nalcor and champion a drop in electrical rates as a result of the drop in price of the oil they use!

That's it for this week!

Regards,

George Murphy
Twitter @GeorgeMurphyOil

Of market plays, reality and other oily bits...

Surprise!

You must be wondering exactly what goes through an oil speculator's head whenever we see what we've witnessed today in the oil markets. In spite of the breaking news the last couple of hours today, speculators still can't grasp the simple facts that lay before them that keeps them hedging their bets into a radically changed market.

It's simply not the same place since OPEC first played their lot in 1997. That was the year they wrenched production downwards in their effort to increase the price on a barrel. Succeed they did, but only to have others to explore with different tools into long-known shale resources that they thought would never be tapped.

How wrong they were when the advent of slickwater did them in starting in 2008! The markets simply haven't been the same since.

But today's market news simply tells the state of the speculator, playing with God only knows who's money, but playing with it nonetheless.

If you're Stateside, you're 401K is taking a beating.

So, here traders were, from last Friday, dealing with "news" that Russia and Saudi Arabia were into some sort of talks on a concerted market action to raise prices, because you know, every time your country goes to war, you have to have a way of paying for it. So, you don't say "no" to the course of action.

Oil rises as a result of said "talks on a production cut". Both countries neither confirm, nor deny...

Iran enters and puts the kibosh on those talks late Friday and the electronic sell-off into Monday and Tuesday squares away the reality again. All is in balance...

Then today...

In spite of the latest US Energy Information Administration's report, and the promise held within of the market reality of declining storage, excess supply and slack demand for refined products and a world awash in crude oil, prices increase markedly...

Why?...

That "nasty" rumour of OPEC master Saudi Arabia and Russia talking again.

No confirmation.

No denial.

Oil rises...

But it's your investments! You expect a "return" because that's for retirement and returns are supposed to happen, right?...

Deal with reality. EIA results showing 503 million barrels in storage, a record high not seen in eighty years!

Gasoline inventories up another 5.9 million barrels, well ahead of the summer driving season when the speculators start to turn their attention to a peak in gasoline demand, all in spite of refinery capacity down to a low of 86.6 per cent!

Consumers simply aren't burning the stuff, and depending what side of the ecological fence you're on, that's either a good or bad thing. Yes, Mr. Speculator, you're really starting to run out of places to put the oily bits down on. Seems with oil, it's both out of luck and out of time.

Take some worthy advice.

"Put your bucks into alternative energies and let it ride..."

*******************

George

Twitter @GeorgeMurphyOIl

Price changes for Thursday, February 4, 2016

Good evening!

Here’s what I have for this week’s price changes. Please keep in mind that the numbers for Heating oil and Diesel fuel are subject to winter blending and may be off somewhat. Use them as a rough indicator of direction!

*Heating oil shows an added 3.6 cents a litre.

*Stove oil shows the same 3.6 cents a litre.

*Diesel shows an added 3.4 cents a litre, and...

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

Market highlights

Canadian dollar steady

*While oil gained some strength over the session, rising to touch close to $36 US for Brent, the Canadian dollar rose right along with it. Averaging close to $145 last week, the dollar gained almost five cents against the US dollar, but did not retreat with the last couple of days trading, staying at a steady $1.40 against the greenback.

US inventories

*While US inventories of crude oil, gasoline both increased last week, prices for distillates like heating, stove oils and Diesel fuel all decreased with colder weather in the US northeast and Mid-west. Inventories were nailed with a loss of 4.1 million barrels, showing good demand for the products, and that’s where speculators poured it on. Crude oil added an additional 8.4 million barrels while gasoline was up another 3.5 million.

            Refiner capacity dropped to 87.4% from the 90.6% recorded the week previously due to unscheduled refinery outages.

Marine Atlantic surcharges

*Any increase to surcharges to Marine Atlantic customers should be totally unacceptable for anyone in this province. While not directly fuel related, any future increases to fuel surcharges are coming, according to the federal corporation. Representation from this province should be made to prevent any increases that supported the former government’s policy of making the crown corporation a “self-sustaining” entity. The policy of any government should be to connect a country, not bar anyone from entry or exiting from that province. “Any increase in rates adds to an artificial inflationary cost that is passed to consumers” and should be absorbed by the federal government.

            Secondly: The boats we have now were first purchased as a replacement to the old “Caribou” and “Joseph and Clara Smallwood” boats, not only because of twenty year replacement, but because of their fuel efficiency. While there hasn’t been any marginal decrease in marine diesel prices, it is wrong to assume that consumers and users of the ferry system will have to pay higher costs due to higher prices for the fuel in the future. Already, there is a glut in shipping worldwide, so much so that fuels, like marine diesel fuels, are expected to retreat in the face of less consumables being transported.

           Lastly: If there’s any improvement in the Canadian dollar, then consumers should be, not only expecting, but demanding a break to fuel surcharges because of the same lower cost of fuel acquisition. The price of fuel, right now, between 2014 and 2016, when we were close to par and today’s dollar, both show that we essentially are paying the same price for fuel.

            Either way, absorb the cost. It’s the price of doing the country’s business!

Watching: US inventories, gasoline inventories, Iran production, Saudi-Russia arrangements, OPEC production figures.

That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOIl

Enter the Dragon

           The latest US Energy Information Administration's inventory data is very telling on where the market stands and how traders are having trouble trying to justify any increase in oil prices for the foreseeable future.

            Consider the last three weeks of inventory data released by the EIA. For the past three weeks, data tells us that, in spite of recent drops in refiner capacity and utilization, crude inventories have been showing pretty robust builds in what some even say are in the face of dropping US domestic production.

            Well, the oil is coming from somewhere, isn't it?...

             US domestic production still hasn't shown a solid drop in production and output since the last figures we saw in December. Current production rests somewhere in the 9.2 million barrel per day range. No doubt, some small-time producers are having some troubles, but it's my belief that these same small-time producers have no choice but to pump to pay off their investors. They simply can't shut down...

             It's best for them to risk bankruptcy than to shut down and risk losing any hope of gaining back investors if oil prices rebound. Keep pumping and hoping...

             Elsewhere, Saudi Arabia chatter is that they're in talks with Russia over the possibility of production cuts that may only be a pipe dream. The truth is for the Saudi's is that they simply can't cut back production without losing market-share to neighbouring Iran, who some time ago, promised to get back their market-share lost to the Saudi's when sanctions were first placed on them years ago. Their "re-entry" into the oil markets has the Saudi's on notice that there will be a price war. 

             Secondly, with the prospect of Iran pumping more, why would the Russians risk losing their own market-share to the Iranians?

             Reality bites...

             Three weeks in a row now, the EIA has reported more than 20.8 million extra barrels of crude oil into the US markets. Space to store it is beginning to disappear at a prodigious rate and consumers simply aren't burning gasoline like they used to. With inventory builds ranging 16.5 million barrels ahead of the build-up to the summer driving season, why would I risk putting money into a so-called "bottom" to oil prices?

             Finally, enter the dragon called China. With weakening manufacturing data, low demand growth and an overall faltering economy, where again is the impetus for oil? Prices are low worldwide, but no one is buying.

             God help the markets if China decides to stop their investment and top-up of their strategic reserve! You can look for an immediate availability of 500,000 barrels a day if they stop their program of building it. The ramifications of that could be felt soon enough! But is this the response we're waiting for from China? Are they the factor we're all waiting for to see what a fair world price of oil should be...or could be?

             Is our own economy waiting for China alone?

             So, what do we look for? Any hope of rising oil?

             The market hope rests in one fact, a point that Saudi Arabia may have been forcing on us in the first place: Why pump in the west if you don't have to? Strategic drilling and the forced shut-down of projects and exploration may be the only hope, as fleeting as they may be, that world production itself gets a hit merely on affordability of projects already started but not as yet producing.

              The new dragon in the markets may simply be found in the wheat and corn husk fields ranging between the Dakota's and the Texas Oklahoma panhandles. Simple ability to respond to any crisis, or downfall in world production could be as easy as turning the spigot Stateside.

              Even then, that response can be short-lived!

Regards,

George

Twitter: @GeorgeMurphyOil  

            

 

Price changes for Thursday, January 28, 2016

Hi to all,

First off, thanks for your patience as I have not posted here in some time due to computer issues. I needed a solid upgrade, let's put it at that!

Either way, now that I am free and unencumbered, I intend to post here a little more often than previous as changes to the oil markets occur. You can count on hearing from me a little more as we go through this downturn and changes to the oil markets!

If I bore you, then unsubscribe!...lol

Here’s what I have for this Thursday’s price changes. Keep in mind that due to the winter blend of fuels, heating and Diesel numbers may be off slightly.

*Heating and stove oils show an added 18/100ths of a cent up.

*Diesel fuel shows an added 7/10ths of a cent upwards, and...

*Gasoline shows an increase of 5/10ths upwards.

Market highlights

*The Canadian dollar is starting to gain some ground against its US counterpart, reaching $1.4062 against $1.4589 at the start of this pricing session. In spite of the rise in fuel prices on the New York mercantile exchange this week, those increases have been mitigated by the rise in the Canadian dollar. Heating oil increased a rough nine cents a US gallon this last week on the exchange, while diesel gained a dime a gallon and gasoline increased six cents on average this past week on rising oil.

*All eyes are now on Iran for the first data that may show exactly how much oil the OPEC member will be pumping into the markets now that sanctions have been formally lifted. Iran will immediately respond by adding 500,000 barrels to output, gradually increasing to an added million on top of present output by the end of this year. Look for a “play” as Iran counters lost market share to competitor Saudi Arabia.

That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, December 10, 2015

Hi to all,

Here's what I have for price changes for this week, keeping in mind the winter blending formula that may throw off accuracy for heating and Diesel fuel pricing.

*Heating oil shows a drop of 1.8 cents a litre.
*Stove oil shows a drop of 1.8 cents a litre as well.
*Diesel shows a drop of 2.5 cents a litre, and...
*Gasoline shows a drop of 4.8 cents a litre.

Market highlights

*OPEC still won't Institute any kind of a production cut, in spite of the protests of a few members who would like to see. Some support to oil prices. Revenues have certainly taken a beating! But at the latest meeting in Vienna this past Friday, it was decided by members to Sally forth and keep production levels up. With the promise of added production, Oil prices dropped with refined commodity prices following.

*Is OPEC now chasing down the non-OPEC producers? Countries like Russia, Mexico, Norway, and yes, Canada, continue to produce crude oil from fields that have been pumping for years now. None of the companies, or the countries in question, want to lose revenues, nor can they be seen to fall to the whims of OPEC when they want to see other countries reign in production. OPEC would like to see non-OPEC nations join in with production cuts.

Can't happen...

With OPEC getting that "no" answer, first from Russia, OPEC will now start to make the run after these countries. If you can't get them to "participate" in cuts, I believe OPEC is starting to go after their bottom line to force them into an untenable operating position. That being the case, and with Iran about to enter the markets, Oil prices could drop further.  And with new Iranian crude to the markets chiefly for the European markets, Brent prices could be tagged first.

*The Canadian dollar continues to show weakness against the US greenback with the Canuck buck losing another two cents against the neighbouring currency.

I'll leave it at that for now. If you want, drop me a line!

Regards,

George
Twitter @GeorgeMurphyOil