Hi to all,
Here’s what I have
for price changes for this Thursday:
*Heating and stove
oil to increase by 4/10ths of a cent a litre.
*Diesel fuel to
increase by 5/10ths of a cent per litre, and...
*Gasoline to drop
by 4/10ths of a cent.
Caution here: As
winter blending is a combination of jet fuel and #2 in heating and Diesel
fuels, there is a strong likelihood that heating and diesel will drop as a
result of falling jet fuel prices.
Carbon taxes may
also come into effect for gasoline, turning it 1.5 cents a litre up this week.
Market highlights
Saudi Arabia and
Russia still at it
Both Russia and
Saudi Arabia are still pumping oil as fast as they can ramp up production as
the world turns eyes to faltering economies in the face of the Corona virus
outbreak.
With world economies slowing, it is estimated that world demand has dropped by
10 million barrels as of the second week of March, much to the chagrin of two
nations who refuse to believe there’s a problem.
Estimates by IHS
Markit suggest that the demand destruction could amount to almost 20
million barrels a day, well down from the peak of 98 million barrels a day
projected for this year.
Saudi’s set to
produce more
According to OilPrice.com,
the Saudi’s are preparing to ramp up exports by another 600,000 barrels a day
starting May 1st in an attempt to flood the markets and recapture
market share.
Production
will also be set to increase by 250,000 barrels a day by then with Saudi Arabia
reaching 10.6 million barrels a day in production.
Refiners shuttering
in production
North Atlantic
Refining isn’t the only refinery forced to idle.
With gasoline margins in negative territory and jet fuel demand down 70 percent,
major companies are shuttering refineries, or throttling back production close
to 60 percent south of the border.
Valero Energy, Marathon and Philips are all reducing production and throughput
rates as gasoline is manufactured for less than the price of a barrel of oil
with gasoline demand down a clear 50 percent.
Jet fuel prices
continue to sink
As reported by the International
Air Transport Association weekly report, jet fuel demand for North America
sunk to a historic low as demand fell 59.2 percent versus the same time last
year, and jet fuels sold for 26 cents a litre.
World demand fell by close to 62 percent worldwide versus the same time last
year.
That’s it for this
week!
Regards,
George Murphy
Twitter
@GeorgeMurphyOil
Hi to all,
Here’s what I have
for this week’s price changes:
*Heating and stove
oils to drop by 1.8 cents a litre.
*Diesel to drop by
1.5 cents a litre, and...
*Gasoline to drop
by *10.1 cents a litre
*Again, I can’t
attest to the accuracy in the gasoline number, but it did trade that low
before...Two occasions...1986 and again in August 1998. As low as 15.7 cents a
litre in Monday trading.
Market highlights
Demand destruction
complete
Again this week, a
sign that gasoline has finally met complete destruction as people are home and
no gas is being consumed.
With
the world facing the Covid-19 virus fight, a fight for our very lives, markets
turned upside down with cars parked and refineries with product with absolutely
nowhere to go.
Since February 25th, the last time we saw prices increase, I have
witnessed gasoline spot prices drop an astronomical 57 cents a litre to 17
cents a litre on the markets as of business day ending Tuesday.
That’s
forty cents plus taxes.
Refiners about to
pay the price
As demand dies for
most petroleum products, refiners are soon going to start to feel the pinch
with predicted shutdowns of US refiner capacity in the works.
Estimates in the US are accounting for a 30 percent drop in refiner capacity as
demand wanes for most products, gasoline particularly as people get shut in
with the shutdown of the US economy. Demand for gasoline could see a drop of 50
percent south of the border.
And while refiners are dropping capacity, they still worry over getting rid of
supplies now on hand. Some support remains for distillates as heating oil and
diesel remain with some demand, but jet fuels fall into disfavour as flights
remain grounded.
Word has it that North Atlantic Refining has already laid off some people as
refiners try to find ways to survive the downturn that has the potential to
close some facilities along the US Northeast seaboard and the Gulf of Mexico.
March 2, 2020 shortly before the collapse, US EIA figures showed Americans
burned a record high 9.5 million barrels a day
“It
will cost you more for the plastic container than for the gas you put in it”.
That’s it for this
week!
Regards,
George Murphy
Twitter
@GeorgeMurphyOil
Hi to all,
Here’s what I have
for this Thursday’s price changes:
*Heating and stove
oils to drop by 2.8 cents a litre.
*Diesel to drop by
three cents a litre, and...
*Gasoline to drop
by six cents a litre.
Market highlights
OPEC and Russia go
head to head
There’s no sign of
Russia or OPEC backing down from their promises to flood the markets with
crude, and it looks like flooding the market may have been intended all along.
New figures on OPEC production for the moth of February show that Saudi Arabia
may have been already gearing up for greasy combat with other producers as the
lead OPEC member produced 36,000 barrels a day more than intended.
Not unusual to see a member overdo it, Saudi Arabia was always the member who
policed the others into maintaining production levels and stuck to its own
quotas quite rigidly since signing the initial production cut agreement in
January 2015.
Tankers wanted: now
at a premium
Word has it that
tanker rates are rising amid signs that the Saudi-Russia oil war has begun.
Shipping rates have increased over six hundred percent as mainly Saudi sellers
are using every tanker and sending them off to markets in Asia and Europe at
the rate of over two million barrels a day in an attempt to grab market share
from Russia by flooding the markets with cheap product.
Saudi Arabia announced last week that it would sell oil at discounted rates to
preferred customers.
Jet fuel demand
weakens
While the COVID-19
virus takes hold and people head home to isolation, strong signs of how much
impact the virus and economic meltdown is having are becoming readily apparent.
The International Air Transport Authority is reporting
a larger than normal drop in the important motive fuel in weekly, monthly and
year to year data.
Weekly data is showing that the industry is slowing at a rapid pace with demand
for product down 23.8 percent over the last week, 39.7 percent from last month
and an astronomical 47.8 percent from the same time last year.
That’s just North American travel. The rest of the world averages close to the
same.
Prices
have averaged 37 cents a litre over the last week. With no one flying, expect
these prices to drop further.
Word I am getting is that jet fuel stocks are filled to the rim with nowhere
else to put refined inventories, including at North Atlantic Refining in
Placentia Bay, NL.
Space
is running out in the face of collapsing demand everywhere, another sign that
shows the world was very close to a glut situation before the crude oil price
war started.
That’s it for this
week!
Regards,
George Murphy
Twitter
@GeorgeMurphyOil
Hi to all,
Here’s what I have
for this week’s price changes:
*Heating and stove
oil to drop by 4.6 cents a litre.
*Diesel fuel to
drop by 4.6 cents a litre, and...
*Gasoline shows a
drop of 3.5 cents a litre.
My averages still
indicate further drops for next week already in the pipeline as spot prices for
gasoline remain 6.5 cents less than the price change for this week, and 3.5
cents down from the average for heating and diesel fuels. We haven’t hit bottom
yet in Newfoundland and Labrador. There’s plenty of space for retailers to drop
prices further from the regulated maximum.
Market highlights
OPEC-Russia oil
price war
The news is
dominated by a Russia and OPEC oil price war and both sides are ready to pump more.
Or should that read Saudi Arabia and Russia?
Both countries are supposedly at odds after talks broke off on further cuts to
production on Saturday, and Saudi Arabia said it would drop all production
limits. With OPEC now backed into a corner, it is Saudi Arabia mounting back to
full production, with the Saudi’s with the most production capacity to let
loose by.
Saudi Arabia is already producing 9.5 million barrels a day with capacity that
it can ramp up to hit 12.5 million barrels a day of production as early as
three months from now.
The Russians are able to harness 300,000 barrels in an instant with another
200,000 barrels worth of capacity to spare. They're presently pumping 11.3 million barrels a day according to my last data.
The losers in all this may be the resilience of small producers in the US shale
industry who are dealing with higher production costs.
Corona virus still
hitting hard
The Corvid-19 virus
is taking its toll of refined demand and demand for crude oil itself is now at
a bargain, prompting some to buy and store at low prices, if not consume it.
But consumption has dropped worldwide with a noticeable drop in some
distillates, like kerosene, which being close to jet fuel, is readily apparent
as the airline industry is taking a hit as a result of the Corona virus.
Prices
for the refined product lost close to 32 percent compared to the same timeframe
for last year according to the IATA (International Air Transport Association)
and down 18 percent over the last month since the Corona breakout.
US EIA inventories
The latest report
from the Energy Information Administration still shows low refiner capacity as
refiners are slow to come back online from spring maintenance programs, and
what’s the rush?
Refineries operated at 86.9 percent of capacity as crude oil gained 800 thousand
barrels of stock.
Gasoline inventories took a dip as 4.3 million barrels were taken from
inventory and 4 million barrels dropped from distillate stocks.
US domestic production was pegged at 13.1 million barrels per day with still no
sign of affects of Corona.
That’s it for this
week!
Regards,
George Murphy
Twitter
@GeorgeMurphyOil
Hi to all,
Here’s what I have
for this week’s price changes, but with a warning: AS MARKETS HAVE BEEN
EXTREMELY VOLATILE, I CAN’T ATTEST TO THEIR ACCURACY.
*Heating and stove
oils show a drop of 5.6 cents a litre.
*Diesel fuel shows
a drop of 5.8 cents a litre, and...
*Gasoline shows a
drop of 7.1 cents a litre.
Market highlights
Corona virus doubts
play hard in the markets
Markets showed
extreme volatility over the regulatory period with wild swings through the
week, working spot prices from extreme lows, only to show signs of price
recovery as markets recovered again.
The extreme volatility has played into everything from spot prices for refined
commodities to everyday reliables like gold.
Markets for refined product are showing that there is a projected drop in
demand with the onset of Corona that has become a factor now in pricing. Two
weeks ago, there was some question as to how Corona would affect prices,
especially knowing that demand would slip there. While I predicted a drop in
prices, it took some time to take hold. And oil and refined products aren’t out
of the woods yet as world economic worries also hit the markets hard as a
result of Corona concerns.
China demand slips
again
While demand for
refined products remains down about 35 percent, overall Chinese oil demand has
dropped by 3.5 million barrels a day, a drop of 15 percent that has to go
somewhere. While Chinese demand falters, that crude has to somewhere, and
that’s also part of the problem.
However, that doesn’t necessarily mean that China is not buying oil while
Corona reigns. Word is that they have been buying at bargain prices in the hope
of a turn-around as they move away from the Corona virus several months down
the road. Demand may be down, but they’re still buying-for now.
OPEC+ responds?
OPEC and other oil
producing nation will meet again March 5 and 6th to discuss the
potential of production cuts. Russia is said to be thinking it over, but
Vladimir Putin is on record as stating that “Russia is happy with prices at
present levels.”
That puts OPEC into a corner if Russia holds back as OPEC could face the
potential of upwards of a million barrel per day cut to try and support prices
with Russia’s help.
And while they discuss cuts, OPEC has to realise that it may be in a no win
situation as Corona virus cuts demand to everything from manufacturing to
travel and shipping and could pound markets for months. While they struggle
with that, they also face the prospect of a build in world supplies of crude, a
two-fold issue.
Prospects of a cut ran through the markets the past few days that initially
helped support oil prices, giving oil and refined commodities a modest boost.
600,000 barrels a day seems to be the number that has been kicking around the
markets the last couple of days.
Due this week:
OPEC meets March
5-6th
US EIA inventories:
Wednesday noon
That’s it for this
week!
Regards,
George Murphy
Twitter
@GeorgeMurphyOil
Hi to all,
Here’s what I have
for this week’s price changes:
*Heating and stove
oil shows a drop of an even penny a litre.
*Diesel fuel shows
a drop of 1.4 cents a litre, and...
*Gasoline shows an
increase of 1.4 cents a litre.
Markets get pounded
by Coronavirus
With a drop in the
markets of almost 1900 points on the DOW exchange and refined commodities
starting to move lower, it’s all going to be a little more prevalent next week
than this. While the markets started down Monday afternoon, all data had
initially showed an increase to refined prices right up to Sunday night, with a
marked retreat showing late Monday night.
That trend continued today, but not enough to reverse the increase to gasoline
prices, but certainly showed itself in the down trend on distillate prices.
All numbers are trending downwards for next week on the heels of all this for
Newfoundland and Labrador as well as New Brunswick.
As Nova Scotia regulates on a different timeframe, it looks like they will be
the first in Atlantic Canada to experience a drop in gasoline prices as we head
to the pumps on Friday. So far, the numbers there indicate three cents down if
all holds in the markets through Wednesday.
The rest of us follow then in next week’s price changes.
Chinese oil demand
faultering
As a direct result
of the Coronavirus, Chinese demand for oil product is dropping sharply as
reported here as a possibility here weeks ago.
Accordingly, China demand for oil has immediately dropped by a million barrels
a day at the start of February, while refined product consumption has dropped
almost 35 percent during February month so far.
Concerns are also mounting as the world glut of oil increases with dropping
demand in China. As contagion spreads, so does consumption worldwide take a
pause as the world is about to find out in the coming weeks if the spread of
the virus is not contained.
OPEC can only hold
its breath
Talks between OPEC
and Russia are said to have failed after Saudi Arabia and Russia couldn’t agree
on how much to cut production by.
Apparently,
the Russians were not seeing eye to eye with the Saudi’s when they broached a
600,000 per day figure.
With talks now off for the time being, the Saudi’s are now in talks with both
Kuwait and the United Arab Emirates for an additional 300,000 barrels per day
cut to try and support prices.
In the meantime, while OPEC is not affected by Corona for the time being, they
are absolutely powerless to support prices while the virus runs amuck. With
industries like airlines, tourism and trade being hit hard, there’s no doubt
that inventory data will shortly see gains as a result.
We’ll possibly get a first glance at the effect of the virus tomorrow when the
Energy Information Administration releases its next set of inventory data.
That’s it for this
week!
Regards,
George Murphy
Twitter
@GeorgeMurphyOil
Hi to all,
Here’s what I have
for this week’s price changes:
*Heating and stove
oil to increase by 1.7 cents a litre.
*Diesel fuel to
increase by 1.6 cents a litre, and...
*Gasoline to
increase by 3.1 cents a litre.
Market highlights
Corona virus still
affecting distillate prices
Oil prices may be
up slightly, as are distillates, but according to the numbers, it may be some
time before distillates regain ground it lost a few weeks back.
Distillates may not gain back that ground until next fall, and that’s only if
demand returns to pre-Corona levels we saw about two months back before the
virus hit the markets hard.
To complicate things, the Chinese economy has now slowed by a
heavy 25 percent, and distillate use is still dropping in Asia as a result.
It may not look
like it, but summer is coming...
It may not look
like it, but speculators know a seasonal change that brings with it a change in
the type of fuels that sees further investment.
As happens every year, speculators start turning eyes from distillates as
demand for heating and other distillates drop off, and they turn to gasoline.
Whenever they make this turn, they look 45 days ahead and to the sunny skies of
April month, at least in the US, where it is hoped, drivers start to hit the
roads and bets are made that gasoline will be consumed.
They’re hardly wrong about the change as gasoline numbers have started to go up
in hopes that getting in early might establish a few returns in the months
ahead.
As you can see in the numbers this week, distillates are down and gasoline is
increasing just a little bit more this week. The weeks ahead may promise more,
maybe not so much, unless demand rises along with it.
US inventories
The Energy
Information Administration released its data again this last week that showed a
large build in crude oil inventories, up this week by 7.5 million barrels.
That
could be caused by refiners shutting down for early spring maintenance ahead of
the spring run-up in gasoline prices.
Gasoline inventories were recorded down by 100K barrels, while distillates were
down two million barrels.
Refiner capacity was recorded at 88 percent and US domestic production up again
to 13 million barrels a day.
That’s it for this
week!
Regards,
George Murphy
Twitter
@GeorgeMurphyOil
Hi to all,
Due to the fact
that, up to release time, I have a lack of published data, I am not in the
position to make a guess on price changes!
I have two days
data that showed no change to gasoline and a 1.5 upwards change to heating,
stove oils and diesel fuels.
However, that data
for Wednesday and Thursday are simply not enough to make the guess as prices
for oil alone started to drop after Thursday. The most important data needed
simply wasn’t available.
In spite of that,
if I happen to get data between this evening and tomorrow afternoon, I will try
and get those numbers out to everyone concerned!
That’s what happens
when you rely on the free sites!
Market highlights
OPEC+ considers
cuts to support oil
Both OPEC and
non-OPEC members are hoping to reach another agreement to deepen cuts to
production, even after signing an agreement just weeks ago to extend present
cuts to June.
OPEC feels that the extension on the cuts agreement simply wasn’t enough to
help support prices, especially in the face of a drop in world demand caused by
the Coronavirus.
Corona virus still
playing a heavy role
Demand for oil and
some refined products is till on the retreat, albeit slowing, in the face of
the Corona virus outbreak.
With the Chinese economy showing strong slowdown signs as a result, and
tempered demand for distillate products for the airline industry as China
travel slows, there is still no sign of a turn-around for oil while the virus
sweeps economies before it.
Unknown as of yet exactly how much demand is going to be affected for marine
diesels and other distillates as the cruise industry also starts to take the
force of a hit as a result of the virus.
US inventory data
The latest report
from the Energy Information Administration is out, and crude oil has again
climbed upwards adding 3.4 million barrels to total stocks.
Gasoline inventories dropped a hundred thousand barrels, while distillate
inventories added 1.5 million barrels.
US data also shows refiner capacity at 87.4 percent as refineries look towards
summer and maintenance shutdowns.
Oil and electricity
July is still a
long way away, but if low oil prices keep the trend, electrical consumers will
see a direct benefit from the rate stabilisation formula.
Projections
just a few months back showed a projected $106 a barrel Canadian cost while
recently, prices have been ranging $72 Canadian.
The electrical provider was allowed to increase prices based on a projected
increase from $86 a barrel Canadian to $106 Canadian.
The increase allowed at the time was 6.4 percent, or $6.40 on a $100 power bill.
The allowable increase to rates occurred in October, 2019.
That’s it for this
week!
Again, you might
see a second note from me if I can chase down the data somewhere!
Regards,
George Murphy
Twitter
@GeorgeMurphyOil
Hi to all,
Here’s what I have
for this week’s price changes:
*Heating and stove
oil to drop 3.7 cents a litre.
*Diesel fuel to
drop four cents even, and...
*Gasoline shows a
drop of 1.3 cents a litre.
Market highlights
Corona virus hits
again
The Corona virus
still is the talk of the markets this week as weakening China and Asia demand
hits oil and distillate fuels hard.
With airlines curtailing flights into and out of China for the next while,
distillate demand is also getting a hard hit as demand drops sharply for jet
fuels in Asia. United Airlines is the latest in a string of overseas airlines
that have curtailed flights into and out of China, and that has added to oil’s
woes.
On the oil side, as the economy has almost shut down in some areas of China, so
also has the demand for oil imports as the economy slows. And with no sign as
of yet that the virus is slowing, then so goes the fall of oil prices.
North American
demand
Here in North
America, markets are starting to turn towards the coming spring and that brings
another factor into play as spring draws closer, bringing with it the prospects
for warmer temperatures.
It’s usually this time of year we start to see a first sign of spring: where
speculators look at the calendar to see the end of winter approach, and with
it, the prospects for warmer weather and dropping demand for heating fuels.
That in itself sees waning demand also for distillates, exacerbated by the
weather as well as lower demand in China due to Corona.
As
speculators start the move from distillates, attention goes toward gasoline,
still showing some support even as oil prices fall. And even though gasoline is
still dropping, the fall is not as prominent as that of distillate fuels.
However, the move to gasoline may have already started as refiner capacity was
reported down by a good five percent from the week previous, possibly caused by
upcoming spring refinery maintenance.
EIA inventories
The latest US EIA
inventory report is out and the news continues to show builds in crude oil
inventories with supplies gaining 3.5 million barrels.
Gasoline inventories continued a string of builds, this time adding 1.2 million
barrels, while distillates dropped 1.3 million barrels.
Refiner capacity was reported at 87.2 percent and US domestic production
remained at 13 million barrels a day.
That’s it for this
week!
Regards,
George Murphy
Twitter
@GeorgeMurphyOil
Hi to all,
Here’s what I have
for this week’s price changes:
*Heating and stove
oil to drop by 7.4 cents a litre (5.0)
*Diesel fuel to
drop by 7.5 cents a litre (5.1) and...
*Gasoline to drop
by 5.2 cents a litre (2.7)
An explainer on
these numbers first off.
As the PUB did not
make an adjustment to prices, I am hopeful they will institute the price change
that would have happened PLUS this week’s changes which equal my total amount.
I have written the PUB asking for this method to be used, but no answer yet.
If they average for
the whole fourteen day period instead, then the numbers in parentheses will
happen. Hence, two sets of numbers.
I’m hopeful for the
former to happen as consumers will not see the full benefit of this price drop
with a fourteen day average.
Market highlights
Coronavirus fears
hit oil hard
Threats to the
world economy, in particular demand in China, have hit oil and refined prices
hard this last two weeks as the Coronavirus runs its course through China and
spreads worldwide.
With China demand slipping and further risk to the world economy, prices could
still drop further if a measure of control of the virus spread is not to be
seen.
First to be hit would be the airline industry as airlines pass on flights to
and from China as demand for travel there is seen to drop, tempering the need
for aviation fuels.
US EIA inventory
data
The latest EIA
inventory data shows a very slight drop in crude supplies with it dropping by
400,000 barrels on 90.2 percent refiner capacity
Gasoline supplies increased again by 1.7 million barrels, while distillates
dropped by 1.2 million barrels.
US
domestic production was steady this week at 13 million barrels a day. The EIA
also predicted that US domestic output will average 13.3 million barrels a day
during 2020.
OPEC+ extends their
production cut
OPEC and other
non-OPEC producers extended their supply cuts to June in an attempt to stop the
slide in oil prices.
The agreement to cut production was due to expire in March, but a decision was
reached that saw OPEC+ extend the cuts another three months.
The challenge now however, is to support oil in the face of growing sentiment
about the world economy as the coronavirus hits economies hard.
OPEC is also considering a deeper cut to its own production as it wrestles with
lower prices due a growing glut in world supplies.
That’s it for this
week!
Regards,
George Murphy
Twitter
@GeorgeMurphyOil
Hi to all,
Here’s what I have
for this week’s price changes:
*Heating and stove
oils show a drop of 2.7 cents a litre.
*Diesel fuel shows
a drop of 2.6 cents a litre, and...
*Gasoline shows a
drop of 2/10ths of a cent a litre.
Market Highlights
Libya and Iraq
disruptions
With Libyan
production only recently coming back to somewhat normal output, internal issues
of governance has one group turning back the spigots by cutting pipelines to
ports exporting crude to outside markets.
Oil exports have dropped sharply from 1.2 million barrels a day to just 400,000
barrels as fighting between two factions continues to disrupt exports.
Meanwhile, worries over possible supply disruptions from Iraq due to internal
strife and a strike by oilfield security workers also weighed on markets late
this session as Middle East tensions continue to play in the markets.
World glut worries
No exact number has
been put on it, but speculators and market traders continue to see the
possibility of a growing glut in the markets being the next factor to drop oil
prices after reaching highs two weeks ago after the US-Iran incidents that saw
the shooting down of a civilian jetliner.
A growth last week in US domestic production has also increased fears
that the growth of oil supply is very real and US inventory data also seemed to
confirm it as US domestic production hit 13 million barrels a day.
Production from us shale fields has hit an all-time record of 9.2 million
barrels a day that helped increase the domestic output figure.
US EIA inventory
data
The Energy
Information Administration’s latest inventory data released on Wednesday showed
that, while there was a drawdown in crude supplies, refined product continued
to increase.
Crude supplies dropped 2.5 million barrels while gasoline gained 6.2 million
and distillates that include heating and diesel fuels also increased, but by
8.2 million barrels.
Refiner capacity was reported at 92.2 percentage points.
Their next release of inventory data gets released Thursday due to the U.S Martin Luther King Day holiday.
That’s it for this
week!
Regards,
George Murphy
Twitter
@GeorgeMurphyOil
Hi to all,
Here’s what I have
for price changes for this week:
*Heating and stove
oil shows a drop of 3.5 cents a litre.
*Diesel fuel shows
a drop of 3.7 cents a litre, and...
*Gasoline shows a
drop of 2.9 cents a litre.
Market highlights
Middle East tension
eases...for now
Tensions in the
Middle East are still there and always will be, but both antagonists in the
latest events between Iran and the US have taken a pause as the world reacts to
the shock of the shootdown of a civilian airliner that saw 57 Canadians amongst
the lost.
Oil increased in the days ahead of the missile attacks launched by Iran last
week, but showed a steady retreat as Iran was forced to look back on itself as
people there began protesting against the leadership of the Middle East country
that now faces it’s own internal issues.
Speculators are betting on an uneasy peace while other nations, including the
European Union, show some interest in sparking talks in getting a new round of
negotiations in the search for a new nuclear weapons deal.
US EIA inventory
data
The latest report
on inventories from the Energy Information Administration is out.
The report indicates that crude oil inventories gained in the week up to last
Wednesday, rising by 1.2 million barrels.
Gasoline increased by a whopping 9.1 million barrels, while distillates that
include heating oil and diesel added 5.3 million barrels.
Refiner capacity was reported at 93 percent.
US domestic production was reported at a steady 12.9 million barrels a day.
Marine diesel and
new rules
New regulations
around sulphur content in bunker type crudes is now in effect.
Starting in January of this year, new regulations governing the use of heavy
sulphur crude and bunker type fuels came into effect with the marine transport
industry leading the charge to lower sulphur emissions.
IMO 2020 has new regulations restricting the use of heavy and dirtier bunker
type crudes in marine applications that has resulted in worldwide changes that
also has the potential to increase other distillate prices if demand cannot be
met for lower sulphur content in marine diesel applications. Questions are out
there asking if the refining industry can meet demand for lower sulphur
distillates.
That’s why we hear so much on the value of some crude oils as an immediate
source of lower sulphur content (gravity) as it can be blended with higher
sulphur content crudes to meet new environmental standards.
Recently, a type of crude known as Pyrenees from Australia sold for close
to $100 US a barrel, its sulphur content being .19 percent sulphur content and
a gravity of a little over 19 API.
That’s probably why there’s so much interest in our offshore, having some lower
gravity crude types off our own shores.
That’s it for this
week!
Regards,
George Murphy
Twitter
@GeorgeMurphyOil
Hi to all,
Here’s what I have
for this week’s price changes:
*Heating and stove
oils show a drop of 7/10ths of a cent a litre..
*Diesel fuel shows
a drop of 1.1 cents a litre, and...
*Gasoline shows a
drop of a half penny.
Market highlights
US targets Iranian
General Soleimani
The US successfully
took out an important Iranian general who the US says was the chief planner of
“terrorist attacks” in the Middle East and the man who planned an executed an
attack that took the life of an American working in Iraq.
The attack has been answered with considerable anger in Iran, who has promised
retaliation for the attack.
U.S inventories
The latest Energy
Information Administration data is out and the news wasn’t good as oil stocks
recorded a large drain on overall crude inventories.
Crude stocks dropped 11.5 million barrels.
Gasoline inventories gained 3.2 million barrels, while distillate inventories
increased 8.8 million barrels on refiner capacity reported at 94.5 percent.
US domestic production was reported at 12.9 million barrels a day.
Iran attacks
Retaliating for an
air strike that took out Iranian General Soleimani, the news is not good as
prices have (as of 9PM) been well up with WTI trading up four percent and
refined commodities, gasoline up 2.5 cents a litre, and heating oil and Diesel
up three cents a litre.
However, when it
comes to price settings for refined commodities, with prices already on their
way up, consumers can EXPECT to see a marked increase in prices as a result,
and a sharp increase if Iran tags any outlying oil infrastructure following
tonight’s attacks, similar to what happened initially when Saudi oil
infrastructure was taken out. That attack took out a rough 5.5 million barrels
of production a day.
Iran was producing close to 3.8 million barrels a day pre-sanction.
Iraq was putting out 4.8 million barrels a day as of August, the last data I
have.
Any US response or
Iranian escalation may put this output at risk, particularly if oil
infrastructure is targeted.
So, if oil spikes?
Depending on oil
infrastructure and the US-Iranian response really, as any disruption to world
oil production will have an immediate effect. We can see the Saudi disruption
from a few months back as production was knocked out for a few days may evoke
the same response as then. However, a long term disruption will probably
increase consumer prices more sharply and for an extended timeframe before full
production is met again.
However, all is
slightly different from the last Gulf War.
US domestic
production was at a low of 5.5 million barrels a day, well before the dawn of
shale resources where today, the US is producing 12.9 million barrels a day and
room for considerable growth. Again, depends on how fast they can bring
production online. Markets may simply wait it out after a spike to see if it
evokes further moves by Iran and the US.
That’s it for this
week!
Regards,
George Murphy
Twitter
@GeorgeMurphyOil
Hi to all,
Here’s what I have
for price changes for this week:
*Heating, stove oil
and Diesel fuel all show an increase of 1.2 cents a litre.
*Gasoline shows an
increase of 2/10ths of a cent per litre.
Market highlights
Colder US weather
moves distillates up
All of a sudden,
it’s cold outside.
With colder weather suddenly gripping the U.S northeast, market traders have
seen an increase in demand for distillate fuels like heating and stove oils,
and that has also played into a slight increase coming to diesel fuel prices as
well.
Spot prices for distillate fuels have moved up in lock step with oil prices
through this pricing session, and as the weather continues to be colder heading
into the depths of winter, we may not see upwards pricing pressures drop
anytime soon.
Markets tend to change their focus to distillates this time of year as colder
weather spurs demand for heating, stove oil and diesel fuel.
US-China trade deal
done?
Some movement in
trade talks has also spurred oil prices upwards this week as speculation
surrounds the markets with word that the US has suspended fifty percent of
tariffs placed on Chinese goods and services back in September in exchange for
China buying all American produced agricultural products.
In addition, the U.S will delay implementation of additional tariffs on China
that would have taken effect on December 15th.
China
has also dropped additional tariffs on US manufactured cars and other
agricultural products as there seems to be a “truce” called in what is known as
“Phase one”.
“Phase Two” talks will involve deeper talks to remove remaining tariffs and are
said to be starting “immediately”.
Estimates amongst traders say the economic damage caused by the tariff
disagreement between the two countries ranges anywhere between $160 and $250
billion dollars, not to mention the damage caused by the slowdown in the world
economy.
Oil turned slightly higher this week as some hope is showing for the recovery
of the world economy through to the end of 2020.
US inventories:EIA
The latest US
inventory report has crude oil supplies adding 800,000 barrels ahile a surprise
gain showed for distillates, adding 4.1 million barrels.
Gasoline supplies increased by 5.4 million barrels with refiner capacity
measured at 90.6 percent.
US domestic crude oil production was recorded at 12.8 million barrels a day,
down 100,000 from the previous week.
That’s it for this
week!
Regards and Merry
Christmas!
George Murphy
Twitter
@GeorgeMurphyOil
Hi to all,
Here’s what I have for this
week’s price changes:
*Heating and stove oil shows
a slight increase of a half penny a litre.
*Diesel shows an increase of
6/10ths of a cent a litre, and...
*Gasoline shows no change to
prices this week.
Market highlights
US-China trade deal close?
As a possible sign of an
agreement between the US and China in their trade dispute, the US has
reportedly delayed the imposition of further tariffs on Chinese goods and services
as a gesture of good will as a final deal is said to be close at hand.
New tariffs from the Trump government were
due to kick in December 15th as a measure to get the Chinese to bend
to economic pressure.
Oil prices rose slightly in the face of
anticipated higher demand for oil and refined products.
Propane price sticker
shock
Last week’s strong upwards
movement of propane prices was probably a shock to some consumers in the
province as prices increased by over 14 cents per litre.
As far as I know, spot prices in Sarnia,
Ontario rose sharply as a result of a strike by CN Railway that curtailed
deliveries of propane supplies from Western Canada, thus driving up prices for
any available stock.
As the strike is now over, I fully expect
to see prices retreat to more normal levels in the coming couple of days.
US Inventories
The US Energy Information
Administration has released its latest inventory data showing that crude
supplies dropped 4.9 million barrels while gasoline supplies grew by 3.4
million barrels.
Distillate supplies increased 3.1 million
barrels on a reported capacity of 91.9 percent a s refineries returned back
from maintenance programs and drew on oil stocks.
Domestic production was reported at 12.9
million barrels a day.
That’s it for this week!
Regards,
George Murphy
Twitter @GeorgeMurphyOil
