Price changes for Thursday, March 28th, 2019

Hi to all,



Here’s what I have for this week’s fuel price changes. Keep in mind that winter blending is still in effect!



*Heating and stove oil show an increase of 1/10^th of a cent.

*Diesel shows an increase of 4/10ths of a cent, and...

*Gasoline shows an increase of 2.8 cents a litre.



Market highlights

With gasoline prices set to rise again this week, I ran a comparison with last year’s numbers to see where we are. Gas prices are just below where they were for the same time last  year with the exception that the Canadian dollar was about six cents less than what it was today, and probably part reason why spot prices are almost the same.  Spot price for gasoline this year for this week’s price change I have at 64.8 cents. Last year’s spot was 65.5 cents.

      Price at the pumps last year, as compared to this week’s if the prediction holds?

$1.33.1 last year versus $1.31.1 later this week.

       Oil on March 27, 2018 was at $68.91 US a barrel for Brent



Tightening supplies versus economy

OPEC and non-OPEC members are still sticking to their guns on maintaining production cuts that amount to 1.2 million barrels a day, and other factors also continue to weigh keeping oil prices up.

     The production cuts agreement is in effect until June, but many believe that deadline will be extended.

     Iran sanctions and falling Venezuelan supplies are also helping to add supply constraints to the world market, even as news of a slowing economy worldwide mounts. Iranian production has reportedly dropped below 2.6 million barrels a day, while Venezuelan production has dipped to just a million a day.

     Word of a possible slowdown was leaving oil in the markets as “mixed” as factory data from the U.S, Asia and Europe was seen as being weak. A weaker demand growth possibility also weighed on oil, keeping any overall weekly increase to oil prices this week as limited.



U.S inventory report

The Energy Information Administration’s inventory report last Wednesday was a little startling.

     U.S crude inventories dropped by 9.6 million barrels, while gasoline also dropped 4.6 million barrels.

     Distillate inventories were also down, but by 4.1 million barrels, lending some upwards support to prices.

     Refiner capacity was recorded at 88.9 percent, still not showing a good uptick on refiners getting back to work.



That’s it for this week!



Regards, to all,



George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, March 21st, 2019

Hi to all,

Here’s what I have for this week’s price changes. Keep in mind that winter blending is still in effect:

*Heating and stove oil show a drop of 1.2 cents a litre.

*Diesel fuel shows a drop of 1.8 cents a litre, and...

*Gasoline shows an increase of 1.8 cents a litre.

Refiners still offline

While refiner capacity is still lower than normal, inventories of gasoline are under pressure as gasoline stocks are not being replaced as readily as they would be if capacity was up.

     With capacity down to 87 percent, there’s still about six percent of production not entering the markets that probably won’t return until refineries come back from seasonal maintenance.

     I’m watching inventory numbers to see when refineries come back, that should bring some moderation to gasoline as the days go on.

OPEC waits until June for further cuts on production

OPEC has announced it will delay a meeting set for April that would have included a decision to extend cuts, to June, adding more speculation that the group is relatively happy with the performance of oil in response to cuts made in December.

     OPEC believes that the cuts are successfully taking a bite out of a world glut of oil and matched with news March 14^th that Venezuelan production dropped by another 142,000 barrels in February, prices have been reasonably stable for the group.

     Venezuelan production is now a rough one million barrels a day.

Distillate prices worth watching

As the International Maritime Organisation deadline of January 1^st, 2020 comes close, it’s worth noting that there is a predicted shortfall of “clean distillates” that could play into the markets, raising prices for distillate product like diesel fuel, heating and stove oils.

New IMO 2020 regulations calling for lower sulphur content in marine diesel fuels is causing some speculators out there to think about the availability of distillates. New regulations are setting new sulphur levels from 3.5 percent down to a half percentage point by January 1^st of 2020 to combat carbon emissions. Some wonder if the diesel, heating and jet fuel markets will also be under added pressure in pricing as a result even though the new regulations affect marine diesel users, potentially the largest user group next to airlines and consumers.

Federal budget goodie

While I haven’t gone fully into the budget, one detail did stand out to me as a consumer: that the federal government will be allowing for a $5000.00 tax credit for electric or hydrogen fuel cell vehicles under the price of $45,000.00.

     Just might be helpful to those of you who may be looking for that “alternative”.

That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, March 14th, 2019

Hi to all,

Here’s what I have for this week’s price changes. Keep in mind that winter blending is still in effect and that it mat throw off the distillate numbers a little.

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

*Diesel fuel shows an increase of 8/10ths of a cent, and...

*Gasoline shows an increase of two cents a litre.

Market highlights

CBS prices drop below Costco-for a short time.

In what may seem to be an oddity to some, for the first time in years, prices in Conception Bay South-went south- to a low of $1.11.9 at the pumps, while Costco, the major St. John’s player remained at $1.12.9 a litre.

        It didn’t take long for Costco to send a message however, that hopefully will be responded to by other St. John’s and northeast Avalon retailers. Costco dropped prices below CBS after a short time to sit at $1.10.9 at the pumps.

        Other retailers are selling at present for $1.17.9 while the majority are at $1.20.9 a litre.

        Keep an eye out for falling prices near you! The regulated maximum is at $1.21.7 a litre. Could mean a savings of up to $8 based on a seventy litre fill!

Venezuelan production falls again

Venezuela continues to feel the effects of economic unrest as crude oil production continues to retreat, this time to fall below 1.1 million barrels a day by another 60,000 barrels as measured for February month.

     The economic unrest has also shut off electricity in some areas of the country, possibly aggravating the situation.

     The figures from S7P Global are the most recent info I have, but OPEC information will also be available in the coming days that will no doubt, highlight both OPEC+ cuts as well as a drop in Venezuelan production.

Iran sanctions starting to kick in

Already under sanction, Iran will most likely start to feel another pinch soon as exceptions were made in exports to other countries as long as those countries took the time to find other suppliers.

     Countries such as China, India and Japan were given upwards of six months to make arrangements from other exporters so there’s an expectation that Iranian production will only start to fall back and start to take a bite out of world supply.

      Expectations are for Iranian exports to fall back from 3.7 million barrels a day in May 2018 to 2.7 million a day by the time sanctions fully take hold May 2019.

US inventories

The Energy Information Administration’s inventory report last week showed a build in crude inventories as some refineries remained down for regular maintenance. Capacity stalled at 87.1 percent while both gasoline and distillates showed a drop, gasoline down by 4.2 million barrels and distillate down 2.4 million.

     U.S domestic production remained at 12.1 million barrels a day.

That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, March 7th, 2019

Hi to all,

Here’s what I have for this week’s price changes. Keep in mind that winter blending is still in effect, so it may throw off the numbers a tad.

*Heating, stove oil and Diesel all show no change this week.

*Gasoline shows an increase of 3.6 cents a litre at the pumps.

Market highlights

U.S inventories surprise

The U.S Energy Information Administration’s weekly report on Wednesday last week surprised the markets a little as crude oil was recorded well down from analysts predictions.

     While most predicted a drop, some around 2 million barrels, the actual numbers showed a drop of 8.6 million barrels.

      The surprise was twice over as gasoline supplies dropped 1.9 million barrels while capacity was recorded at 87.1 percent.

      Distillates dropped 300,000 barrels over the last week.

      The next EIA inventory report is due Wednesday.

U.S-China trade talks continue

The U.S and China tariff dispute may be coming to an end, at least that’s the feeling among some speculators as oil prices responded to the news on Friday.

     Refined prices also responded, with gasoline rising sharply as demand was thought to pick up along with anticipated oil demand if the talks prove successful.

     Any removal of tariffs from Chinese goods coming into the U.S will be seen as a spur on demand that would increase consumption.

Canadian dollar slides again

The Canadian dollar lost ground against the U.S Greenback again this week as oil price gains didn’t spur a rise in the Canuck buck.

     Data on Friday showed a stagnation in Canada’s economy with this country recording the slowest growth in almost three years, partly  due to a downturn in oil prices and activity.

     The Canadian dollar lost an even two cents against the U.S Greenback since last Wednesday.

That’s it for this week!

Regards,

George Murphy

Twitter GeorgeMurphyOil

Price changes for Thursday, February 28th, 2019

Hi to all,

Here’s what I have for this week’s price changes. Keep in mind that winter blending may throw off distillate prices a little:

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

*Diesel fuel shows an increase of 3/10ths of a cent a litre, and...

*Gasoline shows an increase of two cents a litre.

Market highlights

Trump tweet sends oil downwards-Monday

It’s not often you see it, but when the U.S president sees oil rise, and then reacts, it’s amazing to see the markets react as much as they did on Monday.

     Trump tweeted:  “Oil prices getting too high. OPEC, please relax and take it easy. World cannot take a price hike-Fragile”

     Oil prices retreated on Monday, losing over $2 US according to US Energy Information Administration data.

 

Added value to heavy crude could benefit this province

A story I read online on Oilprice.com talking about Venezuela’s heavy crude has me thinking...

    The story at the supplied link talks about a possible shortage of heavy crude oils on the markets that could potentially run short as a result of sanctions and political strife in Venezuela.

     But the article also talks about infrastructure issues here particularly in central/western Canada, but not mention the situation here off the coast of Newfoundland and Labrador.

     We’ve got a fair bit of heavy crude off our shores now.

     But remember, with sanctions against Iran, OPEC production cuts and possibly further disruptions coming from Venezuela and a lack of infrastructure to get it out of central Canada, this province may be in line to benefit by the shortage.

     I’ll keep an eye to further moves in heavies...

U.S inventories

U.S crude inventories were up over the last week ending February 15^th with crude adding 3.7 million barrels.

     Inventories of distillate and gasoline both dropped by 1.5 million barrels on 85.9 percent capacity as refineries remained partially shut down for routine maintenance to make ready for spring production of gasoline.

     U.S domestic production added another 100,000 barrels bringing U.S domestic production to an even 12 million barrels a day.

That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, February 21st, 2019

Hi to all,

Here’s what I have for this week’s price changes. Keep in mind that winter blending is still in effect, so the distillate numbers may be off somewhat.

*Heating and stove oils show an increase of 3.4 cents a litre.

*Diesel fuel shows an increase of 3.7 cents a litre, and...

*Gasoline shows an increase of 4.3 cents a litre.

Market highlights

Saudi Arabia expands production...cuts

Surprise!

     OPEC member Saudi Arabia announced last week that it would add another 500,000 barrels a day to cuts already made with other OPEC and non-OPEC nations in a move designed to help support oil prices.

     The cuts would start in March and add to the 1.3 million barrel a day cut agreed to by those enations in November. The surprise announcement helped boost oil prices another $3 US over the past week.

Refiner production down

Ironic as it may be, just as prices for gasoline start to ramp up ahead of the spring run-up to the summer driving season, refiners are shutting down for maintenance and to do the switch from mostly distillate production to gasoline.

     It may be February, but with a 45 day delivery time from the oil patch to consumer, there’s really not that much time before we enter spring, or at least south of the border anyway.

     With speculators eying the summer driving season, it stands to reason the same time every year, that a run-up in gasoline spot prices is also quick to follow.

Eye on Venezuela

US sanctioning of Venezuelan imports of crude haven’t had too much effect on Venezuelan production...yet.

      January production of crude oil was measured at 1.1 million barrels a day, down 59,000 barrels from the month previous, but down almost thirty percentage points for the same time period a year earlier.

      US sanctions have helped support the price of West Texas Intermediate as any sour crude from Venezuela has resulted in replacement from American and other sources.

      I’ll be keeping an eye for any other signs of disruptions here as any may cause further increases in price if supply can’t be met through other sources.

That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, February 14th, 2019

Hi to all,

Here’s what I have for price changes for this week, all data in:

Keep in mind winter blending, which may throw off the distillate numbers a little!

*Heating, stove oil and Diesel all show an increase of 1.2 cents a litre, and...

*Gasoline shows an increase of 1.7 cents a litre at the pumps.

Market highlights

Saudi Arabia to add to cuts

In an effort to support prices and indeed increase them, Saudi Arabia announced yesterday that it would add more cuts starting in March.

     While previous cuts of 800,000 barrels have already started to hit the markets, the additional cuts will bring Saudi output of crude oil down to 9.8 million barrels a day.

      Saudi Arabia is possibly trying to reach a balanced budget point for the year, but according to the International Monetary Fund, they need oil priced at $80 US to do it.

     Keeping a close eye to this piece of news as the cuts come immediately leading into the spring run-up as we head to the summer driving season.

U.S and China trade talks on again

Trade talks are on again between the U.S and China as we quickly approach their own March 1^st deadline.

     Speculators are optimistic that if tariffs are still in place by that time, then the likelihood of a further slowdown in the Chinese economy will occur, thus driving the price of oil down again as a result of lower demand.

EIA predicts new production in the U.S

The U.S Energy Information Administration predicts that U.S domestic production will hit 13.2 million barrels a day through the year 2020, if the present trend holds out and oil prices stay steady or increase further.

     U.S domestic growth has increased to the point that it is now the highest it has been in recent memory. Since 2008, oil production in the U.S has increased almost six million barrels a day.

That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, February 7th, 2019

Hi to all,

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

*Heating and stove oils show an increase of 2/10ths of a cent a litre.

*Diesel fuel shows an increase of 3/10ths of a cent, and...

*Gasoline shows an increase of 5/10ths of a cent a litre.

**Keep in mind that winter blending may throw off the distillate numbers somewhat.

Market highlights

Keep watching Venezuela

The political situation in Venezuela is being watched closely as political protests continue. But the real possibility of revolution in Venezuela still weighs on the markets, even though sanctioning of Venezuelan crude has been put in place.

      While sanctioning keeps their crude out of the U.S, it also means that the U.S has to look for other sources of crude oil to replace supplies lost from the South American country.

      U.S domestic production is believed to be one real possibility as crude prices or West Texas Intermediate have risen more noticeably than Brent. Brent prices, in the meantime, have risen in recent weeks also, but are probably more influenced by upwards pressure from OPEC Plus (OPEC and non-OPEC producers) cuts that have nnot really taken a full bight of the markets as of yet.

What’s holding oil back?

With all the word on a possible drop in exports from Venezuela, it’s the weight of disturbing economic news that also permeates the markets.

     Economic growth just about stagnated in the Eurozone during January month, sending ripples through the markets and signifying that all may not be well with projected demand that would help bolster prices.

     It was a slowdown in the Chinese economy last month, but any signals from Europe would only bolster the thought that any slowdown is underway.

Electric vehicles to impact oil?

I remember a number of years ago, King Fahd I think it was, said that the Kingdom had fifty years more to sell oil and make whatever it could from the riches it had been given.

     His prophecy may come true.

     With a caveat about rare earth minerals, the Bank of America has stated that the advent of the electric vehicle will kill overall demand growth for crude oil by the year 2030.

     That has huge implications as rare earth metals such a lithium and cobalt, predominant metals in electric vehicle batteries are only recently being explored. Countries in Central America have the most promise, says the bank, and if more is found, then the predicted growth in demand may indeed falter. Oil demand itself may peak amidst predictions of a collapse in demand growth, and may in fact drop off again as other alternatives besides crude oil become readily available to world consumers.

That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, January 31st, 2019

Hi to all,

Here’s what I have for this week’s price changes. Keep in mind that winter blending is still in effect and that may throw off the distillate numbers slightly!

*Heating and stove oil to drop by 1.9 cents a litre.

*Diesel fuel to drop by 1.5 cents a litre, and...

*Gasoline to drop by 3.5 cents a litre.

Markets were topsy-turvy this past week as weak economic data was mixed with inventory numbers that sent speculators wondering where it would all end.

     Inventory data this past Thursday suggest that demand for gasoline is off for now, but margins are still good for distillate fuels like heating, stove oil and diesel. With those fuels still in a high demand phase with colder weather in central regions of North America, refiners are still operating at just shy of 93 percent capacity to take advantage of the situation.

     Crude oil is still also gaining inventory, with crude adding eight million barrels and gasoline adding another 4.1 million to an ever expanding inventory ahead of the spring run-up in prices.

     In spite of colder weather, particularly in the central US and Canada, distillate inventories only dropped 600,000 barrels on the week.

     In the meantime, big troubles may be on the way for Venezuela politically, but oil increased today as the U.S placed sanctions on the Venezuelan state-owned oil company Petroleos de Venezuela SA.

     Increasing violence and tensions are mounting, adding the possibility that supply disruptions could result if a shutdown to the oil industry occurs.

     Venezuelan production has dropped to close to 1.1 million barrels a day, and could drop further if violence ensues in the South American country.

     Still no word from the federal Competition Bureau in Ottawa as I filed a complaint regarding the sale of Ultramar gas stations to Irving some time back.

     Places such as Conception Bay South have lost the competition between companies that I believe is costing them lower prices at the pumps as of late. And with the added closure of a Canadian Tire gas bar here beside the Ultramar station , consumers here are pretty much left with three of the larger companies who’s prices have crept up and left one company in more than a dominant position, I believe, in the CBS market particularly.

     The loss of the ValueMax program along the shore, not to mention the benefits of Canadian Tire has meant that consumers don’t have as much say on lower prices. CBS gas station prices are now a few pennies above most prices in St. John’s, a condition that hasn’t happened in years.

      Prices here are still somewhat below the regulated maximum, but not as much as they used to be. I’ll let you know if I do hear anything back...

That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, January 24th, 2019

Hi to all,

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

*Heating and stove oil shows an increase of 1.7 cents a litre.

*Diesel fuel shows an increase of 1.4 cents a litre, and...

*Gasoline shows an increase of 1.9 cents a litre.

Keep in mind that “winter blending” may throw the distillate numbers (heating, stove and Diesel) off slightly.

Market highlights

Oil climbs this week, but...

Oil prices increased this week as OPEC cuts started to take hold of the markets, but it may have been short-lived.

     Disappointing economic news from China, along with fears of a worldwide economic slowdown bordering on recession sent oil prices lower today after reaching a two month high of $63 and change on Friday.

      Chinese expansion was reigned in at 6.6 percentage points in 2018, far off from a “usual” nine percent plus. It’s the lowest read on Chinese growth in thirty years.

       That wasn’t the only piece of news that sent oil lower today. The International Monetary Fund, or IMF, also said that projections for world economic growth are lower than previous predictions setting the new number at 3.5 percent from the 3.7 percent previous estimate, indicating a lower demand for crude oil and it’s refined products.

US inventories

US inventories recorded a drop in crude oil stocks for the first time in weeks as crude supplies declined by 2.7 million barrels.

     Gasoline inventories were up by 7.5 million barrels, while distillate stocks increased by three million barrels.

     U.S domestic growth was up another 200,000 barrels with production there now sitting at 11.9 million barrels a day.

Rig count lower

US drilling rigs operating in the field was down again last week as the rig count dropped by 25 according to Baker Hughes weekly count.

     There are now 1050 operating drill rigs in the U.S now, a full 114 more than the same week last year. 

     But with the prospect of oil heading lower, there is a chance that we could see more rigs fold up operations again, sending U.S domestic production lower, and the world economic prospects at the moment aren’t all positive.

That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, January 17th, 2019

Hi to all,

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

*Heating and stove oil to increase by 3.4 cents a litre.

*Diesel shows an increase of 3.6 cents a litre, and...

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

Market highlights

Gasoline prices remain on the moderate side as inventories of crude oil still being soaked up by refiners churn out added gasoline stocks that simply aren’t being used. While refiners are enjoying good margins for distillates like Diesel and heating oils, they are also turning out gasoline that for the moment faces no demand pressures like the distillates do. Gasoline spot prices have remained almost steady to a couple of tenths as inventories show lots on hand in the low demand season.

     Margins are also healthy as new regulations around distillate fuels will be coming into force in 2020 as rules around sulphur content take hold. As these new regulations take hold for all distillate users, some are saying there could be a market shortfall of distillate fuels that will increase it’s value as 2020 gets closer, and that is also part reason why we’re seeing elevated prices for those fuels.

U.S inventories

Inventories meanwhile, also are enjoying the upside as gasoline gained 8.1 million barrels in the latest U.S Energy Information Administration report last Wednesday. Refiner capacity remained well above 96 percent and distillates also saw a massive gain of 10 million barrels.

     U.S domestic production increased again, but this time by a barely noticeable two thousand barrels a day, so essentially remaining close to 11.7 million barrels a day.

     The U.S rig count also dropped by seven rigs as the possibility of lower oil prices may be taking a bite out of working rigs. There are 1138 rigs operating in the U.S up to January 10^th.

That’s it for this week!

Regards,

George Murphy

Twitter: @GeorgeMurphyOil

Price changes for Thursday, January 10th, 2019

Hi to all,

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

Distillate prices are subject to “winter blending” so they could potentially be off slightly.

*Heating and stove oils to increase by 1.9 cents a litre.

*Diesel fuel to increase by 2.1 cents a litre, and...

*Gasoline to increase by just 6/10ths of a cent a litre.

Market highlights

Oil rises for the first week of 2019

It is usual for market speculators to look at the first five days of any New Year and make predictions that the year in question will be a good one.

     If that is the case, then the first five days of trading this year may be an indicator that oil prices will rebound somewhat, probably to within OPEC’s target range of $70 US a barrel.

     With oil rising for the first five days, market speculators have sensed that OPEC’s round of cuts will soon take hold and are seeing the December cut in production as being positive for rising oil.

     Markets responded positively to news that OPEC members successfully lowered production by 530,000 barrels a day for the month of December.

Canadian dollar rises

The Canadian dollar increased roughly  three cents against the U.S greenback over the last nine days with the dollar trading at $1.3638U.S on the 28th of December to today’s $1.3293.

      With the rise in the dollar, consumers gained a little with refined product prices. For each penny the Canadian dollar gains, the rough equivalent of close on three quarters to a full penny is saved by consumers.

U.S inventories tell a story

U.S refiners may be looking at adding more refiner capacity just to “soak up” added oil inventories in recent weeks.

     With crude inventories expanding to 441 million barrels in the U.S, almost eight percentage points over their own five year averages, refiners have turned up production to try to bring the crude levels down.

     But are they succeeding in supporting prices?

     While oil prices have increased, West Texas Intermediate prices have not increased at the same rate as Brent prices, with the differential between the two expanding by $4 US with Brent rising faster than WTI.

     Refiners are left in a quandary, that if they can’t export enough to the outside, then they are left to try to refine it to remove it from inventory.

     The problem they have this week in the numbers is that, while crude inventories remained steady, gasoline showed a massive gain of 6.9 million barrels, while distillates showed an increase of 9.5 million barrels. Another such build as this week showed, anything else added may complicate inventories as a consideration to the sell price to the end user in spite of rising oil, and that squeezes margins.

     Refiner capacity was recorded at 97.2 percent with the data for the week up to December 28^th.

      U.S domestic oil production also remained steady through the Christmas holidays at 11.7 million barrels a day.

      That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, December 20th, 2018

Hi to all,

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

Keep in mind winter blending as that mix may throw off the distillate numbers somewhat, and also that there is EXTREME volatility in the numbers that could be pointing the numbers lower than what I have here now.

*Heating and stove oils show a drop of 8/10ths of a cent a litre.

*Diesel fuel shows a drop of 9/10ths of a cent, and...

*Gasoline shows a drop of 1.3 cents a litre.

Market highlights

OPEC cuts ineffective?

Talks of a slowing world economy not only sent the stock markets into a volatile condition the last few days, but oil is also starting to pay the price on a possible slowdown.

     With less demand for oil in a slowing economy, the prospects of absorbing a glut worldwide is becoming doubtful. Growing shale production in the U.S has seeded doubts that oil prices will have support as more oil is seen to be added to the markets. The last two days have seen oil retreat  with even refined prices starting to trade much lower right along with it, possibly to reflected at the pumps over the next two weeks.

      The likelihood of cuts being effective is also being outweighed by word from Russia that oil production has increased there, even with the word that the country was keen to join OPEC in making their last round of cuts to oil production.

API inventories up

The American Petroleum Institute also released their inventory data late this evening that also showed a moderate build of 3.5 million barrels in overall U.S crude inventories, along with building inventories in Cushing, Oklahoma where West Texas Intermediate is traded. Oil was up there by just over a million.

      Inventories of gasoline were also said to be up just over 1.7 million barrels nationwide.

      All eyes will be on the Energy Information Administration inventory report due shortly after 12:30PM NST for further word on oil inventory, as well as any growth in U.S domestic production figures.

That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, December 13th, 2018

Hi to all,

Here’s what I have for price changes for this Thursday.

ALL DATA IS IN, SO THERE WON’T BE A NEED FOR A WEDNESDAY UPDATE.

*Heating and stove oils show an increase of 1.2 cents a litre.

*Diesel fuel shows an increase of 1.6 cents a litre, and...

*Gasoline shows an increase by an even penny.

Market highlights

OPEC+ (Plus) institutes production cut

Both OPEC and non-OPEC members, otherwise known as OPEC+ have agreed as of Friday past, to institute a round of production cuts that amounts to a little over a million barrels a day with OPEC absorbing about 800,000 barrels of that.

     The agreement between the two groups is for six months and totals close to 1.2 million barrels.

     Exempt from making any cuts are Venezuela, Iran and Libya who are all under production pressures, but Iran having been placed under sanction by the U.S and other counties.

Canadian dollar loses ground

The Canadian dollar lost more ground against the US dollar over the last week losing about two cents against it’s southern counterpart.

      Weakness in resource prices like oil is mostly to blame, but a busy U.S economy also figures into the equation.

Expect market instability

Markets will be shaky the next few weeks and months as markets weigh evidence that the cuts will have some sort of positive impacts on prices, but there are a couple of other factors worth watching.

     A worldwide economic slowdown is seen as being on its way as stock markets have shown. Lower than estimated returns have spurred the thought that there has been some downturn in demand and that has been reinforced with OPEC making cuts to what some believe as an “over-supplied” oil market.

     A tit-for-tat spat between the US and China continues, even though a 90 day truce was agreed upon early on Saturday as both countries try to find a solution to their trade issues. Tariffs placed on Chinese goods were enough to bare watching as a slowdown in the Chinese economy is said to be starting. However, late news this evening includes a telltale sign that China may not be hurting as much as first thought as imports of oil in November hit ten million barrels a day for the first time ever.

That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil

709.240.1920

709.685.6186 cellular

Price changes for Thursday, December 6th, 2018

Hi to all,

Here’s what I have for this week’s price changes. Keep in mind that the distillate fuels are subject to winter blending, so they may be off slightly.

*Heating and stove oils to drop by 2.4 cents a litre.

*Diesel fuel to drop by 2.5 cents a litre, and...

*Gasoline to drop by 8/10ths of a cent a litre.

These numbers will be adjusted again via social media Wednesday morning when the last data-point becomes available.

Market highlights

Alberta and OPEC both to cut production

In what some may think to be an unusual move, Alberta will do as OPEC countries have long been doing to support prices from time to time. For the first time I can think of, Alberta will cut back oil production by 325,000 barrels a day in order to try and support prices for their land-locked oil resources.

     By limiting production by 8.5 percent, the Notley government is hoping that the price for Alberta crude oils will rise, thus increasing their revenue take and helping to keep Alberta fields working.

     Meanwhile, in the Middle East, and after the G20 meetings in Argentina, both Saudi Arabia, other OPEC members and Russia are talking about an initial production cut of 1.3 million barrels a day. But latest talk out of the Middle East is signaling that cut may be reduced to a million barrels a day as Alberta has taken over 325,000 thus making OPEC think twice about cuts that were to be brought in.

      We’ll find out later this week exactly how much OPEC will cut production by later this week when OPEC meets again in Vienna.

    

US-China trade war ceasefire

The US and China have signaled their intent to call a 90 day ceasefire in their trade war in an attempt to reach an agreement on the imposition of tariffs on goods manufactured in China.

      The Chinese were countering the tariff call by the US with a call for a twenty five percent tariff on imports of U.S crude. While oil increased in price just a little, it has since flattened out on doubts an agreement could be reached.

      Concerns over oil prices arose with the possibility of Chinese economic troubles had tariffs been placed on Chinese goods and oil fell appreciably as a result. Mind you, Trump has said that placing major tariffs on China remained a possibility if the US doesn’t achieve what it believes to be a fair deal on trade and

Global economic slowdown on the way?

Concerns over a global economic slowdown continues to weigh against oil again today as some companies continue to report lower than expected earnings.

      The issues of lower earnings seem to rise every few days in the markets and that weighs against oil as demand is seen to possibly slip with any worldwide slowdown.

Crude averages for this year so far

Merrill Lynch is reporting that the average price for Brent so far this year is $72.80 a barrel, while West Texas Intermediate coming in at $66.10 a barrel US.

      Brent has averaged $72.86 a barrel between April 1^st and the end of October according to my numbers.

      Pretty close!

      The province has said it thinks Brent will average $74 US a barrel for this fiscal year.

That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil

Trump taking credit for lower oil? You're kidding, right? Price changes for Thursday, November 29th, 2018

Hi to all,

Here’s what I have for this Thursday’s price changes. Keep in mind that these numbers will be updated to contain Tuesday data in the final numbers. Also, distillate fuels like heating, stove oil and Diesel may be off slightly due to winter blending.

*Heating and stove oils show a drop of 5.2 cents a litre.

*Diesel fuel shows a drop of six cents a litre, and...

*Gasoline shows a drop of 3.2 cents a litre.

Market highlights

Trump tries to take credit for lower prices

     Donald Trump is trying to take credit for lower prices, but the reality of his words may come back to haunt him.

     Why?

     Well, the lower that oil prices go south of the border, the more likely he is to damage the growth in U.S domestic production!

      For some time now, growth in the shale fields was based simply on more money earned for a higher oil price, so lots of junior producers and some majors went back to the drilling fields and domestic production blossomed right along with it.

      But now that oil prices are slipping, the prospect of better profit margins is slipping away. Some may be taking that sober second thought about entering the energy field while such insecurity reigns. And the Saudi’s and OPEC may be quick to lash out.

      Will he be so quick to take credit if the markets collapse again?

Saudi Arabia and OPEC worried?

       While oil prices have been slipping, the prospect of lower revenues to Middle Eastern exporters again is coming into focus with most of that pointing directly at Saudi Arabia, who have to be worried that unrest again will bring unease within its borders as happened in 2014.

      The last time prices collapsed, the Kingdom was left with much lower revenues and was forced to cut back on some major programming, and faced a larger than usual problem of keeping everyone happy who had been drawing from the kingdom’s riches.

       If the Saudi’s and OPEC, in concert with Russia, decide to cut production, it could have the reverse effect and open the markets to the whims of growing U.S domestic production, thus complicating their end desired result.

       If they maintain present levels, the markets may see it as over-production and that would likely send oil lower causing grief within its borders.

Demand lower?

      Trump’s tariff war against China is helping to send oil prices lower.

      As the prospect of an economic slowdown as a result of tariffs on goods from China into the U.S grows, the promise of lower oil use in China, the world’s second largest consumer, is also weighing on the markets.

      In the meantime, U.S inventories reported a build in crude oil inventory in spite of an increase in refiner capacity.

      Distillate inventories were also down, but less than expected and gasoline inventories reported a drop of just shy of 1.3 million barrels.

That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil   

Price changes for Thursday, November 20, 2018

Hi to all,

Here’s what I have for price changes for this week. Keep in mind that these numbers will be updated by 10:00AM tomorrow.

*Heating and stove oils show a drop of 2.4 cents a litre.

*Diesel fuel shows a drop of 2.5 cents a litre, and...

*Gasoline shows a drop of 2.2 cents a litre.

Market highlights

OPEC meets in December

OPEC will meet the first week of December to discuss measures to help support the price of oil from falling further.

     Those measures may include a more extensive cut by a million barrels a day by OPEC members to help support prices. Saudi Arabia, just two weeks ago, stepped into the falling price issue and announced they would curtail exports by 500,000 barrels a day, a move that wasn’t seen by market analysts as being enough to help.

Oil falls further on earnings and economic reports

Oil prices fell almost seven percentage points again today as lower than expected earnings reports signalled a world economic slowdown was in the works.

     Any economic slowdown also sees demand for crude oil drop along with it, part reason why the panic sell-off was on again in the markets today.

Oil inventories up

Oil prices weren’t helped any this past week as inventories were up, according to the Energy Information Administration’s inventory report.

      Inventories of crude oil were up again, this time by 10.3 million barrels against an expectation of 2.2 million barrels.

      Gasoline inventories were down by 1.4 million barrels, while distillate inventories dipped by 3.6 million barrels.

      Refiner capacity was measured at 90.1 percent as refineries were mostly down for winter switchovers and maintenance. This was not seen as an issue with prices as, when capacity picks up, inventories of refined products would be in better shape than what was shown this past week.

     The next inventory report is due Wednesday from the EIA.

     That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, November 15th, 2018

Hi to all,

Here’s what I have for this week’s price changes based on SIX days data. These numbers will be updated again via social media and Twitter sometime tomorrow morning when I have the seventh day. I expect these numbers to be more of a drop than what I have here.

Here’s what I have so far:

*Heating/stove oil and Diesel fuel all show a drop of 1.2 cents a litre.

*Gasoline shows a drop of 2.8 cents a litre.

Market highlights

Saudi Arabia to reduce exports

Saudi Arabia didn’t come right out and say it on production cuts, but they did announce a 500,000 barrel a day reduction in exports.

     There is a difference...

      Now OPEC officials will discuss a possible cut in production of upwards of a million barrels a day starting in 2019 to offset what some are considering as an over-supply issue.

      Latest OPEC production figures show the group producing 155,000 barrels more in October month that helped offset Iranian cuts to exports by close on 50,000 barrels a month, signaling that Iran’s shortfall can be more than fulfilled in the oil markets.

Canadian dollar gets pounded

As oil sinks a little lower, the Canadian dollar has lost more ground to a strengthening U.S greenback, losing close on two cents in the last week.

      For every penny lost, consumers lose about 8/10ths of a cent at the pumps as a result making a drop at the pumps a little less than what it should be had the currencies been at par.

Lower oil could exacerbate oil availability down the road

While oil prices sink lower, the prospects of supply to the markets starts to come into question as revenues fall off.

      Venezuelan production had already dropped off to 1.2 million barrels a day from over two million a few years back, and is widely expected to drop below a million a day as economic and political woes weigh on the South American country. If oil slips further, problems with keeping wells producing start to show and wells begin to shut down, so much so that markets may face a shortfall in the long term

       The problem already happened between 2014 as oil prices sank amidst world over-supply, and prices only began a recovery as soon as the over-supply was drawn down. Between a possible OPEC cuts in 2019, faultering production in Venezuela and a possible slowing of U.S domestic growth as a result of lower prices, oil itself may not be on such a slippery slope as some may think.

That’s it for this week!

Regards,

George Murphy

Twitter: @GeorgeMurphyOil

Price changes for Thursday, November 8th, 2018

Hi to all,

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

*Heating and stove oils to drop by 3 cents a litre. (3.5 cents)

*Diesel fuel to drop by 3.1 cents a litre (3.3 cents), and...

*Gasoline to drop by 3.8 cents a litre (3.6 cents).

            This is the last week where I will have seven day data ahead of price changes to be put out every Tuesday evening.

            This is the dataset that cost a pricey $635 US a month, the cheapest that I have found. Mind you, they have since offered to discount it 25%. Still pricey!

            Instead, as the second set of data I found is free, I will publish data based on six days data to be published on a Tuesday with a reconciliation for seven days of data later by noon Wednesday via Twitter and Facebook.

           Data basically comes a day later than what I have previously had.

           This week’s price changes shows how close the data can be based on seven days data with six day data in parentheses ().

            Where there are days that we have a “Monday” holiday, it may go on a five-day report with a follow-up based on six days.

             It’s probably the best I can do at this point, but I do hope it works out for those who avail of the information.

             We’ll know more on the accuracy in the next two weeks or so as I can compare price change data with that which will be the actual change that occurs.

Regards, and thanks for your patience!

George Murphy

Twitter @GeorgeMurphyOil