Price changes for Thursday, August 6th, 2020

Hi to all,

 

Here’s what I have for price changes for this Thursday, August 6^th, 2020...

 

*Heating, stove oil and Diesel all show a drop of 1.1 cents a litre, and...

*Gasoline shows a drop of 3 cents a litre.

 

Market highlights

 

Covid continues to choke demand

Just when they thought it was safe to go back to their drill bits...

    News of any potential increase in oil prices continues to be tempered by continuing outbreaks of Covid-19 worldwide, especially in the United States as Covid-19 seems to be a huge factor in any economic recovery.

    Word of several outbreaks in Australia, Germany, Spain and the US continues to keep a hold of any meteoric rise in oil prices and demand for most distillates as well as gasoline, has been flattened.

     And with the end of summer coming quick, further drops in demand for transportation fuels, including gasoline, is highly likely.

 

Early winter outlook

With the summer drawing to a close for some, bets on gasoline by speculators usually switches to distillates, like heating oil as the fall and winter seasons contracts approach.

     The colder the weather, the more demand for distillates.

    A look at the data shows heating and stove oil spot prices a rather tidy 13 cents a litre lower than the same timeframe for last year, and if oil prices remaining relatively flat over the next few months, then consumers can expect to pay up to 79 cents a litre, down from the 92.9 they paid at peak winter pricing last year in the immediate St. John’s area.

     However, with Covid-19 holding the possibility of further shutdowns in the future that may keep everyone close to home, demand may increase to close that gap between this year and last year’s pricing.

     I’ll continue to keep an eye to it all!

 

US inventory data

The Energy Information Administration’s latest inventory data is out, and it shows a drop of 10.6 million barrels, leaving inventories of crude a full 17 percent above last years levels.

     Gasoline showed an increase of 700,000 barrels, while distillates were also reported up slightly, but by 500,000 barrels.

     Refiner capacity was recorded at 79.5 percent.

     US domestic production remained steady at 11.1 million barrels a day.

     The Baker-Hughes rig count remained at 251 operating rigs, but down from the 946 that were operating at the same time last year, a drop of close to 75 percent.

 

That’s it for this week!

 

Regards,

 

George Murphy

Twitter @GeorgeMurphyOil  

Oil holding steady

Distillate prices up on cold European weather

Media release

Conception Bay South, NL, February 7, 2012- Consumers won’t see much change to gasoline prices this week, but the same can’t be said for distillate fuels as refined distillate prices continue to climb. That news comes from George Murphy, group researcher for the Consumer Group for Fair Gas Prices.

What’s driving up distillate prices?

“Cold European weather is probably what is driving up refined distillate prices this time around. Record cold and the fact that European countries are the heaviest consumer of distillate-type fuels are combining to move heating, stove oil and diesel fuel prices this time around, and if the cold weather persists there, it may not be the end of it.” Murphy said.

The numbers

“Numbers show that heating and stove oils will increase by 1.05 cents a litre, while diesel fuel will increase by a penny. Gasoline prices are relatively steady, in fact showing two tenths of a cent down for this week. Keeping in mind my margin for error of three tenths, there may be no change to gasoline prices this time around.

Numbers for next week are starting to form already with distillates showing up so far by another two cents or so, with gasoline again showing hardly any moves, albeit upwards in the tenths of cents. Those preliminary numbers will change if the cold snap breaks. Keep in mind as well that this is very early and full data has to be collected before I can make a final guess early next week.”

Saudi Arabia to keep prices below $100 a barrel

Bin Talal, the CEO of Saudi Arabia’s Kingdom Holding company says that his country cannot allow market jitters over the Iran situation drive up oil prices above the $100 US a barrel mark. Market fears are such that traders believe that if Iran were to block the Strait of Hormuz over its nuclear program, then any exports from Red Sea ports will be disrupted, thus driving up oil prices.

However, the same belief cannot be said of Brent crude prices, which are a more widespread use worldwide, which are set to break $120 US a barrel. Some are saying that the Saudi’s are playing the $100 a barrel card to calm market fears over a possible sharp rise in crude oil this summer where prices are projected to trade for $180 US.

“I don’t think that $180 US a barrel is possible however. If that happens, we’ll all be witness to a collapse in consumer spending and a collapse in any economic recovery the likes we’ve never witnessed before, you can count on that!”

-30-

For more information, contact;

George Murphy

Group researcher/Member

Consumer Group for Fair Gas Prices

Twitter: @GeorgeMurphyNDP

Oil takes a pounding

Look for more updates on this one again as oil prices take a pounding in the markets today.

Oil trading lower as a result of bad economic news out of the US with a lower than expected drop in US inventories, lower economic growth forecast and a higher than expected unemployment report all playing heavily in the markets.

WTI trading down, as of 12:00Noon Newfoundland time, by $4.64 US a barrel and Brent trading down by more than six bucks US to $107.46 and below what the Newfoundland and Labrador government's budget forecast of $108 US.

Gasoline is trading down by 14 cents US a gallon and heating oils also are trading down by 16 cents a US gallon as well.

Might be another good week on the consumer end, especially if the "Canuck Buck" stays up!

I'll be in touch on this one as well as it unfolds, so you might want to hold off buying any fuels for a bit.

Regards,

George

Numbers down

Happy Father's Day!

I promised everyone that I would post a few times before the next price setting to keep everyone up to date on this latest drop in oil prices.

So far, there hasn't been a large of a change as what one would expect. Given that I think that refined prices should have taken a pounding along with oil prices, I would have expected to see something in the order of a seven cent a litre drop in refined commodity prices, based on "Big Oil's theory of one cent per every dollar a barrel in oil prices.

It doesn't show itself in the numbers.

Here's what I do have:

• Heating and stove oils are down by 2.89 cents a litre.
• Diesel is down by 2.7 cents a litre, and ...
• Gasoline shows downwards by an even two cents.

Disappointing...

I don't know why refined commodity prices didn't react in the same manner, but they did stay relatively stable all during this little "crisis" with oil so far. What it appears to be is that refined commodity prices are probably just showing an adjustment from the drop in acquired costs, and not reflective of the reality that there's some economic problems out there.

I think oil is waiting for more substantive news on a downturn in the North American economy more-so than what the markets are telling us about the European Union. That's almost off the mark from just a year and a half ago when oil retreated everywhere when even the North American economy showed signs of tanking along with the European Union's ongoing debt concerns with member countries.

In other words, we might have to wait a little bit longer to see something more substantive when it comes to that break in fuel prices we've all been waiting for.

Stay tuned. That news could be just around the corner...

Regards,

George

Oil remains elevated

An increase coming for gasoline prices

Media release

Conception Bay South, NL, March 29, 2011- It's not often that George Murphy's numbers are wrong, but he's hoping that they are this time. Numbers are showing that consumers could see an additional 2.6 cents a litre up on gasoline prices for this week when the PUB adjusts prices this coming Thursday.

"Oil prices remained elevated this week after last week's modest retreat, gaining almost three bucks a barrel US, hitting a new record high since September of '08. We're right back to where we left off with gasoline prices edging upwards and heating oils remaining unaffordable to most. Something has to give. Consumers are going to have to start to let their wallets do the talking." Murphy said.

"Numbers show just a 9/100ths of a cent drop to heating and stove oils, a 4/10ths of a cent drop to diesel prices and a 2.6 cent a litre increase on the way for gasoline. The troubling thing about all this is that, after last weeks data, there was still a demand for gasoline and that helped support the high price. In spite of the rising price, inventories of gasoline continue to drop.

"Heating and stove oils are still showing signs that prices will not be coming down anytime soon. With oil prices up again because of demand and the world geo-political situation, I expect that they will remain high for some time to come. The provincial treasury will continue to reap the benefits of that while consumers will have to collectively start to impact inventories and demand itself. Right now, unless we see economic collapse or more banking problems out of the European Union, we're probably not going to see any relief in the interim".

-30-

For more information, contact;

George Murphy

Group researcher/Member

Consumer Group for Fair Gas Prices

Not much change, but the numbers are down

Media release

Conception Bay South, NL, June 29, 2010- The numbers are pointing down. Not by a great deal, but enough that there won’t be a price increase this week, in spite of the market activity last week. That’s from George Murphy, group researcher for the Consumer Group for Fair Gas Prices.

‘I watched the markets closely last week and noticed the glee that must have been on investors eyes when word came of tropical storm Alex’s formation and track into the Gulf of Mexico region, and that put upwards pressure on oil and it’s related and refined commodities,” said Murphy. “But then I saw the downside the past two days when the markets started telling the true story of a stall in any world economy out there. It’s like I’ve been saying all along, that this market recovery is artificial and is boundless. That message has played in on oil prices again.

“Heating and stove oils show a decrease of 42/100ths of a cent, diesel down by a half cent and gasoline shows a drop of just three tenths of a cent. It may not be a big lot, but it may also be indicative of what’s to come next week.

“As of today, it seems that oil and its related commodities have begun another precipitous slide in price. I don’t know how long the message has to be out there before investors and governments finally get it that the world needs cheaper oil to aid any economic recovery efforts and prevent any hindrance to consumer spending. The world economy will not recover fully based on oil anywhere over OPEC’s old 2005 targets, or at prices for refined commodities that consumers and business can no longer afford. That’s the story that is being told in the world markets right now; that Big Oil has killed any prospect of immediate economic recovery happening. The real story of ‘invest in oil’ seems to have reverted to ‘divest from oil.’”

-30-

For more information, contact;

George Murphy
Group researcher/Member
Consumer Group for Fair Gas Prices

By the way. The budget was based on $83 US a barrel WTI.
I don't know where they got the forecast, but they didn't ask me.
Numbers so far:
March/10:$81.14 US
April/10: $84.82 US
May/10: $74.18 US
June/10: $75.33 US
Can you say "deficit"?