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
