Price changes for Thursday, February 25th, 2021

 

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 shows an increase of 2.1 cents, and...

*Gasoline shows an increase of 3.9 cents a litre.

 

Market highlights

 

Oil and refined prices continue to rise

Crude oil and refined product prices continued to rise this past week as Texans dealt with a severe weather system that devastated the state’s electrical system, knocking out almost 1.1 million barrels a day in refining, and also taking out crude oil production estimated now as much as two million barrels a day as pipelines and related infrastructure froze up.

     Temperatures went as low as four degrees Fahrenheit and winter weather pounded electricity users.

      Some refining infrastructure may come back online soon though, and that may bring back some promise of lower prices as prices south of the border have risen as much as thirty cents a gallon there. Some refiners are reporting that they may not be back online and in production for another month.

      Electricity costs have also skyrocketed, costing as much as $9000 for a  megawatt of electricity.

 

Saudi’s and Russia clash on oil?

According to Oilprice.com, the Russians and Saudi Arabia may be about to clash again over the sudden rise of oil prices and the timing of a return to production cut between OPEC+ and Russia.

     While Saudi Arabia wants to keep cuts at their present levels heading into April month, the Russian energy minister Alexander Novak is on record as saying that the current price of oil is reflective of the market conditions and that markets have returned to balance.

     Russia and OPEC+ will meet again March 3-4^th to discuss the condition of the markets where it is believed that the Saudi’s will use their million barrel cut in production as a bargaining chip to attaining a new deal on production at next week’s meetings.

     Oil prices have risen sharply and has led some OPEC+ members to seek higher production levels to take advantage of the price increase.

 

US EIA inventory report

US crude oil inventories dropped 7.3 million barrels in the US EIA inventory report up to February 12^th.

     Gasoline supplies increased by 700 thousand barrels and distillates dropped 3.4 million barrels on 83.1 percent refiner capacity in the week ahead of the Texas blackout.

     US domestic production was reported at 10.8 million barrels a day for the same week.

 

That’s it for this week!

 

Regards,

 

George Murphy

Twitter @GeorgeMurphyOil  

Price changes for Thursday, February 18th, 2021

 

Hi to all,

 

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

 

*Heating and stove oil to increase by 1.8 cents a litre.

*Diesel and Gasoline both to increase by 2.1 cents a litre.

 

Market highlights

 

Texas freeze drives up prices

US refineries in Texas have been taken offline by extreme cold and electrical failures after a deep freeze struck the refining state over the past few days with temperatures in the single digits Fahrenheit.

     Temperatures were recorded as low as four degrees as the winter cold brought arctic air over the state, causing power failures that have taken half of the state’s electricity offline.

    Oil prices gained on the news as refined prices also took a climb as speculators chimed in on lost refiner capacity that could last until the cold temperatures abate and electrical repairs are made.

     It’s the first time in recent memory that I can remember capacity issues caused in Texas due to cold weather. Usually it’s all about hurricane damage. Gasoline price s have risen by 13 cents a US gallon since last Wednesday on the weather event.

     In the meantime, electricity costs in the southwestern US also took a hit with electricity prices ranging upwards of $9000 a megawatt hour from an average of $25 a megawatt hour.                             

     According to Oilprice.com, a Tesla costs about $900 to charge up under these prices.

 

Storm hits domestic production

Connected to the weather in Texas, the Permian Basin, an oil producing region near the Texas Oklahoma border also has had production disrupted, removing almost one third of US daily production out of the markets.

    Estimates are almost 3.5 million barrels a day of production has been removed from the US total domestic production numbers of 10.9 million barrels a day, causing the rise in oil prices as well. Production is not expected to return to normal levels until sometime around February 22^nd. This could be around for a bit.

 

US EIA inventory data

US refiners continued to chew into oil reserves last week (before the storm) as crude oil supplies dropped 6.3 million barrels.

     Gasoline stocks increased 4.3 million barrels, while distillates dropped 1.7 million barrels.

     Refineries operated at 83 percent capacity, just seven points below the normal before Covid hit last year, indicating higher demand.

     US domestic production was reported at 10.9 million barrels a day (pre-storm).

 

That’s it for this week!

 

Regards,

 

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, February 12th, 2021

 

Hi to all,

 

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

 

*Heating and stove oil to increase by 3.5 cents a litre.

*Diesel to increase by 3.2 cents a litre, and...

*Gasoline shows an increase of 2.5 cents a litre.

 

Market highlights

 

Hedge funds betting on summer

It’s not just about refiners having troubles moving product that has increased costs, and thus prices for consumers, but word is out that hedge funds are starting to bet on vaccine distribution that will help increase prices for oil and refined products as demand picks up right along with Covid-19 vaccine availability.

     Here in Canada, Prime Minister Justin Trudeau made an announcement that the Pfizer vaccine will amount to 20 million doses by the spring at the time when traditional run-ups in prices really starts to catch for gasoline, bringing with it upwards pressure on prices.

     To quote from the Reuters story,

   “By the summer, the vaccine should be widely provided and just in time for summer travel and I think things are going to go gangbusters,” said David D. Tawil, co-founder at New York-based event-driven hedge fund, Maglan Capital, and interim CEO of Centaurus Energy”.

      Oil prices have increased $4 US a barrel over the last week.

 

Oil to increase to $100 US?

It’s a bold prediction, but again precipitated on word of further covid-19 vaccine rollout as markets have turned their attention to the futures markets and speculators play with the scenario of returning demand.

     That means hopes for our offshore as oil will rebound-if the predictions from Amrita Sen of Energy Aspects is right.

     Speaking to Bloomberg, he said that while, right now, the markets have gotten ahead of themselves with demand still weak, vaccine rollout has the promise of increased demand in the second half of this year.

     The only mitigating factor may very well be how many producers get back into the market of production, and how fast the US production figures will be in turning back to full production pre-covid.

     US domestic production was recorded at 10.9 million barrels a day, falling from 13.5 million barrels a day the same time last year.

     Also, Saudi Arabian production is due to pick up again, adding a million barrels a day by the end of March, putting some pressure on growth.

 

US EIA inventories

The latest report from the Energy Information Administration, crude oil supplies dropped by a million barrels last week.

     Gasoline inventories were up by 4.3 million, while distillate inventories remained unchanged from the week previous.

     Refiner capacity was recorded at 82.3 percent and US domestic production reported at 10.9 million barrels a day.

 

That’s it for this week!

 

Regards,

 

George Murphy

Twitter @GeorgeMurphyOil  

Price changes for Thursday, February 4th, 2021

 

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 to increase by 1.6 cents a litre, and...

*Gasoline to increase by 1.8 cents a litre.

 

Market news

 

Markets continue to tighten supplies

Crude oil prices continued to increase this week as markets were seen to tighten supplies as Saudi Arabian cuts to production have started, with the Saudi’s promising to cut an additional one million barrels of production a day that started February 1^st.

     However, markets have been watching the possibility of another developing situation where the Saudi’s may lose market share as others jump in to fill the need left open for oil by the Saudi cut. Other oil producers like Guyana and US shale producers could be set to increase production to fill the gap immediately left by the OPEC country that left the markets with a shortfall of oil for the next two months.

     The Saudi’s are set to keep production down until the end of March 2021.

 

Goldman Sachs increases estimates

Goldman Sachs expects oil consumption to have a robust rebound to at least 100 million barrels a day by the end of August, back near levels not seen since the start of the pandemic.

     According to Goldman Sachs, oil supplies faced a deficit of close to 2.5 million barrels a day in the last quarter of 2020 that helped set prices for crude in the upwards direction. The only factor that could limit to forecast on future demand are new outbreaks of Covid-19.

 

US crude oil inventory report

The latest Energy Information Administration inventory report showed another drop in crude oil inventories last Wednesday as refiners continued to maintain capacity levels above the eighty percent mark for the fifth week in a row. Capacity was reported at 81.7 percent that maybe indicative of slowly returning demand.

     Gasoline inventories were reported up by 2.5 million barrels, while distillates were down 800 thousand barrels.

     US domestic production was down 100 thousand barrels a day to 10.9 million barrels a day.

 

That’s it for this week!

 

Regards,

 

George Murphy

Twitter @GeorgeMurphyOil  

Price changes for Thursday, January 28th, 2021

 

Hi to all,

 

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

 

*Heating and stove oil to drop by a half cent a litre.

*Diesel shows a drop of 3/10ths of a cent, and...

*Gasoline shows an increase of a half cent a litre.

 

Market highlights

 

Markets are showing crude mostly steady this past week as they weigh the impacts of Saudi cuts of an added million barrels a day due to start February 1^st, and with Russia and Iraq also cutting back on exports by an added 300,000 from Iraq, the markets are beginning to show signs of tightening crude oil supplies amidst the covid-19 pandemic.

 

Average prices may be up here, but...

Irving Oil has applied to the New Brunswick EUB (Energy and Utilities Board) for an immediate increase to all fuel prices that would rank with increases that consumers saw through the Public Utilities Board here from NARL’s request for immediate assistance two months ago.

      Irving says that it has faced severe difficulties with its company as margins have tightened against rising costs and lower demand. They have applied for an increase of 4.09 cents plus taxes on motor fuels and a 3.02 cent a litre increase to heating fuels. These numbers are about eighty percent of what they have asked for in a scheduled hearing due to happen in March.

      The hearings into the application will continue next week as more information from Irving is wanted.

       Story here: Irving Oil request for 'urgent' wholesale price hike stalls over redacted evidence | CBC News

         Refiners everywhere are facing the same problems with jet, distillate marine and transportation fuels all being hit hard from the Covid-19 pandemic with some refiners worldwide shutting their doors or reducing their production markedly.

 

US EIA inventories

The Energy Information Administration is reporting another build in US crude inventories in last week’s reporting, adding another 4.4 million barrels to crude stocks.

     Gasoline inventories were down by 300 thousand barrels, while distillates were up 500 thousand barrels.

     Refiner capacity was reported at 82.5 percent as refiners tried to chew into inventories.

     US domestic oil production was reported at 11 million barrels a day, down two million barrels a day from the same timeframe last year.

 

That’s it for this week!

 

Regards,

 

George Murphy

Twitter @GeorgeMurphyOil  

Price changes for Thursday, January 14th, 2021

 

Hi to all,

 

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

 

*Heating and stove oil to increase by 2.9 cents a litre.

*Diesel to increase by 3.2 cents, and...

*Gasoline shows an increase of 4.4 cents a litre.

 

Market highlights

Markets have been responding all week to the Saudi surprise oil production cut immediately after last week’s OPEC+ meeting where Saudi Arabia announced a further cut to their own production of an added one million barrels a day.

    Further support for higher oil was also featured in last week’s Energy Information Agency report which showed a huge drop in crude oil inventories of almost eight million barrels.

    Oil prices have been well up after the meetings with oil prices rising another $5 US a barrel over the intervening timeframe. Expectations of a tightening oil supply situation has helped increase prices as the surprise cut is said to be well above expectations of the markets.

     Brent prices closed close to $57 US a barrel today, rising from $51.80 US last Tuesday.

    

OPEC compliance drops

According to Petro-Logistics, OPEC+ compliance amongst its members fell to just 75 percent after some countries were seen to break away somewhat from imposed quotas ahead of last week’s OPEC+ meeting, but you couldn’t tell by oil’s reaction as figures were only released today.

     Other companies have had higher OPEC+ compliance numbers the past few days with numbers in excess of 75 percent.

     OPEC and non-OPEC members agreed to a 9.7 million barrel per day cut several months ago, but added more oil to the markets over the intervening months.

     Total cuts now amount to 7.7 million barrels a day amongst members as of December.

 

Refiners may still pay a price

According to reports from the International Energy Agency, worldwide refinery capacity is still over 20 million barrels over the needed capacity worldwide.

     Over 1.7 million barrels a day of refinery production capacity has been permanently closed worldwide since the start of the pandemic and it remains to be seen if it will ever return based on how alternatives have been impacting the markets.

      With countries now putting timeframes on the end of new fossil fuel vehicle sales by 2030 to 2040, it now remains in doubt whether any capacity will return, or any refineries to re-open again within the highly competitive refining markets.

 

US EIA inventories

The latest numbers are out from the US Energy Information administration.

     Crude supplies showed a drawdown of 8.1 million barrels, while gasoline inventories saw an increase of 4.5 million in the week after Christmas.

     Distillates also saw an increase of 6.4 million barrels.

     Refinery capacity was recorded at 80.7 percent, while US domestic production was steady at 11 million barrels a day.

 

That’s it for this week!

 

Regards,

 

George Murphy

Twitter @GeorgeMurphyOil  

Price changes for Thursday, January 7th, 2021

 

Hi to all,

 

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

 

*Heating and stove oil to drop by 6/10ths of a cent.

*Diesel to drop by 7/10ths, and...

*Gasoline shows an increase of 7/10ths of a cent.

 

Market highlights

 

Saudi’s surprise

OPEC schedules meetings that are meant to come to some form of consensus on the world regulation of oil supplies, but this time around was different.

     With OPEC ok with a modest increase in production to world supplies from Russia and Azerbaijan allowed an increase of 65,000 barrels a day each to meet domestic needs, Saudi Arabia announced that it would cut production by another one million barrels a day starting in February.

     While that announcement lit a fire under crude prices, outside conditions may prove to be detrimental to the Saudi move.

      With US domestic production offline, it has been given a good reason for a sharp return in the coming weeks from it’s current low of 11 million barrels a day. My guess is a timeframe of a couple of weeks where we will see a measurable return of US domestic production to meet the shortfall.

     After all, the spigots were only recently turned back while Covid rages, and could be turned back on in short order to meet the shortfall.

 

Year in review Part II

Oil continued a downturn as prices hit rock bottom. But a turnaround was soon to take place in oil prices’ slow recovery with the first announcement of a covid-19 vaccine by Oxford University, soon to be followed by announcements from Pfizer and Moderna. Oil was given a spark as anticipated demand was the prop the markets were looking for to begin July.

     August saw “peak oil” announcements from BP and Conoco Philips, with BP announcing that oil may have already peaked and oil demand dropping to 55 million barrels a day by 2050.

     Hurricane’s Laura and Zita both create production shutdowns and temporary disruptions to US domestic production numbers.

 

     September saw the provincial government announce enhancements to the provinces’ offshore drilling program with money to supplement any programs that would be undertaken by participants.

     September 25^th also saw the federal government give $320 million in aid to the oil industry through the province that formed a reason why the Oil and Gas Recovery Task Force was formed. That announcement would be a key cornerstone of how best to spend the money as part of the mandate of the task force.

     The announcement of the Oil and Gas Recovery taskforce with terms of reference will be due to report back to government by the end of January 2021.

    

     Oil prices continue a slow rise to $42 US by the middle of October with further word of the coming availability of the Covid vaccines to the population.

     Locally, the North Atlantic Refinery applied for an increase through the Public Utilities Board as an emergency measure to keep retailers in business as they had, in essence, had to rely on imports from outside of the province.

 

     November saw increasing oil prices as release dates are set for the first Pfizer and Moderna vaccines to the world market, while in Quebec, the government there announces a ban on new fossil fuel vehicle sales will come into effect in 2035 with the province joining California as the other jurisdiction bringing in the law to combat carbon and climate change.

     Three more refineries close with the closest in New Jersey. Closures total 14 in North America and Europe with many more throttling back on production or converting to other fuel types.

 

     December saw Brent rebound to break $50 US a barrel on continuing hopes of the covid-19 vaccine and future anticipated demand.

     Locally, support for both the Hibernia platform and a continuation of their drilling program, and a support program for the West White Rose projects were announced.

 

US EIA inventory data

The EIA is reporting a drop of 6.1 million barrels of crude up to December 25^th and a drop of 1.2 million barrels of gasoline stocks as a result of Christmas travel and elevated demand.

     Distillate stocks increased 3.1 million barrels on 79.4 percent refinery capacity.

     US domestic production was recorded at 11 million barrels a day, unchanged from the week previous.

 

That’s it for this week!

 

Regards,

 

George Murphy

Twitter @GeorgeMurphyOil  

Price changes for Thursday, December 31st, 2020

 

Hi to all,

 

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

 

*Heating and stove oil to increase by 2/10ths of a cent a litre.

*Diesel fuel shows no change, and...

*Gasoline shows an increase of 4/10ths of a cent a litre.

 

Market highlights

 

2020-The Year of Energy Transition

 

This year has to be called a year of energy transition. No one thing has stood out this week in the markets as markets traded for just four days over the intervening period.

     It did give me some pause for thought however, on a year where the oil industry was also hard hit by covid-19 as much as the economy was hit, so the following is the first six months of oil events I tracked this year:

 

     The first quarter of the year was a time of oil price recovery as demand factors picked up prices immediately ahead of an OPEC and Russia price war at the start of the pandemic. Both OPEC and Russia would come to a realization-probably too late-that saw oil prices crash early in the pandemic that also saw the advent of powerful alternative energy replacements for oil leaping to the forefront.

     Leading the charge is hydrogen where countries like Germany and Russia are leading change and building hydrogen powered projects and refineries/production facilities well ahead of the curb.

 

     March saw the arrival of a disease that completely shut down an oil-fired economy in North America, Europe and Asia as economies were forced to grind to a halt for months under an economic shutdown the likes this world has never seen. A crunch in demand for all fuels forced the immediate shut-down of at least fourteen refineries worldwide and a huge reduction in refining capacity worldwide that some think came close to 40 percent at one point, and still ranges down by at least 20 percent today.

      Here at home, the shutdown of the economy forced the closure/shudder of the North Atlantic refinery in Come By Chance  March 30^th as inventories of heating and jet fuels remain unsold as the demand crunch continues.

      Jet travel has collapsed almost 90 percent, leaving worldwide stocks of jet fuel unsold and left in holding tanks in refineries, causing further production disruptions.

      April month saw a disaster on the oil markets as oil prices for West Texas Intermediate  went negative for a day as stocks of oil at Cushing, Oklahoma threatened to flood the pricing centre before inventories could be sold.

     May month saw the start of OPEC and non-OPEC cuts to production that came into force on May 1^st that saw the two groups cut production by an unheard of 9.7 million barrels a day while the covid-19 pandemic rages. Oil rig counts south of the border at a historic low of 237 rigs, well down from the over 900 that were operating the year before over the same timeframe.

      June saw Canadian figures on damage to oil production. Canada drops 1.1 million barrels a day from a pre-covid level of 3.9 million barrels a day with the demand crunch biting heavily at Alberta production and production disruptions affected by drops in train shipments.

      The Newfoundland and Labrador government requests that the Public Utilities Board give a one-time rebate back to electrical customers based on lower projected costs for oil-generated electricity. The rebate will be in the form of a tax credit on consumers’ bills for June/July month.

 

     I’ll have the next six months events in the price change notice for next week.

 

Hydrogen: There I said it

Hydrogen continues to ride front and centre when it comes to a world transitioning from oil and to alternative energy sources. The number one story to me this year that records the sum-up of the transition has to be one of ongoing exploration of hydrogen as a source for fuel cells for air travel and the first flight of an airplane using hydrogen as a source of energy.

      That was in September.

       However, ZeroAvia also made a first in the annals of aviation with the first electric-powered flight in June of this year: ZeroAvia completes first UK flight of electric plane | The Engineer The Engineer

 

US EIA inventory data

      The Energy Information Administration is reporting a drop of 600,000 barrels of crude inventories this last week, while gasoline inventories dropped 1.1 million barrels.

      Distillates dropped 2.3 million barrels of inventory.

      Refiner capacity was reported at 78 percent.

      US domestic production was reported at 11 million barrels a day, remaining steady over the past week.

 

That’s it for this week!

 

Regards,

 

George Murphy

Twitter @GeorgeMurphyOil  

Price changes for Thursday, December 24th, 2020

 

Hi to all,

 

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

 

*Heating and stove oils to increase by 2.1 cents a litre.

*Diesel fuel to increase by 2.4 cents a litre, and...

*Gasoline shows an increase of three cents a litre.

 

Market highlights

 

Covid vaccine powers up the markets

The announcement of the covid-19 vaccines powered up the markets with oil rising to peak at $52.26 US a barrel earlier this week before starting a correction as word got out of a mutation with the virus that saw a slow retreat to the peak in oil late in the session.

     Brent prices closed below the $50 US mark at $49.96 US as shut-ins were seen to affect the economy worldwide, starting with travel restrictions in Europe from the United Kingdom.

     In the meantime, while I did not expect this time around to be the anticipated reason for the market correction, data seems to indicate, at least so far, that inventory levels have not been showing to be increasing in the face of possible rising demand with the covid-19 treatments slowly making the rounds.

     Predictions of another growth in pandemic cases as a result of Christmas travel is also predicted for January also helped to mute the market.

 

Canada proposes to end fossil fuel vehicle sales

Canada is proposing to the US that both countries seek to end new fossil fueled vehicle sales as early as 2035 to combat carbon emissions.

      Vehicle emissions account for over 25 percent of all carbon emissions in this country.

      California and Quebec have already announced that they will end fossil fuel vehicle sales by 2035, joining the call from such countries as France, the United Kingdom, Ireland and Norway.

      Canada is in agreement with the US that electric vehicles needed to get out on the markets faster than they have been, and that more needs to be done to fight carbon emissions.

 

Apple getting into the EV business?

Apple has announced that it is hoping to get into the electric car business as early as 2024, this coming just weeks after their breakthrough announcement of new technology that allows for extended life in batteries for their products that they’re hoping can be adapted to electric vehicle use, helping car batteries with longer range and at a cheaper cost.

     Project Titan is an ongoing program developed by Apple in 2013 where the company set plans to develop it’s own EV entry into the markets.

     While no details have been released on the EV itself, it will be Apple’s first venture outside of the cellular market.

 

US inventories

The Energy Information Administration released inventory data again last week showing crude oil inventories down by 3.1 million barrels.

      Gasoline stocks increased by a million barrels, while distillates increased by just 200,000 barrels.

      US refiner capacity was recorded at 79.1 percent, while US domestic production dropped 100,000 barrels to sit at 11 million barrels a day.

      7.9 million barrels of refined gasoline were supplied to the markets every day last week, down 1.4 million barrels a day from the same timeframe last year.

 

That’s it for this week!

 

Safe and happy Christmas to all!

 

Regards,

 

George Murphy

Twitter @GeorgeMurphyOil  

Price changes for Thursday, December 17th, 2020

 

Hi to all,

 

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

 

*Heating, stove oil and Diesel to increase by 1.2 cents a litre.

*Gasoline shows an increase of 1.3 cents a litre.

 

Market highlights

 

Oil hits $50 US

Brent oil prices hit $50 US for the first time since March 4^th as speculators bet on economic recovery and vaccines to prevent Covid-19 hit the world.

     While things still remain shut in and demand stymied almost everywhere except in Asia, and the hopeful end to the Coronavirus now months away, speculators bet on rising anticipated demand as more vaccines met approval, or are close to hitting the markets.

      But is oil oversold?

      While shutdowns are still ongoing, demand remains weak for all fuels, with most demand still down a rough 20 to 30% from pre-Covid levels. Spot prices for heating and stove oils are two cents lower than pre-covid levels in early March, while gasoline spots are roughly 6 to 7 cents lower as demand hasn’t picked up there.

       So, while demand is weak, and inventories keep building, at what point does the market realize it has been oversold and thus, correct itself?

       It could be soon, or even determined by how fast the world can get a vaccine out to everyone.

 

Refineries close, but production drops in those still open

While we have seen several refineries close during Covid, others have remained open-at least for now-with reduced capacity.

     Latest numbers seem to indicate that fact as in the US, a drop of 1.7 million barrels of refinery capacity has been noted.

     All the same, while refineries closed, overall US refinery runs have dropped almost 2.2 million barrels a day from the same timeframe last year.

     And inventories are still building.

     The data seems to indicate a lot of weakness in demand being reflected that has a long time yet to recover.

 

OPEC oil demand to fall again

OPEC is predicting that world oil demand will drop by another 400,000 barrels a day in 2021 as predictions initially had demand averaging 96.3 million barrels a day as the world recovers from Covid-19.  

      OPEC is now predicting world oil demand to average just over 95.8 million barrels a day.

      In the meantime, OPEC produced over 700,000 barrels a day more than their self-imposed quotas, mainly as a result of growing Libyan output, for which Libya wasn’t subject to quota restrictions as the country recovers from unrest.

 

That’s it for this week!

 

Regards,

 

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, December 10, 2020

 

Hi to all,

 

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

 

*Heating, stove oil and Diesel to increase by 2/10ths of a cent a litre, and...

*Gasoline shows a drop of one cent a litre.

 

Market highlights

 

OPEC+ agrees to an increase

OPEC+ has finally agreed to an increase in production after a three day session that saw some major differences come to the fore.

     Production will be increased by 500,000 barrels a day from present levels and strict monitoring of production levels will be enforced.

     Russia will pick up an extra 125,000 barrels a day in production as part of the addition.

     The United Arab Emirates was in disagreement with the rest of OPEC. They wanted a return to normal production as agreed to back in April, but OPEC members only conceded some growth and an agreement to revisit the additions to production every month as the world economy recovers.

 

Sticky problems for refiners as oil rises

While any increase in oil prices may be good for oil producers revenues, refiners are left struggling with higher acquisition costs for oil, and a weak demand for refined products.

     The problem arose over the last couple of weeks where prices have risen as a result of speculators betting on a returning economy and demand, and the actualities of the markets where demand has not returned.

      Refined product prices are a good example, where demand remains weak, but speculation over economic recovery has prices increasing to consumers and on the markets. The product is not selling to the same degree, but the acquisition costs rise, causing further complicated refining issues.

 

Green hydrogen project announced

The United Kingdom and Scotland have announced a hydrogen pilot program to further investigate the potential for hydrogen energy as a replacement for fossil fuels.

     Known as the H100 Fife project, the $33 million US pilot project will heat 300 homes and will generate hydrogen through the use of offshore wind and convert that power to manufacture hydrogen through electrolysis.

     100 percent green...

     With every step, fossil fuels are facing worldwide challenges as alternatives take centre stage.

 

That’s it for this week!

 

Regards,

 

George Murphy

Twitter @GeorgeMurphyOil