Price changes for Thursday, July 16, 2015

Hi to all,

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

Considering all the moves in the international political arena, it may not be a lot of action in the refined commodity department, however!

Heating and stove oils show a drop of 1.8 cents a litre on the way.
Diesel fuel shows down by 2.1 cents a litre, and...
Gasoline shows an added 9/10ths of a cent.

Market news

Greece and the Euro
Greece continues to play in the markets, but as much as what people would have figured. With such a low gross domestic product and already an unemployment level that's pretty high, some are saying that Greece has played it's card on oil already. Greece amounts to a much lower GDP than China, which has it's own issues with the stock markets. There, the Chinese government has ordered government run agencies to begin buying stocks of private companies in order to maintain their value and help keep some semblance of order in trading. Some analysts are saying that we can expect to see another thirty percent devaluation of stocks there before stability reached their own markets.

Iran deal
While a deal over Iran's nuclear program has been signed, don't expect to see Iran's oil output to hit an added 1.8 million barrels right away. Analysts say that due to aging infrastructure, Iran can only produce an added 500,000 barrels a day more upon lifting of sanctions, and those sanctions have to be tested before they're lifted. Analysts also say that Iran will be able to add another 500,000 after six months has passed. But the kicker here is that Iran has over 30 million barrels of crude already in floating storage ready to hit the waves as soon as word is given. That's compounded by a total "floating" figure of 174.8 million barrels already waiting to go.

Iraq, Saudi Arabia continue to break production records. Libya back?
Word from Iraq shows that country increasing production again in July to amount to 3.86 million barrels, while it's neighbour, Saudi Arabia hitting production daily at 10.6 million barrels in what I believe is a move by those OPEC countries to stymy the revival of US domestic production. That's another reason why oil showed some retreat over the past week. To add to world glut woes, two of the fighting factions in Libya have reached an agreement to allow oil exports there to resume. Amongst the bloodshed, Libya has been exporting a rough 800,000 barrels a day through two coastal ports previously shut in.

Canadian dollar
The Canadian dollar against the US greenback lost another penny in a week that saw oil prices on the retreat again, albeit to the benefit of the US dollar. Whenever I see a retreat in oil, it's usually a time for speculators to invest in the US dollar, and that lowers our own, considering we have a dollar closely tied to performance of natural resources like oil.

That's it for this week!

Regards,

George Murphy
Twitter @GeorgeMurphyMHA