Hi to all,
Here’s what I have for this week’s price changes:
*Heating and stove oils show a drop of 6/10ths of a cent per litre.
*Diesel shows a drop of 5/10ths, and...
*Gasoline shows an increase of 2.4 cents a litre.
Market highlights
Hurricane Laura drives prices
While prices are not moving by a large amount this week, at least for gasoline, the number is more significant than it has been in some time with prices up sharply over the last two days.
The reason is showing up in the Gulf of Mexico with at least 1.2 million barrels of oil production shut in in the Gulf, and hurricane warnings now posted for an area of the Texas/Louisiana border known for its refining capacity, offloading and pipeline transport of refined products to eastern and northeastern markets.
In 2005, Hurricanes Rita and Katrina brought disaster to the industry and consumers with elevated prices due to the disruptions in supplies that the storms brought, with a situation where particularly gasoline prices ran out of control in some areas of the country.
If memory serves, almost 4.8 million barrels a day of refining capacity was put offline for about two weeks, causing skyrocketing gasoline pricing.
108 oil producing facilities and platforms were destroyed by Rita and Katrina outside of refining infrastructure, whereas no destruction of facilities offshore has occurred as of yet, although 1.2 million barrels of oil production is offline.
Prices in Canada hit $2.20 a litre in Ontario and a then record $1.53 a litre in the immediate St. John’s area before moderating somewhat two weeks later, but only after some oil infrastructure came back online.
Some differences between then and now worth noting however, as Rita and Katrina were both category 5 storms and Laura is category 3 as it hits the coast on the Texas/Louisiana border sometime Wednesday.
**Numbers heading into next week are already showing 3 + cents up a litre at release time, that could affect next week’s pricing. However, positive news on oil infrastructure damage after the storm passes may negate this and show dropping prices.
Libya peace agreement?
Factions in Libya have reached a peace agreement that could add up to 1.5 million barrels a day to the world oil markets if it holds.
Also an OPEC country, the agreement may force OPEC to take a second look at overall production at its next meeting as Libya was not included in the initial agreement on cuts made several months ago.
Libyan exports mainly are exported to European destinations, but some does come into North American markets from time to time.
That’s it for this week!
Regards,
George Murphy
Twitter @GeorgeMurphyOil
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