Price changes for Thursday, September 12th, 2019

Hi to all,



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



*Heating and stove oils show an increase of 2.5 cents a litre.

*Diesel fuel shows an increase of 1.8 cents a litre, and...

*Gasoline shows an increase of 2/10ths of a cent per litre.



Market highlights



Peak oil here?

“Not likely” says I...

      While market speculators fret over the latest news on US domestic production growth and the latest rig counts, much is being said that the markets have hit peak production and demand is still rising. Others say we’ll hit peak production in the late 2020’s.

      And while there may be some evidence that US domestic production has indeed stalled for the moment, it doesn’t mean that we have hit key peak production in the face of rising demand for oil.

      The facts are simple.

      The only thing that is holding back on future increases in production are the fact that West Texas Intermediate prices are held down because no one wants to get pumping oil and not make a dollar at it. Production costs are higher than elsewhere, and Chinese tariffs on U.S exports to China simply don’t help. A low price for WTI isn’t good if you’re trying to generate interest in U.S shale reserves.

      It’s no wonder Baker Hughes has reported a decline in rigs operating south of the border in August as compared to July. There were 926 rigs operating against the July figure of 955, and well down from 1050 in August 2018.

      Brent prices have risen slightly as a result of lower production costs, particularly for Middle East crudes, all in the face of self-imposed production quotas.

      My best guess here is that this is at best a temporary slowdown as rising prices will bring domestic production up again as more get back into the markets.



EIA releases “STEO”: Short Term Energy Outlook

In a monthly update, the US Energy Information Administration has released its outlook on both West Texas and Brent crude oil for 2020.

     West Texas Intermediate prices are projected to average $56.31 US a barrel for 2019 and stay steady at $56.50 US for the rest of 2020, while Brent prices will average $63.39 US a barrel for the remainder of 2019 and then average $62 US a barrel in 2020.

     And on another note, the US EIA predicts domestic oil production to grow to 13.2 million barrels a day in 2020 from this year’s average of 12.2 million a day so far in 2019.



US EIA inventories

The Energy Information Administration released its latest inventory data last Thursday, a day later than usual as a result of the Labour Day holiday.

     Crude supplies dropped 4.8 million barrels, while gasoline also showed a drop of 2.4 million barrels.

     Distillate inventories were also down, but by 2.5 million barrels on 94.8 percent refiner capacity.

     US domestic production was set at 12.4 million barrels a day for the week ending August 30^th.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil 

Price changes for Thursday, September 5th, 2019

Hi to all,



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



*Heating and stove oils show an increase of 8/10ths of a cent a litre.

*Diesel shows an increase of 7/10ths of a cent, and...

*Gasoline shows a drop of 1.6 cents a litre.



Market highlights



U.S-China tariff dispute heats up

The U.S and China trade dispute has entered a new cycle.

This week, the U.S started adding another round of tariffs on Chinese goods with the promise of more tariffs to come December 15^th. That has added concerns amongst traders that there will be a drop in crude demand in China as the Asian country faces a downturn in economic output to their largest trading partner.

     China was quick to respond.

     China also reacted by placing a 10 percent tariff on any U.S oil imports into China, throwing U.S producers offline and affecting U.S exports of crude.

      The Chinese have other places to but crude as most Middle East producers are shopping their wares to any nation that will take their supply.

     Brent crude prices were mainly supported, while West Texas Intermediate prices fell on the news, stalling U.S domestic growth the past few days since China placed tariffs on U.S crude.



End of summer

The summer driving season has come to an official end with the start of the school year now underway.

     Speculators are now placing their bids on the distillate group of fuels while gasoline has started to slide somewhat from summer highs.

     Consumers are at a disadvantage this year as spot prices for heating oils have not dropped appreciably from last winter’s highs, still ten cents a litre lower than last winter, but 13 cents higher than August of 2017 and the lead-up to winter. 
     On average, prices have crept up by ten cents a litre over the intervening winter months, so I expect to see heating oil prices to increase into the winter buying season.

     All oil price and distillate inventory dependent, of course.



U.S EIA inventories

The latest inventory report is out from the Energy Information Administration.

Wednesday’s inventories showed a draw-down of ten million barrels of crude , while gasoline and distillate fuels showed a drop of 2.1 million barrels each.

       Crude supplies are at the average level recorded over the last five years.

       Refiner capacity was recorded at 95.2 percent, up from the week previous, and U.S domestic production grew last week adding 200,000 barrels to sit at 12.5 million barrels a day.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil  

Price changes for Thursday, August 15th, 2019

Hi to all,



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



*Heating and stove oil to drop by 2.2 cents a litre.

*Diesel fuel to drop by 2.3 cents a litre, and...

*Gasoline to drop by 4.1 cents a litre.



Market highlights



US-China tariff argument

Everyone has been waiting for some sort of break in the trade and tariff war between the US and China.

     The U.S blinked today...

     The U.S Trade Representative office announced today that it would hold back on the placement of tariffs on some ten percent of Chinese goods that includes everything from electronics like laptops and cellular devices.

     Other goods, like toys, will not see any tariffs added until December 15^th, which effectively means well after goods are shipped from China ahead of the Christmas season.

     China had been pondering cutting off sales of US shale oil to add another dimension to the tariff and trade war.

      Both the US and China have agreed to terms to begin talks again in two weeks time.



US inventories surprise

Wednesday last week saw the release of inventory data from the US Energy Information Administration that held a surprise for some expecting a draw on supplies.

     US crude inventories increased last week by 2.4 million barrels, while gasoline inventories also went into positive territory, adding 4.4 million barrels.

     Distillate inventories were also up, adding 1.5 million barrels.

     Refiner capacity was recorded at 96.4 percent, the highest of the summer season.

     Those factors helped drop oil and refined product prices lower in the past week before Wednesday’s rebound in crude prices.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil 

Price changes for Thursday, August 8th, 2019

Hi to all,



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



*Heating and stove oil show a drop of 1.4 cents a litre.

*Diesel also shows downward by 1.4 cents, and...

*Gasoline shows a drop of 2.8 cents a litre.



Market highlights



US-China trade and tariff dispute deepens

The US and China trade dispute continues to play in the markets this week as the US promises more tariffs on Chinese goods totaling $300 billion dollars and with the Chinese retaliating with cutting off markets to agricultural products from the US.

     Already, some are fearing a deepening slowdown in China for oil as attention has quickly turned from Middle East tensions to a worsening of relations to the world super economic powers.

     Oil prices have suffered as a result with Brent crude dropping close to $5 US a barrel over the last week bringing Brent prices to their lowest in seven months.



In the Middle East

While things have been rocking between China and the US, tensions in the Middle East have taken a back seat to the economic dispute with the British now increasing security around tankers in the Persian Gulf and Gulf of Oman.



US Inventories

US inventory data from the Energy Information Administration showed that crude oil stocks continue to drop as refiner capacity keeps up with demand. Crude supplies dropped 8.5 million barrels while gasoline stocks showed a drop of 1.8 million barrels.

     Distillate inventories dropped 900,000 barrels on refiner capacity of 93 percent.

     The next inventory data will be released noon Newfoundland time.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil  

Price changes for Thursday, August 1st, 2019

Hi to all,



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



*Heating and stove oils to increase by 8/10ths of a cent a litre.

*Diesel fuel to increase by 1.5 cents, and...

*Gasoline shows an increase of a penny a litre.



Market highlights

US inventories

US crude inventories took a major hit last week as crude supplies from the Gulf of Mexico were cut off with the disruption showing up in the data.

     Crude inventories dropped 10.8 million barrels while gasoline was down marginally by 200,000 barrels.

     Distillate inventories were up by 600,000 barrels on 93.1 percent refiner capacity.

     US domestic production dropped the same week with production recorded at 11.3 million barrels a day, possibly as a result of rig shutdowns throughout the Gulf of Mexico region as Hurricane Barry passed through. I fully expect those numbers to return to normal in the next inventory report Wednesday.



US-China trade and tariff talks on again

World oil prices increased slightly this past week as negotiators from both sides seek to end the impasse in trade talks between the US and China. Oil prices rose close on $2 US Brent as both sides are anxious to reach an agreement that would see China tariffs lifted.

     Still, the spectre of a slowing world economy and troubling stats out of China showing a slowdown there taking hold, held back prices from taking off as future oil demand was seen to be a factor.



US economic slowdown?

In the meantime, according to a Bloomberg story, the US is starting to show signs of a slowdown that could also start to play its part in lowering of demand and oil prices.

     Figures from the last quarter show US growth down to 2.1 percentage points from the first quarter’s 3.1 percent as the US Federal Reserve considers a rate cut to help bolster a possible stall in the US economy.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil  

Price changes for Thursday, July 25th, 2019

Hi to all,



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



*Heating and stove oil to drop by 2.2 cents a litre.

*Diesel shows a retreat of 3.1 cents a litre, and...

*Gasoline shows a drop of 4.3 cents a litre.



Market highlights



US and Iran standoff?

Makes you wonder sometimes whether the US-Iran standoff over sanctions and the nuclear production deal are really enough to spur higher oil prices. Even as tensions rise, oil prices have not reacted in their usual manner as in the past with a knee-jerk rise in prices.

     I’ve wondered about this before and can really only attribute this “phenomenon” as to rising US domestic output of oil.

     Keeping in mind that the US has increased production by 1.4 million barrels in the last year alone (12.3million from 10.9 million), one can only imagine the growth rate should something sinister happen in the Straits of Hormuz and the Gulf of Oman that may temporarily disrupt shipping access points.

     But when you consider other factors such as a worldwide economic slowdown, dropping demand as predicted by the International Energy Agency, a steady but modest 1.1 million barrel a day output from Venezuela and the ongoing trade dispute between the US and China, you can be excused for feeling sceptical.



US EIA inventories

US supplies of crude oil dropped by 3.1 million barrels of oil, but inventories of gasoline showed a positive increase of 3.6 million barrels.

     Distillate supplies also increased by 5.7 million barrels, allowing the retreat of refined product prices.

      Refiner capacity was recorded at 94.4 percent.



That’s it for this week!



Regards,



George Murphy

Twitter: @GeorgeMurphyOil

Price changes for Thursday, July 18th, 2019

Hi to all,



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



*Heating and stove oils to increase by 2.5 cents a litre.

*Diesel shows an increase of 2.4 cents a litre, and...

*Gasoline shows an increase of 1.4 cents a litre.



Market highlights



US inventories take a beating

The EIA (Energy Information Administration) released it’s latest inventory report which showed oil inventories continuing to drop, this week by 9.5 million barrels.

     Gasoline dipped another 1.5 million, while distillate inventories added 3.7 million barrels.

     Refiner capacity was recorded at 94.7 percent.

     U.S domestic production hit 12.3 million barrels a day, 1.4 million barrels over the same period last year, the numbers showing how much effect OPEC cuts are having since the same timeframe.



Hurricane Barry

Barry blew ashore, causing some consternation last week as US domestic production in the Gulf of Mexico was shut down for a few days. With no damage reported in the Gulf as of Monday, production is getting back in gear, at least until the next storm bears down on the area.

      Gas prices, as well as other refined prices, increased for a few days as the storm was thought to gain strength enough where supplies may be curtailed. But that didn’t happen as in other years where concerns about the landing point of the storm was thought to have been close to the area where major centres of refining occur along the Texas-Louisiana border.



NL Hydro looking for a rate increase?

NL Hydro is again looking at the Public Utilities Board for an increase in rates as they think that oil prices will range $106 Canadian a barrel, bringing consumers an increase of 7.6 percent to electrical bills.

     They must be the only ones thinking oil prices will increase to that level, as other agencies predict a world glut coming in 2020 (IEA). Even the US Energy Information Administration in their short-term energy outlook is predicting $67 Brent at US rates for the second half of 2019 and to remain there for 2020. WTI is expected to be $62 US a barrel for the second half, while 2020 sees a modest $63 US a barrel.

      Even some Bunker C blends like IFO 380 and IFO 180 are showing a rough $430 US a metric ton (roughly 7.5 barrels depending on oil gravity and other content) priced at $560 Canadian ($74.80 Canadian a barrel).

      The numbers certainly aren’t there, and mere speculation that numbers will be there simply doesn’t cut it.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, July 11th, 2019

Hi to all,



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



*Heating, stove and Diesel fuel all show a drop of 1.8 cents a litre.

*Gasoline shows an increase of 5/10ths of a cent a litre.



Market highlights



US inventory data

US inventories showed just a slight draw against oil supplies last week as crude showed a retreat of 1.1 million barrels.

    Gasoline supplies dropped by 1.6 million barrels.

     Refiner capacity remained well up, showing refiners are meeting the needs of the consumer market, with production ranging 94.2 percent for the week.

     Distillate supplies showed an increase of 1.4 million barrels.

     US domestic production also increased week over week, adding another 100,000 barrels for total production of 12.2 million barrels a day, mostly from shale reserves and output from Alaska.



Iran situation escalates

A British force sailing out of Gibraltar halted an Iranian tanker late last week. The tanker was halted under the guides of sanctions placed against Syria by the European Union.

     The tanker was believed to be on it’s way to Syrian refineries after taking the long way around the horn of Africa before entering the Mediterranean Ocean.



Keeping an eye to Libya

The unrest in Libya continues and the fight goes on between two factions trying to gain the throne of government.

     While the fighting goes on, no disruptions to exports have been reported so far, but with fighting going on between the Libyan National Army and the Government of National Accord. Most fighting is around Tripoli, but could disrupt exports if new centres of fighting open up.

     Oi prices could rise if the fighting spreads. Last report I have on total Libyan production shows the North African country producing an average of 1.1 million barrels a day.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, July 4th, 2019

Hi to all,



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



*Heating and stove oils show an increase of 8/10ths of a cent a litre.

*Diesel shows an increase of 1.3 cents, and...

*Gasoline shows an increase of 3.1 cents a litre.



Market highlights



US-China tariff war taking a “hiatus”

Oil prices rose a solid three dollars a US barrel over the past seven days as the US and China were said to meet at the G20 meetings in Japan. Oil rose as speculation in the markets swayed toward the thought that demand would pick up for oil if there was to be any settlement in the dispute between the US and China.

      Oil started a retreat today on word that only a truce was agreed upon to allow for more time for discussions to happen. Headwinds still are out there in efforts to get nearly $250 billion in tariffs removed from Chinese goods that have been hit.



US inventories take a hit

The inventory report from the US Energy Information Administration was released last Wednesday that also saw another impetus for oil to rise.

     Crude oil inventories took a major hit as supplies dipped by 12.8 million barrels, but still remained five percentage points over the average for this time of year.

     Gasoline supplies also dipped a million barrels as refiner capacity increased, springing signs of a slight increase in demand even though some describe demand as being “tempered”.

     US domestic production also dropped another hundred thousand barrels to show the US producing 12.1 million barrels a day, a drop of three hundred thousand in three weeks.



Costco moves west-but prices haven’t dropped-yet

While the new Costco location has opened, the hoped for continued difference in prices at the pumps in the west end of the city haven’t reacted to the new competition-yet.

     While prices saw a noticeable drop in the Immediate St. John’s northeast area the last couple of years, no real difference in prices have been seen yet with the move by Costco.

     Worth noting is that prices in St. John’s and the northeast ranged well below the regulated maximum during Costco’s time there.

      I’ll be keeping an eye to this one for any price moves in the coming weeks.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, June 27th, 2019

Hi to all,



Here’s what I have for this week’s price changes. Sorry it’s so late, but I’m just home from a late night at work!



*Heating and stove oils to increase by 2.4 cents a litre.

*Diesel to increase by 2.6 cents a litre,  and...

*Gasoline shows an increase of 3.8 cents a litre.



Market highlights



US-Iran tensions play out

What started as attacks against two tankers last week has expanded to a shootdown of a US drone allegedly in Iranian airspace that threatens to expand into a full-out conflict. Oil rose the past week as fears of a supply disruption of anything leaving through the Straits of Hormuz and the Gulf of Oman.

     Things seemed to ease a little just yesterday as President Trump seemed to downplay the threat and shootdown of a US military drone as being from someone not acting on the part of the Iranian government.



US-China trade and tariff talks

Market traders seemed upbeat the last few days after word leaked that the US sent negotiating teams ahead of Donald Trumps meeting with China’s Xi Jinping, president of the Asian country, in the hope that common ground could be found in bringing an end to the tariff dispute between the two major economic powers.

    Both leaders will hopefully meet at the G20 meeting later this week to have direct talks to alleviate the dispute.

     Any positive outcome will support and likely raise further, the price of oil as anticipated demand will pick up.



Philadelphia refinery fire

A fire at the Philadelphia Energy Solutions plant has taken 200,000 barrels of production out of a total of 335,000 barrel a day refinery in the U.S northeast.

     While initially thought to be critical, the stock of gasoline and production at the refinery will be replaced with product through the U.S Colonial Pipeline system, bringing in any shortfall of supplies to market.

     It is estimated that it may take upwards of two years to have the refinery back to full production as the fire destroyed a chunk of available overall production.

     While gasoline prices initially made strong upwards moves, prices have since stabilized.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, June 20th, 2019

Hi to all,



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



*Heating and stove oils to increase by 4/10ths of a cent a litre.

*Diesel to increase by 3/10ths of a cent, and...

*Gasoline to decrease by 3/10ths of a cent a litre.



Market highlights



US inventories up again

US inventories of crude oil were up again this past week for the fourth week in a row, continuing speculation that there could soon be another oversupply of crude building in the markets.

     In spite of cuts to production from Iran, Venezuela and other OPEC and non-OPEC production, prices have continued to fall in the face of a possible world economic slowdown.

     Crude oil showed an extra 2.2 million barrels over the week previous and Gasoline supply was also up another 800,000 barrels.

     Refiner capacity was reported at 93.2 percent, up another two points over the previous week.



Oil rises on tanker attacks

Speculation that Iran was behind two attacks against oil tankers in the Gulf of Oman last week also saw oil rise as speculators see the attacks as a threat to overall world supplies if the attacks continue.

     The two tankers in question were under Japanese and Norwegian ownership, but no connection has been made between that, and the fact that Japan’s Prime Minister Shinzo Abe is the chief negotiator trying to get Iran and the United States back to the negotiation table.



US-China talks on again?

Oil rose sharply over the last two days, partially motivated on word that “tariff talks” are on again in the hope of avoiding a trade war that could hurt Chinese demand for crude oil as well as damage the world economy.

     No date has been given for the expiration of this round of talks that will start ahead of a scheduled G20 meeting next week.

     Both countries negotiators are meeting ahead of that to try to hammer out a deal on tariffs before Trump meets with President Xi Jinping of China at the G20.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, June 6th, 2019

Hi to all,



Here’s what I have for price changes in what has proven to be a very volatile week:



*Heating and stove oils to drop by 5.7 cents a litre.

*Diesel to drop by 5.4 cents a litre.

*Gasoline to drop by 5.4 cents a litre.



Market highlights



Tariffs, tariffs, tariffs...

While the long-standing tariff dispute carries on with a quickly approaching deadline for any agreement to settle the argument, the US has also turned to the tariff mechanism as a diplomatic weapon to use against its southern neighbour, Mexico.

     In fact, what Trump has done is cause more world economic worries to add to an already unsteady situation.

     The Trump administration was out this week announcing the use of tariffs to get Mexico to deal with the US immigration issue. For years, illegal immigrants have used the US-Mexico border area as a gateway to the US, and the US wants it to stop, placing several industries there and in Canada, under threat. Oil went lower again as a result.

      Again this past week, the ongoing tariff dispute played downwards on oil prices as time has been ticking away toward the deadline for resolution of the dispute.

      The U.S is promising more tariffs, but China is responding with an economic weapon of it’s own, next to the further imposition of tariffs on US goods. They’re also promising added difficulties in getting rare earth minerals from China to the world markets, promising a technology war at the same time.



US inventories weigh



US inventories showed a build in gasoline last week with the raw liquid adding 2.2 million barrels to supplies, while oil stayed relatively steady, dropping 300K barrels. But the real news may have been with US domestic figures which showed another 100K barrel a day expansion in production with the US now hitting 12.3 million barrels a day.

     Refiner capacity was up to 91.2 percent, but gasoline still showed a build in inventory in spite of the total product supplied.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil  

Price changes for Thursday, May 30th, 2019

Hi to all,



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



*Heating and stove oil to decrease by 3.6 cents a litre.

*Diesel shows a decrease of 4 cents a litre, and...

*Gasoline shows a decrease of 3.4 cents a litre.



Market highlights



Oil markets have hit a stall...

    Caught between the possibility of a slowing world economy, a new oil glut and an extension of the U.S-China tariff dispute, fears for dropping oil prices far exceed the possibilities of any increase.

     Or, at least that’s the way I see it.

     Evidence south of the border shows another good build in U.S inventories last week, along with growth in U.S domestic output, bringing with it dropping supply fears as oil has no takers and nowhere to go.

     U.S inventories showed a build in crude oil inventories of 4.7 million barrels and remain about four percent above the same period for last year.

     Gasoline inventory also showed a good build of 3.7 million barrels with capacity measured at 89.9 percent. If people aren’t buying with capacity lower than expected, then it’s reasonable to assume that demand is not as great as expected, even in the face of lower production.

      A good measure on where prices may be going as a result, is lower. Demand has to pick up to keep prices elevated.

      But this is not unusual, so, while there may be some hope, I exude caution in the face of dropping prices. It’s not unusual, even after the start of the summer driving season to see prices moderate a little as, sometimes I’ve seen two spikes in prices-immediately ahead of the U.S Memorial Day weekend just passed, and immediately during the start of hurricane season.



Also an important factor in the markets the last couple of weeks is the bruhaha between the U.S and China as talks enter a new phase.

     As China has promised retaliation should additional tariffs be charged to Chinese goods, there comes the possibility that China will slow down any shipments of rare earth minerals needed in technology development, possibly sparking a slowdown in the tech sector.

     Analysts also predict a slowdown in the Chinese economy of tariffs are placed, citing the possibility of slumping Chinese demand for oil as a result. If demand there falters, then oil prices will slip further, along with refined commodity prices.



     That’s it for this week!

      Back in the saddle...



Regards,



George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, April 11th, 2019

Hi to all,



After last week’s wild change in prices, I have to urge caution in the actual price changes this week. I’ll have a solid set of data for next week when things come back in balance as the new dataset gets built up.



Either way, the numbers are still “up” this week regardless.



Here’s what I have:



*Heating and stove oils show an increase of 1.8 cents a litre.

*Diesel shows an increase of 2.3 cents a litre, and...

*Gasoline shows an increase of 3.3 cents a litre.



Continued low refiner capacity still figures this week as it remains below 87 percentage points. Usual for this time of the year is around 92 to 93 percent. That missing capacity is hurting gasoline stocks as we head toward the summer.



     If there’s any other news here, it’s that prices with this week’s increase will still be close to the actual last year for the same time, being one cent over last year’s $1.34.2 a litre. Regulated maximum in St. John’s right now is $1.32.2 a litre.



     Economically, OPEC cuts, including other non-OPEC nations continue to bite into any remaining over-supply issues as Iran, Venezuela and Libya all weigh on production cuts and add their own weight to prices.



     Brent and WTI crudes has increased by close on $4 US over the past week, making acquisition costs a little higher.



That’s it for this week!



Regards,



George Murphy

Twitter @GeorgeMurphyOil  

Price changes for Thursday, March 28th, 2019

Hi to all,



Here’s what I have for this week’s fuel price changes. Keep in mind that winter blending is still in effect!



*Heating and stove oil show an increase of 1/10^th of a cent.

*Diesel shows an increase of 4/10ths of a cent, and...

*Gasoline shows an increase of 2.8 cents a litre.



Market highlights

With gasoline prices set to rise again this week, I ran a comparison with last year’s numbers to see where we are. Gas prices are just below where they were for the same time last  year with the exception that the Canadian dollar was about six cents less than what it was today, and probably part reason why spot prices are almost the same.  Spot price for gasoline this year for this week’s price change I have at 64.8 cents. Last year’s spot was 65.5 cents.

      Price at the pumps last year, as compared to this week’s if the prediction holds?

$1.33.1 last year versus $1.31.1 later this week.

       Oil on March 27, 2018 was at $68.91 US a barrel for Brent



Tightening supplies versus economy

OPEC and non-OPEC members are still sticking to their guns on maintaining production cuts that amount to 1.2 million barrels a day, and other factors also continue to weigh keeping oil prices up.

     The production cuts agreement is in effect until June, but many believe that deadline will be extended.

     Iran sanctions and falling Venezuelan supplies are also helping to add supply constraints to the world market, even as news of a slowing economy worldwide mounts. Iranian production has reportedly dropped below 2.6 million barrels a day, while Venezuelan production has dipped to just a million a day.

     Word of a possible slowdown was leaving oil in the markets as “mixed” as factory data from the U.S, Asia and Europe was seen as being weak. A weaker demand growth possibility also weighed on oil, keeping any overall weekly increase to oil prices this week as limited.



U.S inventory report

The Energy Information Administration’s inventory report last Wednesday was a little startling.

     U.S crude inventories dropped by 9.6 million barrels, while gasoline also dropped 4.6 million barrels.

     Distillate inventories were also down, but by 4.1 million barrels, lending some upwards support to prices.

     Refiner capacity was recorded at 88.9 percent, still not showing a good uptick on refiners getting back to work.



That’s it for this week!



Regards, to all,



George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, March 21st, 2019

Hi to all,

Here’s what I have for this week’s price changes. Keep in mind that winter blending is still in effect:

*Heating and stove oil show a drop of 1.2 cents a litre.

*Diesel fuel shows a drop of 1.8 cents a litre, and...

*Gasoline shows an increase of 1.8 cents a litre.

Refiners still offline

While refiner capacity is still lower than normal, inventories of gasoline are under pressure as gasoline stocks are not being replaced as readily as they would be if capacity was up.

     With capacity down to 87 percent, there’s still about six percent of production not entering the markets that probably won’t return until refineries come back from seasonal maintenance.

     I’m watching inventory numbers to see when refineries come back, that should bring some moderation to gasoline as the days go on.

OPEC waits until June for further cuts on production

OPEC has announced it will delay a meeting set for April that would have included a decision to extend cuts, to June, adding more speculation that the group is relatively happy with the performance of oil in response to cuts made in December.

     OPEC believes that the cuts are successfully taking a bite out of a world glut of oil and matched with news March 14^th that Venezuelan production dropped by another 142,000 barrels in February, prices have been reasonably stable for the group.

     Venezuelan production is now a rough one million barrels a day.

Distillate prices worth watching

As the International Maritime Organisation deadline of January 1^st, 2020 comes close, it’s worth noting that there is a predicted shortfall of “clean distillates” that could play into the markets, raising prices for distillate product like diesel fuel, heating and stove oils.

New IMO 2020 regulations calling for lower sulphur content in marine diesel fuels is causing some speculators out there to think about the availability of distillates. New regulations are setting new sulphur levels from 3.5 percent down to a half percentage point by January 1^st of 2020 to combat carbon emissions. Some wonder if the diesel, heating and jet fuel markets will also be under added pressure in pricing as a result even though the new regulations affect marine diesel users, potentially the largest user group next to airlines and consumers.

Federal budget goodie

While I haven’t gone fully into the budget, one detail did stand out to me as a consumer: that the federal government will be allowing for a $5000.00 tax credit for electric or hydrogen fuel cell vehicles under the price of $45,000.00.

     Just might be helpful to those of you who may be looking for that “alternative”.

That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, March 14th, 2019

Hi to all,

Here’s what I have for this week’s price changes. Keep in mind that winter blending is still in effect and that it mat throw off the distillate numbers a little.

*Heating and stove oils show an increase of 1.1 cents a litre.

*Diesel fuel shows an increase of 8/10ths of a cent, and...

*Gasoline shows an increase of two cents a litre.

Market highlights

CBS prices drop below Costco-for a short time.

In what may seem to be an oddity to some, for the first time in years, prices in Conception Bay South-went south- to a low of $1.11.9 at the pumps, while Costco, the major St. John’s player remained at $1.12.9 a litre.

        It didn’t take long for Costco to send a message however, that hopefully will be responded to by other St. John’s and northeast Avalon retailers. Costco dropped prices below CBS after a short time to sit at $1.10.9 at the pumps.

        Other retailers are selling at present for $1.17.9 while the majority are at $1.20.9 a litre.

        Keep an eye out for falling prices near you! The regulated maximum is at $1.21.7 a litre. Could mean a savings of up to $8 based on a seventy litre fill!

Venezuelan production falls again

Venezuela continues to feel the effects of economic unrest as crude oil production continues to retreat, this time to fall below 1.1 million barrels a day by another 60,000 barrels as measured for February month.

     The economic unrest has also shut off electricity in some areas of the country, possibly aggravating the situation.

     The figures from S7P Global are the most recent info I have, but OPEC information will also be available in the coming days that will no doubt, highlight both OPEC+ cuts as well as a drop in Venezuelan production.

Iran sanctions starting to kick in

Already under sanction, Iran will most likely start to feel another pinch soon as exceptions were made in exports to other countries as long as those countries took the time to find other suppliers.

     Countries such as China, India and Japan were given upwards of six months to make arrangements from other exporters so there’s an expectation that Iranian production will only start to fall back and start to take a bite out of world supply.

      Expectations are for Iranian exports to fall back from 3.7 million barrels a day in May 2018 to 2.7 million a day by the time sanctions fully take hold May 2019.

US inventories

The Energy Information Administration’s inventory report last week showed a build in crude inventories as some refineries remained down for regular maintenance. Capacity stalled at 87.1 percent while both gasoline and distillates showed a drop, gasoline down by 4.2 million barrels and distillate down 2.4 million.

     U.S domestic production remained at 12.1 million barrels a day.

That’s it for this week!

Regards,

George Murphy

Twitter @GeorgeMurphyOil

Price changes for Thursday, March 7th, 2019

Hi to all,

Here’s what I have for this week’s price changes. Keep in mind that winter blending is still in effect, so it may throw off the numbers a tad.

*Heating, stove oil and Diesel all show no change this week.

*Gasoline shows an increase of 3.6 cents a litre at the pumps.

Market highlights

U.S inventories surprise

The U.S Energy Information Administration’s weekly report on Wednesday last week surprised the markets a little as crude oil was recorded well down from analysts predictions.

     While most predicted a drop, some around 2 million barrels, the actual numbers showed a drop of 8.6 million barrels.

      The surprise was twice over as gasoline supplies dropped 1.9 million barrels while capacity was recorded at 87.1 percent.

      Distillates dropped 300,000 barrels over the last week.

      The next EIA inventory report is due Wednesday.

U.S-China trade talks continue

The U.S and China tariff dispute may be coming to an end, at least that’s the feeling among some speculators as oil prices responded to the news on Friday.

     Refined prices also responded, with gasoline rising sharply as demand was thought to pick up along with anticipated oil demand if the talks prove successful.

     Any removal of tariffs from Chinese goods coming into the U.S will be seen as a spur on demand that would increase consumption.

Canadian dollar slides again

The Canadian dollar lost ground against the U.S Greenback again this week as oil price gains didn’t spur a rise in the Canuck buck.

     Data on Friday showed a stagnation in Canada’s economy with this country recording the slowest growth in almost three years, partly  due to a downturn in oil prices and activity.

     The Canadian dollar lost an even two cents against the U.S Greenback since last Wednesday.

That’s it for this week!

Regards,

George Murphy

Twitter GeorgeMurphyOil