Price changes for Thursday, November 3, 2016

Hi 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 per litre.

*Diesel to drop by an even penny, and...

*Gasoline shows a drop of just 6/10ths of a cent.

Market highlights

Another closure of the Columbian pipeline disrupts gasoline output

An explosion and fire has again closed the Colonial pipeline that runs from the US Gulf of Mexico refining and export areas to the US northeast, causing a sharp increase in gasoline spot prices on the New York mercantile exchange today that may not be felt by Newfoundland and Labrador consumers until they hit the pumps next week IF the line isn’t repaired soon.

    Before today, numbers showed a small decrease of a penny a litre, but the fire and explosion that took one life has resulted in a sharp increase in gasoline prices as a result of a “supply disruption”.

    “We’ll see how it goes in the markets over the next couple of days, but prices are already showing close to a four cent a litre increase could happen if today’s closing prices carry through the week”.

      Repairs are estimated to take until Saturday at the earliest to bring the line back into full operation again.

OPEC deal could fall apart?

OPEC’s deal to make a cut to production may already be under threat as Iran and now Iraq, are expressing dissatisfaction with having to institute cuts before they reach maximum “pre-war” production levels.

      That played into the markets this week allowing Brent prices to drop almost $3 US a barrel to close today at $47 and change.

       Speculators are also keeping in mind that the Saudi government is looking at raising cash through the sale of stock in the government owned Saudi Aramco oil company, saying the only reason why the Saudi’s wanted a freeze was to raise the share price and increase the government take.

       In the meantime, OPEC meets again at the end of this month to formally implement the limited production agreement.

       Food for thought...

That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, October 27, 2016

 

Hi to all,

Here's what I have for this week's price changes:
*Heating and stove oils to increase by 8/10ths of a cent a litre....
*Diesel fuel to increase by 1.1 cents a litre, and...
*Gasoline to increase by 1.2 cents a litre.

Market highlights
OPEC deal falling apart?

Already, there are internal rumblings from within OPEC on how members themselves will be able to keep any production cuts in place.
      OPEC member nation, Iran has been speaking out lately on the prospects of continuing to produce to maintain and increase lost market share from sanctions placed on the country back in 2008. While "joining" with members in signing on to cuts, they don't want to institute any cuts until they reach their previous 4.7 million barrel a day output. They still have a long way to go there yet, but I'm guessing that they're still about 900K barrels off the mark.

Canadian dollar tags consumers
The drop in the Canadian dollar this week connected to lower than expected economic growth, has hit consumers this week with the Loonie losing ground against its southern cousin, the US greenback.
     The Canadian dollar has lost nearly two cents against the US marker in the last three business days, costing consumers ironically 1.2 cents since last Wednesday's measure.

Bennett fiscal update this week has to "give back"...
Remember the provincial budget?
      That was the document that led to a massive increase in provincial road taxes that has cost consumers and businesses alike with lost spending power and lost disposable income to spend.
      It also increased the HST provincial take and increased your fuel prices a rough twenty cents a litre for every litre you bought.
      It was, in essence, the province's own carbon tax...
      But it's time to drop the tax back and even up the playing field again in Atlantic Canada with the latest increase in oil that has added close to $190 million into provincial coffers by the time the next budget rolls around.
     Why drop it back?
     Simple really...
     The price of oil has increased to almost $1 US over what was projected in the budget, successfully adding an estimated $295 million into provincial coffers when the next budget comes down.
     We have paid our fair share and it's time to cut the taxpayers, and business alike, a fair shake.

That's it for this week!

George Murphy
Twitter @GeorgeMurphyOil

Oil prices to rise?...Don't bet on it!

OPEC is happy...For now.

But I really don't know why they should be.

For the first time since 2008, OPEC cut production.

While the meetings in Algiers finished up yesterday with a lacklustre arrangement for fellow OPEC members to institute a "long needed" cut to production, what will it mean to the oil markets?

In an unstable world still ever dependent on oil, people can be quick to forget why oil prices have stayed low for so long, and why OPEC is hoping beyond hope that their fellow members will be happy with instituting a million barrel a day cut.

Not all OPEC members are happy with cutting.

Two OPEC member countries, namely Libya and Nigeria have to be upset with a quota that has them wondering why they have to put up with part of this million barrel a day cut in the first place. Both countries are trying to recover from instability and revolution and the last thing they possibly need is a cut to production that would hinder any recovery to their torn economies.

Nigeria, previous producers of almost 2.7 million barrels of light, sweet oil per day, is being asked to shoulder cuts while still recovering from a low output of close to 1.5 million barrels.

Libya, producers of almost 1.5 million barrels a day prior to their post-Ghadafi revolution, have only managed to scrape up a 300,000 barrels a day output and are hoping to return to full operation in the coming months.

This not the only sign that things may not go well on the oil front...

In recent months, in spite of lower oil prices, the US domestic oil industry has shown itself to be resilient in the face of low oil prices. A quick look at the numbers of rigs returning to the field is a sure sign that, if oil prices do indeed rise, their return to the fracking fields in the US Eagle Ford, Marcellus and Bakken fields are a sure bet.

Don't count out the response of US domestic response to fill in the role of a hole created by an OPEC "knee-jerk" response to lower oil prices.

Keep in mind also that any OPEC-instituted cut in production has never worked when it comes to the final read on output. OPEC has a history of over-producing and under-reporting oil production figures, so there's no reason to expect them to change dirty habits.

The markets should know this...

They're just not saying so yet...

Finally...

Gone are the halcyon days when OPEC used to institute a cut and the markets saw a meteoric rise in oil. Most times saw sharp, sudden increases to oil that were sustained and helped support oil to where it hit record heights.

That was before the days of the frack and the advent of "democratic oil". Now everyone has it, if they have a shale resource and everyone can respond to fill that oil hole.

OPEC knows this, but they forgot this very important fact.

OPEC did succeed in two things yesterday: OPEC managed to put out the sure signs that they lost the fight for market share and the fight to retain control of the price of oil.

Investor beware!

Regards,

George
Twitter @GeorgeMurphyOil

Price changes for Thursday, September 22, 2016

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

*Heating and stove oil to drop by a half penny....
*Diesel fuel to drop by 6/10ths of a cent, and...
*Gasoline to increase by 2.7 cents a litre.

Market highlights

Pressure on refined gasoline
A break in the important Colonial pipeline that brings gasoline from the US southeast refining area to the US Mideast regions has been causing spikes in prices in most regions east of the Mississippi and Ontario and east as well.
     Because of the supply disruption, prices for gasoline also showed a marked increase as shortages in the US southeast for refined gasoline increased the value of gasoline from other regions unaffected by the supply disruption.
     It's not going to last however, as prices are already starting to moderate as a pipeline fix-a temporary one at least- is due to come into operation at almost any minute that should bring supplies back online.
     Look for prices to retreat again next week on the news.

Oil producers to meet next week
Mark down September 28th as a day to watch oil on your calendar as Saudi Arabia and other OPEC and non-OPEC producers meet to discuss any possibility of invoking a freeze on further oil production meant to stabilize and increase oil prices.
     Already, the president of Algeria is stating that they need to see at least a million barrel cut in present production in order to help stop the latest fall in prices.

I'll keep it at that this week

Regards,

George Murphy
Twitter @GeorgeMurphyOil

Price changes for Thursday, September 15, 2016

Good evening,

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

*Heating oil shows an increase of 1.5 cents a litre....
*Diesel fuel shows an increase of 1.2 cents a litre, and...
*Gasoline shows an added 2.4 cents a litre.

Market highlights

US Inventory report impacts prices
Last Wednesday's US EIA inventory report certainly was a model for how speculators can jump all over the tiniest of facts.
      The inventory report from last week gave everyone a good read on how much the markets can be influenced once some "certainty" is weighed against the truth.
      Last Tuesday, the last day of the regulatory session, industry reports were released to the markets stating that US inventories were impacted according to the industry report, in a negative way. Numbers for oil were well down. But the markets the next morning didn't exactly run away out of control on their news.
      Enter Wednesday noon when the US EIA inventory read came out for the week before.
      Facts are facts, and in the face of a drop in both gasoline and crude oil inventories, oil shot up a good $2 plus over the next few hours and stayed there for the rest of the day.
      Refined commodity prices also showed a rapid increase right behind oil.
      But expect a retreat in prices starting into this week's market trading that should impact consumer prices set for next Wednesday.
     While Hurricane Hermine shut down most imports into the Gulf of Mexico last week that turned oil prices up, then the opposite will be true for tomorrow's report. That one should show a massive build in inventories, those same barrels that didn't make it to shore the previous week that put the screws to prices for us this week.
     The numbers may be up this week, but they're not likely to last as the reality of an over-supplkied world full of oil once again takes hold of the oil markets.
     The numbers may be up this week, but they're not likely to last as the reality of an over-supplied world full of oil once again takes hold of the oil markets.

That's it for this week!

Regards,

George Murphy
Twitter @GeorgeMurphyOil

Price changes for Thursday, September 8, 2016

Hi to all,

Looks like the retreat in prices I predicted a couple of weeks back is starting to kick in. Here's what I have for this week's price changes:

*Heating and stove oil shows a drop of 3.2 cents a litre....
*Diesel fuel shows a drop of 3.5 cents a litre, and...
*Gasoline shows a drop of 4.1 cents a litre.

Market highlights

Saudi's meet with Russia on freeze prospects
Saudi Arabia, OPEC's largest producer of oil, met in a separate meeting this week with non-OPEC producer, Russia on the prospects of instituting any freeze in oil production.
     While the markets are spotty on any support of a freeze, it seems that any freeze in production will end up on the floor as the sceptics don't see either country, or OPEC, to stick with self-imposed limits.
     Oil prices struggled to gain any ground this week on the news.

US inventory data tells a story
Last week's inventory data out of the US Energy Information Administration has some things of note this week.
     First off, but not too unexpected, was the fact that oil showed a gain in inventories that helped start a drop in prices. Inventories of oil were up 2.3 million barrels. Part of that build may very well have been helped by additional supplies from Alberta and Nigeria, most recently back in the markets from their supply disruptions.
     Secondly, distillate inventories were up again well ahead of the fall and winter season. All good to see ahead of consumption time.
While refinery capacity was also down, reflective of the changing demand season for gasoline and distillates, I have seen a retreat in gasoline simply as the result of a drop in gasoline demand at the end of the summer driving season.
     Look for the focus of the markets to switch to attention towards the distillate markets from now until spring 2017.

That's your report this week!

George Murphy
Twitter @GeorgeMurphyOil

Price changes for Thursday, September 1, 2016

Hi to all,

Here's what I have for this week's price changes. I'll apologize in advance for the lack of any market news. There simply wasn't any time for market analysis this week.

*Heating and stove oils will increase by 3/10ths of a cent a litre.
*Diesel prices to drop by 1/10th of a cent, and...
*Gasoline prices to increase by 8/10ths of a cent.

Regards,

George
Twitter @GeorgeMurphyOil

Price changes for Thursday, August 25, 2016

Hi to all,

As predicted, there's not much change in the numbers.

All are up.

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

*Heating and stove oils to increase by 3.9 cents a litre.
*Diesel fuel to increase by 3.8 cents a litre, and...
*Gasoline shows an added 4.8 cents a litre at the pumps.

Market highlights

Iran to join talks in Algeria
*In a surprise to the markets today, Iran is said to have written a letter to fellow OPEC members letting them know that they will join talks with other OPEC and non-OPEC members in the possibility of instituting a production freeze.
     World oil producers are still trying to deal with an excess of supply in the markets, and it is widely believed that a freeze in worldwide oil production will help alleviate the present drop in prices.
The news today help take oil prices out of negative territory and oil ended with a gain on the day.

Oil inventories lower
Last week's inventory news out of the US was for some a surprise as buth oil and gas supplies took a dip last week all against market expectations.
    Gasoline inventories took a drop of 2.7 million barrels in last week's report with oil also down by 2.6 million barrels.

I'll leave it at that for this week.

Regards to all,

George Murphy
Twitter @GeorgeMurphyOil

That was the release I sent out a little while ago...

The news out of Iran today was a little surprising, I will admit.

In case you missed it, the Iranians are now talking about attending the "freeze" meeting set for Algeria in late September...

Curious though is the effect of making an announcement like that today a full month ahead of the scheduled meeting. Perhaps the Iranians now know what kind of influence the now hold in the markets, but even more curious knowing that they have been taking on the Saudi's at their own game with discounting to their favorite Asian customers almost a side-act.

Be that as it may, Iraq still enters a new realm in the markets with their announcement the other day that they have reached an export deal with the Kurds in the north where exports have been shut in from the Kirkuk fields. With oil down yesterday on the immediate addition of upwards of 200,000 barrels a day in output, it was no surprise to see Iran respond with their own "influence" shot to gain back some attention again.

But keep looking south, but not just south...

With rising oil, US rig counts have again increased for the tenth week out of eleven measured. The fact that oil is still supported close to $50 Brent and $48 WTI, tells me to expect another week of a double-digit increase in rig counts in the next week or two. Resiliency is showing itself in the US and may turn out to be the factor that shuts down any increase (or prospects of) in the price of a barrel of oil.

Regards,

George 

Price changes for Thursday, August 18, 2016

Hi to all,

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

*Heating and stove oils show an added 3.2 cents a litre.

*Diesel shows an increase of 2.7 cents a litre, and...

*Gasoline shows just a 1/10^th of a cent a litre increase.

Market highlights

As oil prices rise, affects can be seen and are all the focus of the update this week...

With OPEC talking about taking another extraordinary measure to freeze production, speculators are betting that, this time, the move to impact on the abundance of oil in the markets will work this time.

    *OPEC will meet in Algeria on September 28^th to discuss the possibility of a production freeze. Other non-OPEC producers like Russia, have shown an interest in cutting back or freezing production in an effort to support oil prices and increase revenues.

    *Oil prices have increased a rough 12 percentage points since the last price setting, an increase of $5.65 over the last week as a result.

     *The Canadian dollar has increased in value against the US greenback, rising close to three cents from $1.30.6 cents to today’s noon rate of $1.28.6 as oil prices have increased.

     *What is obvious by the numbers this week is a market focus on distillate fuels that have shown a major increase this week, and numbers that are also pointing towards a potential  increase again for next week ahead o the fall season.

      *With attention now off the gasoline selling season in the US, gasoline numbers are showing a barely visible increase at the pumps this week. You can see where refiners have been losing in the game this past summer with gasoline spot prices remaining relatively steady against the increase in oil prices this week.

I’ll leave it at that for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, August 11.2016

Hi to all,

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

*Heating and stove oils show an added 1.1 cents a litre.

*Diesel fuel shows an additional 2.1 cents a litre at the pumps, and...

*Gasoline also shows an added 1.1 cents a litre.

Market highlights

OPEC talks about holding production cuts meeting

Some OPEC members are again talking about the possibility of putting “further” production cuts in place after watching the fall of oil again this week. Member countries like Venezuela are struggling in the tide of falling oil with the Mediterranean OPEC member swimming in a mounting tide of debt because of faltering oil prices.

     Russia is also keeping in mind how low oil has cost their own economy and are again also keeping the possibility of production cuts in mind for a possible September meeting.

     But the possibility of cuts doesn’t seem to hold water in some circles...

     Both Iran and Iraq have been discounting oil prices to their Asian customers against their fellow OPEC member Saudi Arabia. After an initial rise in oil prices, markets were again in retreat today.

       

US domestic rig count rises again

     For the ninth week in ten, US domestic rig counts were up again, in spite of oil’s fall. With oil still showing all the signs of sliding further into bear territory, the number of small oil companies returning to the oil patch continues to show slow but steady growth in spite of low oil, and it’s the biggest bone that the OPEC dog has to contend with. Any discussion of talks cannot happen, or round of cuts stick, without seeing any kind of return of the power that US domestic resources holds.

      With rising rig counts worldwide, OPEC runs the risk of losing their own market-share, and thusly, their former world economic influence. Any gap in production will be quickly met with industry response.

US inventories

Last week’s US inventory report out of the Energy Information Administration showed a surprise draw against gasoline inventories of 4.3 million barrels. While ample gasoline inventories remain well over the five year average, a surprise draw was enough to bolster speculators into boosting gasoline prices this week.

That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, August 4, 2016

Hi to all,

Final numbers...

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

*Heating and stove oil predicted to decrease by 3.3 cents a litre.
*Diesel fuel to decrease by 3.2 cents a litre, and...
*Gasoline to drop by 1.6 cents a litre.

Market highlights

Saudi Arabia discounts
Saudi Arabia has started again to discount to it's Asian customers as the selling war against Iran has again escalated. Since Iran's return to the open markets after the lifting of sanctions, I predicted then that it wouldn't take long before Iran starts to pick a fight in an effort to gain back its own lost customers from the first placement of sanctions a few years back.
     Looks like this fight is going to be worth keeping an eye on for its European connection!
     Read on!

Libya back in it
Libyan production is coming back on with the end of violence in four key export centers from the North African nation. Analysts are saying to expect anywhere between 150,000 barrels to 450,000 barrels immediately into the world markets with an increase to 900,000 barrels of oil almost certainly directed at the European and Asian markets.
      Let there be no mistake that, in a few weeks time for exports to reach Europe, and excess supplies will be certain to hit Brent prices more so than West Texas Intermediate. There will be some discounting in Europe to come!

Nigeria back in
With the Nigerian government agreeing to start paying rebels a share of oil royalties (it's not that unusual), expect to see an increase mostly to the US of light sweet crude into the US eastern seaboard. With production showing some resilience in the US in spite of retreating prices, look for the US to build oil inventories that might show a continued glut will carry on in spite of any producers best efforts.
      It was November of last year that it was estimated that the world had in excess of three billion barrels of oil to be consumed before we were free of the oil glut.
      Just a few reasons why we won't see any recovery in prices anytime soon.

That's it for this week!

George Murphy
Twitter @GeorgeMurphyOil

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