The latest report from the US Energy Information Administration released today gives a good indication where prices could be headed for consumers this summer.
According to the report, crude stocks have climbed again to reach a rough 504 million barrels on inventory on-hand, a record since record keeping began in 1981. Another 2.1 million barrels of crude oil was added to last week's numbers.
Gasoline inventories were also reported up this week by another 3 million barrels, and along with an increase in refiner capacity, figures show that in spite of the low price, consumers still seem to be holding back.
(See the summary here: http://ir.eia.gov/wpsr/wpsrsummary.pdf )
Why?
Well, maybe it's a sign that consumers are simply not paying as much attention to the pump price now that they're at a level that is more affordable. They simply don't have to go on a buying spree when they see prices reflected at a level that is affordable.
And maybe they are more aware and simply are practising conservation, which is great!
Perhaps the oil industry should take note the next time (if ever) that prices start to increase with rising oil.
What the report tells me simply is this: While gasoline and crude oil stocks are continuing to build, it is the middle of February. Traditionally, you would see gasoline speculators pouring into the markets well ahead of the summer driving season to try and take advantage of the opportunity to invest in anticipation of an increase in demand.
That hasn't started to happen. I'm wondering if it ever is going to...
Here's my read then for the summer, if this "trend" keeps up.
Simply put, "what you see is what you get"...At least so far...
With no sign of an increase in demand yet, consumers looking to plan their summer might be able to do something they haven't done in a few years: Go further!
Regards,
George
Thursday, February 18, 2016
Tuesday, February 16, 2016
Price changes for Thursday, February 18, 2016
Hi to all,
Here's what I have for this week's price changes, keeping in mind "winter blending" which may throw off the numbers for heating oil and diesel fuel just a little.
*Heating oil shows a drop of just 8/10ths of a cent a litre....
Stove oil shows the same 8/10ths of a cent drop.
*Diesel fuel shows a drop of 4/10ths of a cent a litre, and...
*Gasoline shows a slight increase of just 3/10ths of a cent a litre.
Here's what I have for this week's price changes, keeping in mind "winter blending" which may throw off the numbers for heating oil and diesel fuel just a little.
*Heating oil shows a drop of just 8/10ths of a cent a litre....
Stove oil shows the same 8/10ths of a cent drop.
*Diesel fuel shows a drop of 4/10ths of a cent a litre, and...
*Gasoline shows a slight increase of just 3/10ths of a cent a litre.
Keep in mind that my margin for error is three tenths of a cent a litre outside of winter blending!
Highlights.
*The Canadian dollar remained relatively steady against the US greenback, averaging a rough $1.385 against the US buck over the last seven days.
*Markets are mostly in a waiting mode as they wait to see if any concerted action will be taken to institute production cuts between Russia, Venezuela and Saudi Arabia. Saudi Arabia and Russia are mostly responsible for added oil supplies worldwide.
As a footnote to all this: The Saudi's, Russia, Venezuela and Qatar, all signatories to a deal that will stabilise production at January levels, say that Iraq and Iran must also curtail production if the agreement is to hold.
Remarkable when you think about it, but world oil producers' concerns over added world crude stocks that is keeping crude oil prices at an extreme low are now talked about between major producers in the world's biggest case of "collusion" in an effort to help bolster prices again.
So much for the free market!
*Watch Brent prices in the coming few weeks.
News out of Iran sees that country sending it's first load of oil in four years to the European markets this week as Total SA out of France is seen to be buying off the now sanction-free country.
Iran, by the way, is not party to ongoing talks between Russia, Venezuela and Saudi Arabia over production cuts.
*A new brokered peace in Libya may also add more crude to the markets. With a peace deal in place with a new provisional government, it is possible that European markets will see added shipments from the North Africa country in the coming weeks as they seek to re-enter the market after an uneasy civil war.
That's it for this posting!
Regards,
George
Twitter @GeorgeMurphyOil
Highlights.
*The Canadian dollar remained relatively steady against the US greenback, averaging a rough $1.385 against the US buck over the last seven days.
*Markets are mostly in a waiting mode as they wait to see if any concerted action will be taken to institute production cuts between Russia, Venezuela and Saudi Arabia. Saudi Arabia and Russia are mostly responsible for added oil supplies worldwide.
As a footnote to all this: The Saudi's, Russia, Venezuela and Qatar, all signatories to a deal that will stabilise production at January levels, say that Iraq and Iran must also curtail production if the agreement is to hold.
Fat chance of that!
So much for the free market!
*Watch Brent prices in the coming few weeks.
News out of Iran sees that country sending it's first load of oil in four years to the European markets this week as Total SA out of France is seen to be buying off the now sanction-free country.
Iran, by the way, is not party to ongoing talks between Russia, Venezuela and Saudi Arabia over production cuts.
*A new brokered peace in Libya may also add more crude to the markets. With a peace deal in place with a new provisional government, it is possible that European markets will see added shipments from the North Africa country in the coming weeks as they seek to re-enter the market after an uneasy civil war.
That's it for this posting!
Regards,
George
Twitter @GeorgeMurphyOil
Tuesday, February 09, 2016
Price changes for Thursday, February 11, 2016
Good evening everyone,
Here's what I have for this week's price changes, keeping in mind winter blending that may throw off the heating oil and diesel numbers a little.
*Heating oil shows a drop of 1.3 cents a litre....
*Stove oils show down by 1.3 also.
*Diesel shows a half penny drop, and...
*Gasoline shows a huge drop of 4.7 cents a litre.
Here's what I have for this week's price changes, keeping in mind winter blending that may throw off the heating oil and diesel numbers a little.
*Heating oil shows a drop of 1.3 cents a litre....
*Stove oils show down by 1.3 also.
*Diesel shows a half penny drop, and...
*Gasoline shows a huge drop of 4.7 cents a litre.
Highlights
*As predicted a few weeks ago, it certainly appears that a price war of sorts will start up against oil prices with most OPEC nations raising production in January month by an added 280 thousand barrels a month. Current production was a total of 32.6 million barrels a day. That hit Brent prices particularly hard today as most of this production would most likely be sent to the European markets. Keep reading...
*Still no real sign of a drop in US domestic production after a slight drop over the last six months. US domestic production in January remains at a stalwart 9.2 million barrels a day. Pretty important signal to Saudi Arabia that they're going to have to drive prices lower, if they hope to knock out US domestic production as an important player in world oil prices. That, and compete directly with US customers for crude oil.
*The International Energy Agency is warning that low prices may continue for some time yet as all countries currently are producing 1.75 million barrels a day more than what the world actually needs. That's up another 250,000 barrels a day from their previous needs of world demand.
*Add to the mix, Kuwait as another country and OPEC member setting themselves up to produce more crude oil in the final quarter of 2016. They're set to increase production from 2.5 million barrels a day to 3.15 million by the end of the year.
Talk about exacerbating the problem!
*Finally, I'm surprised to hear that Nalcor will be looking for an increase to allowable expenses for added burning of oil in Holyrood! All things considered, prices for #6 oil that they use is now well below what they adjusted for months ago when we received a drop in electricity rates. Hopefully, the consumer advocate will defend this "ask" on the part of Nalcor and champion a drop in electrical rates as a result of the drop in price of the oil they use!
That's it for this week!
Regards,
George Murphy
Twitter @GeorgeMurphyOil
*As predicted a few weeks ago, it certainly appears that a price war of sorts will start up against oil prices with most OPEC nations raising production in January month by an added 280 thousand barrels a month. Current production was a total of 32.6 million barrels a day. That hit Brent prices particularly hard today as most of this production would most likely be sent to the European markets. Keep reading...
*Still no real sign of a drop in US domestic production after a slight drop over the last six months. US domestic production in January remains at a stalwart 9.2 million barrels a day. Pretty important signal to Saudi Arabia that they're going to have to drive prices lower, if they hope to knock out US domestic production as an important player in world oil prices. That, and compete directly with US customers for crude oil.
*The International Energy Agency is warning that low prices may continue for some time yet as all countries currently are producing 1.75 million barrels a day more than what the world actually needs. That's up another 250,000 barrels a day from their previous needs of world demand.
*Add to the mix, Kuwait as another country and OPEC member setting themselves up to produce more crude oil in the final quarter of 2016. They're set to increase production from 2.5 million barrels a day to 3.15 million by the end of the year.
Talk about exacerbating the problem!
*Finally, I'm surprised to hear that Nalcor will be looking for an increase to allowable expenses for added burning of oil in Holyrood! All things considered, prices for #6 oil that they use is now well below what they adjusted for months ago when we received a drop in electricity rates. Hopefully, the consumer advocate will defend this "ask" on the part of Nalcor and champion a drop in electrical rates as a result of the drop in price of the oil they use!
That's it for this week!
Regards,
George Murphy
Twitter @GeorgeMurphyOil
Wednesday, February 03, 2016
Of market plays, reality and other oily bits...
Surprise!
You must be wondering exactly what goes through an oil speculator's head whenever we see what we've witnessed today in the oil markets. In spite of the breaking news the last couple of hours today, speculators still can't grasp the simple facts that lay before them that keeps them hedging their bets into a radically changed market.
It's simply not the same place since OPEC first played their lot in 1997. That was the year they wrenched production downwards in their effort to increase the price on a barrel. Succeed they did, but only to have others to explore with different tools into long-known shale resources that they thought would never be tapped.
How wrong they were when the advent of slickwater did them in starting in 2008! The markets simply haven't been the same since.
But today's market news simply tells the state of the speculator, playing with God only knows who's money, but playing with it nonetheless.
If you're Stateside, you're 401K is taking a beating.
So, here traders were, from last Friday, dealing with "news" that Russia and Saudi Arabia were into some sort of talks on a concerted market action to raise prices, because you know, every time your country goes to war, you have to have a way of paying for it. So, you don't say "no" to the course of action.
Oil rises as a result of said "talks on a production cut". Both countries neither confirm, nor deny...
Iran enters and puts the kibosh on those talks late Friday and the electronic sell-off into Monday and Tuesday squares away the reality again. All is in balance...
Then today...
In spite of the latest US Energy Information Administration's report, and the promise held within of the market reality of declining storage, excess supply and slack demand for refined products and a world awash in crude oil, prices increase markedly...
Why?...
That "nasty" rumour of OPEC master Saudi Arabia and Russia talking again.
No confirmation.
No denial.
Oil rises...
But it's your investments! You expect a "return" because that's for retirement and returns are supposed to happen, right?...
Deal with reality. EIA results showing 503 million barrels in storage, a record high not seen in eighty years!
Gasoline inventories up another 5.9 million barrels, well ahead of the summer driving season when the speculators start to turn their attention to a peak in gasoline demand, all in spite of refinery capacity down to a low of 86.6 per cent!
Consumers simply aren't burning the stuff, and depending what side of the ecological fence you're on, that's either a good or bad thing. Yes, Mr. Speculator, you're really starting to run out of places to put the oily bits down on. Seems with oil, it's both out of luck and out of time.
Take some worthy advice.
"Put your bucks into alternative energies and let it ride..."
You must be wondering exactly what goes through an oil speculator's head whenever we see what we've witnessed today in the oil markets. In spite of the breaking news the last couple of hours today, speculators still can't grasp the simple facts that lay before them that keeps them hedging their bets into a radically changed market.
It's simply not the same place since OPEC first played their lot in 1997. That was the year they wrenched production downwards in their effort to increase the price on a barrel. Succeed they did, but only to have others to explore with different tools into long-known shale resources that they thought would never be tapped.
How wrong they were when the advent of slickwater did them in starting in 2008! The markets simply haven't been the same since.
But today's market news simply tells the state of the speculator, playing with God only knows who's money, but playing with it nonetheless.
If you're Stateside, you're 401K is taking a beating.
So, here traders were, from last Friday, dealing with "news" that Russia and Saudi Arabia were into some sort of talks on a concerted market action to raise prices, because you know, every time your country goes to war, you have to have a way of paying for it. So, you don't say "no" to the course of action.
Oil rises as a result of said "talks on a production cut". Both countries neither confirm, nor deny...
Iran enters and puts the kibosh on those talks late Friday and the electronic sell-off into Monday and Tuesday squares away the reality again. All is in balance...
Then today...
In spite of the latest US Energy Information Administration's report, and the promise held within of the market reality of declining storage, excess supply and slack demand for refined products and a world awash in crude oil, prices increase markedly...
Why?...
That "nasty" rumour of OPEC master Saudi Arabia and Russia talking again.
No confirmation.
No denial.
Oil rises...
But it's your investments! You expect a "return" because that's for retirement and returns are supposed to happen, right?...
Deal with reality. EIA results showing 503 million barrels in storage, a record high not seen in eighty years!
Gasoline inventories up another 5.9 million barrels, well ahead of the summer driving season when the speculators start to turn their attention to a peak in gasoline demand, all in spite of refinery capacity down to a low of 86.6 per cent!
Consumers simply aren't burning the stuff, and depending what side of the ecological fence you're on, that's either a good or bad thing. Yes, Mr. Speculator, you're really starting to run out of places to put the oily bits down on. Seems with oil, it's both out of luck and out of time.
Take some worthy advice.
"Put your bucks into alternative energies and let it ride..."
*******************
George
Twitter @GeorgeMurphyOIl
Tuesday, February 02, 2016
Price changes for Thursday, February 4, 2016
Good evening!
*Stove oil shows the same 3.6
cents a litre.
*Diesel shows an added 3.4
cents a litre, and...
*Gasoline shows an added
6/10ths of a cent a litre.
Market highlights
Canadian dollar steady
*While oil gained some strength
over the session, rising to touch close to $36 US for Brent, the Canadian
dollar rose right along with it. Averaging close to $145 last week, the dollar
gained almost five cents against the US dollar, but did not retreat with the
last couple of days trading, staying at a steady $1.40 against the greenback.
US inventories
*While US inventories of
crude oil, gasoline both increased last week, prices for distillates like
heating, stove oils and Diesel fuel all decreased with colder weather in the US
northeast and Mid-west. Inventories were nailed with a loss of 4.1 million
barrels, showing good demand for the products, and that’s where speculators
poured it on. Crude oil added an additional 8.4 million barrels while gasoline
was up another 3.5 million.
Refiner capacity dropped to 87.4% from the 90.6% recorded the week previously
due to unscheduled refinery outages.
Marine Atlantic surcharges
*Any increase to surcharges
to Marine Atlantic customers should be totally unacceptable for anyone in this
province. While not directly fuel related, any future increases to fuel
surcharges are coming, according to the federal corporation. Representation
from this province should be made to prevent any increases that supported the
former government’s policy of making the crown corporation a “self-sustaining”
entity. The policy of any government should be to connect a country, not bar
anyone from entry or exiting from that province. “Any increase in rates adds to
an artificial inflationary cost that is passed to consumers” and should be
absorbed by the federal government.
Secondly: The boats we have now were first purchased as a replacement to the
old “Caribou” and “Joseph and Clara Smallwood” boats, not only because of
twenty year replacement, but because of their fuel efficiency. While there
hasn’t been any marginal decrease in marine diesel prices, it is wrong to
assume that consumers and users of the ferry system will have to pay higher
costs due to higher prices for the fuel in the future. Already, there is a glut
in shipping worldwide, so much so that fuels, like marine diesel fuels, are
expected to retreat in the face of less consumables being transported.
Lastly: If there’s any improvement in the Canadian dollar, then consumers
should be, not only expecting, but demanding a break to fuel surcharges because
of the same lower cost of fuel acquisition. The price of fuel, right now,
between 2014 and 2016, when we were close to par and today’s dollar, both show
that we essentially are paying the same price for fuel.
Either way, absorb the cost. It’s the price of doing the country’s
business!
Watching: US inventories,
gasoline inventories, Iran production, Saudi-Russia arrangements, OPEC
production figures.
That’s it for this week!
Regards,
George Murphy
Twitter @GeorgeMurphyOIl
Wednesday, January 27, 2016
Enter the Dragon
The latest US Energy Information Administration's inventory data is very telling on where the market stands and how traders are having trouble trying to justify any increase in oil prices for the foreseeable future.
Consider the last three weeks of inventory data released by the EIA. For the past three weeks, data tells us that, in spite of recent drops in refiner capacity and utilization, crude inventories have been showing pretty robust builds in what some even say are in the face of dropping US domestic production.
Well, the oil is coming from somewhere, isn't it?...
US domestic production still hasn't shown a solid drop in production and output since the last figures we saw in December. Current production rests somewhere in the 9.2 million barrel per day range. No doubt, some small-time producers are having some troubles, but it's my belief that these same small-time producers have no choice but to pump to pay off their investors. They simply can't shut down...
It's best for them to risk bankruptcy than to shut down and risk losing any hope of gaining back investors if oil prices rebound. Keep pumping and hoping...
Elsewhere, Saudi Arabia chatter is that they're in talks with Russia over the possibility of production cuts that may only be a pipe dream. The truth is for the Saudi's is that they simply can't cut back production without losing market-share to neighbouring Iran, who some time ago, promised to get back their market-share lost to the Saudi's when sanctions were first placed on them years ago. Their "re-entry" into the oil markets has the Saudi's on notice that there will be a price war.
Secondly, with the prospect of Iran pumping more, why would the Russians risk losing their own market-share to the Iranians?
Reality bites...
Three weeks in a row now, the EIA has reported more than 20.8 million extra barrels of crude oil into the US markets. Space to store it is beginning to disappear at a prodigious rate and consumers simply aren't burning gasoline like they used to. With inventory builds ranging 16.5 million barrels ahead of the build-up to the summer driving season, why would I risk putting money into a so-called "bottom" to oil prices?
Finally, enter the dragon called China. With weakening manufacturing data, low demand growth and an overall faltering economy, where again is the impetus for oil? Prices are low worldwide, but no one is buying.
God help the markets if China decides to stop their investment and top-up of their strategic reserve! You can look for an immediate availability of 500,000 barrels a day if they stop their program of building it. The ramifications of that could be felt soon enough! But is this the response we're waiting for from China? Are they the factor we're all waiting for to see what a fair world price of oil should be...or could be?
Is our own economy waiting for China alone?
So, what do we look for? Any hope of rising oil?
The market hope rests in one fact, a point that Saudi Arabia may have been forcing on us in the first place: Why pump in the west if you don't have to? Strategic drilling and the forced shut-down of projects and exploration may be the only hope, as fleeting as they may be, that world production itself gets a hit merely on affordability of projects already started but not as yet producing.
The new dragon in the markets may simply be found in the wheat and corn husk fields ranging between the Dakota's and the Texas Oklahoma panhandles. Simple ability to respond to any crisis, or downfall in world production could be as easy as turning the spigot Stateside.
Even then, that response can be short-lived!
Regards,
George
Twitter: @GeorgeMurphyOil
Tuesday, January 26, 2016
Price changes for Thursday, January 28, 2016
Hi to all,
First off, thanks for your patience as I have not posted here in some time due to computer issues. I needed a solid upgrade, let's put it at that!
Either way, now that I am free and unencumbered, I intend to post here a little more often than previous as changes to the oil markets occur. You can count on hearing from me a little more as we go through this downturn and changes to the oil markets!
If I bore you, then unsubscribe!...lol
Here’s what I have for this Thursday’s price changes. Keep
in mind that due to the winter blend of fuels, heating and Diesel numbers may
be off slightly.
*Heating and stove oils show an added 18/100ths of a cent
up.
*Diesel fuel shows an added 7/10ths of a cent upwards,
and...
*Gasoline shows an increase of 5/10ths upwards.
Market highlights
*The Canadian dollar is starting to gain some ground against
its US counterpart, reaching $1.4062 against $1.4589 at the start of this
pricing session. In spite of the rise in fuel prices on the New York mercantile
exchange this week, those increases have been mitigated by the rise in the
Canadian dollar. Heating oil increased a rough nine cents a US gallon this last
week on the exchange, while diesel gained a dime a gallon and gasoline
increased six cents on average this past week on rising oil.
*All eyes are now on Iran for the first data that may show
exactly how much oil the OPEC member will be pumping into the markets now that
sanctions have been formally lifted. Iran will immediately respond by adding
500,000 barrels to output, gradually increasing to an added million on top of
present output by the end of this year. Look for a “play” as Iran counters lost
market share to competitor Saudi Arabia.
That’s it for this week!
Regards,
George Murphy
Twitter @GeorgeMurphyOil
Wednesday, December 09, 2015
Price changes for Thursday, December 10, 2015
Hi to all,
Here's what I have for price changes for this week, keeping in mind the winter blending formula that may throw off accuracy for heating and Diesel fuel pricing.
*Heating oil shows a drop of 1.8 cents a litre.
*Stove oil shows a drop of 1.8 cents a litre as well.
*Diesel shows a drop of 2.5 cents a litre, and...
*Gasoline shows a drop of 4.8 cents a litre.
Market highlights
*OPEC still won't Institute any kind of a production cut, in spite of the protests of a few members who would like to see. Some support to oil prices. Revenues have certainly taken a beating! But at the latest meeting in Vienna this past Friday, it was decided by members to Sally forth and keep production levels up. With the promise of added production, Oil prices dropped with refined commodity prices following.
*Is OPEC now chasing down the non-OPEC producers? Countries like Russia, Mexico, Norway, and yes, Canada, continue to produce crude oil from fields that have been pumping for years now. None of the companies, or the countries in question, want to lose revenues, nor can they be seen to fall to the whims of OPEC when they want to see other countries reign in production. OPEC would like to see non-OPEC nations join in with production cuts.
Can't happen...
With OPEC getting that "no" answer, first from Russia, OPEC will now start to make the run after these countries. If you can't get them to "participate" in cuts, I believe OPEC is starting to go after their bottom line to force them into an untenable operating position. That being the case, and with Iran about to enter the markets, Oil prices could drop further. And with new Iranian crude to the markets chiefly for the European markets, Brent prices could be tagged first.
*The Canadian dollar continues to show weakness against the US greenback with the Canuck buck losing another two cents against the neighbouring currency.
I'll leave it at that for now. If you want, drop me a line!
Regards,
George
Twitter @GeorgeMurphyOil
Here's what I have for price changes for this week, keeping in mind the winter blending formula that may throw off accuracy for heating and Diesel fuel pricing.
*Heating oil shows a drop of 1.8 cents a litre.
*Stove oil shows a drop of 1.8 cents a litre as well.
*Diesel shows a drop of 2.5 cents a litre, and...
*Gasoline shows a drop of 4.8 cents a litre.
Market highlights
*OPEC still won't Institute any kind of a production cut, in spite of the protests of a few members who would like to see. Some support to oil prices. Revenues have certainly taken a beating! But at the latest meeting in Vienna this past Friday, it was decided by members to Sally forth and keep production levels up. With the promise of added production, Oil prices dropped with refined commodity prices following.
*Is OPEC now chasing down the non-OPEC producers? Countries like Russia, Mexico, Norway, and yes, Canada, continue to produce crude oil from fields that have been pumping for years now. None of the companies, or the countries in question, want to lose revenues, nor can they be seen to fall to the whims of OPEC when they want to see other countries reign in production. OPEC would like to see non-OPEC nations join in with production cuts.
Can't happen...
With OPEC getting that "no" answer, first from Russia, OPEC will now start to make the run after these countries. If you can't get them to "participate" in cuts, I believe OPEC is starting to go after their bottom line to force them into an untenable operating position. That being the case, and with Iran about to enter the markets, Oil prices could drop further. And with new Iranian crude to the markets chiefly for the European markets, Brent prices could be tagged first.
*The Canadian dollar continues to show weakness against the US greenback with the Canuck buck losing another two cents against the neighbouring currency.
I'll leave it at that for now. If you want, drop me a line!
Regards,
George
Twitter @GeorgeMurphyOil
Tuesday, November 24, 2015
Price changes for Thursday, November 26, 2015
Hi to all,
Here's what I have for this week's price changes, keeping in mind winter fuel blending that may affect numbers for heating oil and Diesel fuels.
Here's what I have for this week's price changes, keeping in mind winter fuel blending that may affect numbers for heating oil and Diesel fuels.
Heating oil shows a drop of 1.9 cents a litre.
Stove oils also point down 1.9 cents a litre.
Diesel shows a drop of a penny, and...
Gasoline shows an increase of 1.4 cents a litre.
Consumers may get hit next week
"While some prices show upwards movement, it may really be next week that we may see a substantial hit at the pumps because of today's Middle East action, and even then, it's really a test of a different market." That's according to George Murphy, group researcher with the Consumer Group for Fair Gas Prices.
"While distillate fuels are pointing down, all this week showed speculators pouring money into gasoline because that's the only place that is showing any signs of demand placed on it. The actions in Turkey today showed that, while there's plenty of crude oil out there, any Middle East action could be mitigated by other sources that can play into the markets. There's a huge oversupply out there, combined with the ability for the US domestic market to respond to any potential problems. We have a different market reality out there. I expected today's incident to play out in the markets heavier than it did.
"Today showed no 'huge' increase in oil, although it did rise another $1.20 US on the up-tick in the Middle East. It was an up-tick in refined commodities that is rearing its head. Gasoline spots rose another two cents a litre on Turkey speculation, and if it holds for the rest of this business week, we could see consumers get dinged a few more pennies next week as a result. We'll have to let the markets play out to confirm that."
-30-
For more information, contact;
George Murphy
Twitter @GeorgeMurphyOil
Tuesday, November 17, 2015
Price changes for Thursday, November 19, 2015
Hi to all,
Here's what I have for this week's price changes. Again, keep in mind that heating oil and diesel fuels are affected by the winter blending of fuels and may be off somewhat with the addition of jet fuel to the mix:
Heating oil shows a drop of 3.6 cents a litre.
Stove oil shows a drop of 3.6 cents as well.
Diesel fuel shows a drop of 3.3 cents a litre, and...
Gasoline points down 4.7 cents a litre.
Here's what I have for this week's price changes. Again, keep in mind that heating oil and diesel fuels are affected by the winter blending of fuels and may be off somewhat with the addition of jet fuel to the mix:
Heating oil shows a drop of 3.6 cents a litre.
Stove oil shows a drop of 3.6 cents as well.
Diesel fuel shows a drop of 3.3 cents a litre, and...
Gasoline points down 4.7 cents a litre.
Consumers to see a drop to all fuel prices this week
Consumers will see substantial drops to all fuel prices this week as inventory data shows continued strong builds of oil inventories and weak demand for refined commodities like heating oil and gasoline. That's the word from George Murphy, group researcher for the Consumer Group for Fair Gas Prices.
"Numbers over the last week, especially since the Energy Information Administration released the latest inventory data on Wednesday, have been pointing down, and it doesn't appear that the numbers are going to get any better for those seeking higher prices," Murphy said. When you see some refineries coming back online from winter maintenance, and those refiners holding back on putting some stocks through for refining, you know there's going to be blow-back, in this case for the consumer. It appears that this is what happened over the last week, and that trend just might continue.
"Markets are also showing signs of a possible price war between some OPEC members that has been brewing since Iran signed on to a deal that will result in the lifting of sanctions this December. Previously, it was known that Iran would notify member nations of OPEC when it was ready to come back to higher production, but buried deep in the news was a quote from Iran stating 'The drop in prices won't be a concern for us. It will be a concern for those who replaced Iran'. I take that as meaning there's going to be payback for member nations and producers who stepped in to take up the oil deficit when sanctions were first placed on Iran years ago. Fellow OPEC members are on notice now. It's going to be worth watching how OPEC handles the situation of Iran's extra production of oil that chiefly goes to European customers. Brent prices may fall lower as a result.
"It's going to make a lot of speculators wonder again just where the bottom for oil prices really is. Here's hoping that consumers can see a positive benefit to that."
(30)
For more information, contact;
George Murphy
Twitter @GeorgeMurphyOil
Tuesday, November 10, 2015
Price changes for Thursday, November 12, 2015
Here's what I have for this week's price changes, keeping in mind that winter blending affects the outcome of numbers for heating oil and diesel fuel because of the addition of jet fuel to their various mixes.
Heating oil shows no change in price.
Stove oil also shows no change in price.
Diesel fuel shows a drop of 3/10ths of a cent a litre, and...
Gasoline shows an increase of 7/10ths of a cent a litre.
Heating oil shows no change in price.
Stove oil also shows no change in price.
Diesel fuel shows a drop of 3/10ths of a cent a litre, and...
Gasoline shows an increase of 7/10ths of a cent a litre.
Some prices to remain steady this week: Murphy
Consumers won't see much in the way of price changes this week as the markets remained relatively steady in trading. That's according to George Murphy, group researcher for the Consumer Group for Fair Gas Prices. As a matter of fact, for some fuels, there won't be any changes.
"While West Texas Intermediate saw some retreat in its barrel price, and Brent prices followed WTI down, refined commodity prices remained overall steady as well for the most part, with the exception being a very moderate increase to gasoline spot prices. New York mercantile pricing showed gasoline rising from an average 49.6 cents a litre to 50.3 cents a litre over the last week. This means a slight upwards adjustment maybe seen for gasoline prices to consumers by a slim margin of 7/10ths of a cent based on that activity", Murphy said.
"Refineries ran at close to 89 percentage points, a modest increase, but shows refineries are coming back online from winter maintenance schedules. Close on 660,000 barrels a day production remains offline due to that. While there was an addition to crude oil inventories last week, a draw from US gasoline inventories is a sign indicative of lower inputs to refineries as a way to support prices to consumers at the pump. That's a finger pointing at the industry controlling how much gasoline is actually coming into inventories. Why produce a product if no one is buying?
"While the International Energy Agency has put the word out on a possible recovery in oil prices, I don't see anywhere in their prediction the fact of how responsive US oil producers can come back online and actually keep that supposed recovery from actually happening. Important to note here is that factor. Far beyond anyone's expectations, the US reached a high of 9.6 million barrels a day almost overnight by oil industry standards. They keep forgetting that producers will respond quite readily to any increase in oil prices to attempt to gain their lost market-share back. I still think it's going to be a while beyond 2020 before we see steady oil at $80 US. Almost 4700 wells ready-made to produce oil stateside is saying so."
(30)
For more information, contact;
George Murphy
Twitter @GeorgeMurphyOil
Tuesday, November 03, 2015
Price changes for Thursday, November 5th, 2015
Good evening!
Final numbers are in and they still show more of an increase than yesterday's alert, so please forward to all your friends!
Here's what I have for this week's price changes, keeping in mind the winter heating and diesel fuel blends that may show off a little on accuracy!
Heating oil shows an increase of 1.4 cents a litre.
Stove oil also shows an increase of 1.4 cents.
Diesel fuel shows an increase of 2.3 cents a litre, and...
Gasoline shows an added 3.3 cents a litre.
"There's good news in rising crude oil prices for some out there, but consumers aren't going to enjoy an upwards adjustment to prices for the refined products this week when the PUB releases the numbers Wednesday at midnight!" That's according to George Murphy, group researcher for the Consumer Group for Fair Gas Prices.
"Over the past week, I've seen a rough $4 US increase to both West Texas Intermediate and Brent crudes that I track. What's upsetting here is that refined commodity prices have risen sharply along with them, showing consumers will be getting hit along the way," Murphy said. "Consumers will notice the increased price of gasoline and Diesel fuels this week.
Market news
"The news from the markets doesn't seem to show any justification for the increase in refined products. Refineries are coming back online, with the latest figures showing a mere 800K barrels of refining capacity now offline with winter maintenance. With almost a million barrels per day back online, you should see at least that much gasoline being added to inventories. Demand still remains down, and speculators are betting on an increase in crude oil products when the Energy Information Administration releases the latest data 12 noon, Newfoundland time.
OPEC itself shows no signs of cutting back with the member nations producing 32.2 million barrels a day in October. Russian production also increased last month to 10.8 million barrels a day. There's no sign of a drop in worldwide production, so why are crude oil prices rising? Iran is also set to add more to the markets with the country making a formal announcement December 4th, that they will be making a boost in production. Some are saying that Iran will add an immediate 700,000 barrels to the daily market from their present 2.7 million in October, with at least 40 million barrels in what is known as "floating storage".
Refining shows best profit in years
News from the markets also is showing why it is good to be a refiner these days, and may reflect on how well our own North Atlantic refinery may be performing. Latest figure I have works out to a profit of a rough $16 Canadian a barrel. That's about $1.68 million per day out of Placentia Bay, based on the latest figures I was able to acquire from the southern US refiner. But let there be no mistake why a truly integrated oil company is making money now, as well as refiners: Crude acquisition costs are well down with the crash in oil, and it's there that they've been making some good dollars!
George
Twitter @GeorgeMurphyMHA
Final numbers are in and they still show more of an increase than yesterday's alert, so please forward to all your friends!
Here's what I have for this week's price changes, keeping in mind the winter heating and diesel fuel blends that may show off a little on accuracy!
Heating oil shows an increase of 1.4 cents a litre.
Stove oil also shows an increase of 1.4 cents.
Diesel fuel shows an increase of 2.3 cents a litre, and...
Gasoline shows an added 3.3 cents a litre.
Rise in crude oil pushes up prices for consumers and refined products
"Over the past week, I've seen a rough $4 US increase to both West Texas Intermediate and Brent crudes that I track. What's upsetting here is that refined commodity prices have risen sharply along with them, showing consumers will be getting hit along the way," Murphy said. "Consumers will notice the increased price of gasoline and Diesel fuels this week.
Market news
"The news from the markets doesn't seem to show any justification for the increase in refined products. Refineries are coming back online, with the latest figures showing a mere 800K barrels of refining capacity now offline with winter maintenance. With almost a million barrels per day back online, you should see at least that much gasoline being added to inventories. Demand still remains down, and speculators are betting on an increase in crude oil products when the Energy Information Administration releases the latest data 12 noon, Newfoundland time.
OPEC itself shows no signs of cutting back with the member nations producing 32.2 million barrels a day in October. Russian production also increased last month to 10.8 million barrels a day. There's no sign of a drop in worldwide production, so why are crude oil prices rising? Iran is also set to add more to the markets with the country making a formal announcement December 4th, that they will be making a boost in production. Some are saying that Iran will add an immediate 700,000 barrels to the daily market from their present 2.7 million in October, with at least 40 million barrels in what is known as "floating storage".
Refining shows best profit in years
News from the markets also is showing why it is good to be a refiner these days, and may reflect on how well our own North Atlantic refinery may be performing. Latest figure I have works out to a profit of a rough $16 Canadian a barrel. That's about $1.68 million per day out of Placentia Bay, based on the latest figures I was able to acquire from the southern US refiner. But let there be no mistake why a truly integrated oil company is making money now, as well as refiners: Crude acquisition costs are well down with the crash in oil, and it's there that they've been making some good dollars!
(30)
For more information, contact;George
Twitter @GeorgeMurphyMHA
Tuesday, October 27, 2015
Price changes for Thursday, October 29th, 2015
Hi to all,
Here's what I have for this Thursday's price changes:
Heating oils to increase by 6/10ths of a cent a litre.
Stove oil adds 6/10ths of a cent a litre.
Diesel fuel adds 5/10ths of a cent, and...
Gasoline adds an additional 6/10ths of a cent a litre.
Here's what I have for this Thursday's price changes:
Heating oils to increase by 6/10ths of a cent a litre.
Stove oil adds 6/10ths of a cent a litre.
Diesel fuel adds 5/10ths of a cent, and...
Gasoline adds an additional 6/10ths of a cent a litre.
Consumers to see a slight increase to all fuels this week
St. John's, NL, October 27, 2015- Consumers in Newfoundland and Labrador can expect to see a rarity in the markets this week when the Public Utilities Board moves to adjust prices this coming Thursday, according to George Murphy, group researcher with the Consumer Group for Fair Gas Prices.
"While commodity prices have remained relatively steady this past seven days, it's the price of oil that has been slipping, and that has dragged down the Canadian dollar, an important factor in figuring out Canadian commodity prices," Murphy said." We've lost two and half cents against the US greenback since the 20th of the month, and that means a rough two cents taken from consumers. We should be looking at a drop in prices, if the dollar stayed the same as last week's paring with the US dollar".
"In the meantime, lower oil isn't crimping on oil company profits. British Petroleum is the latest to step forth and report a $1.8 billion dollar profit over the last quarter, and that's a good $600 million more than what was expected. I expect other integrated companies to report good numbers in the coming days. Anyone with refining capacity is doing well, and this shows it. It's not just about pumping oil. It's all about the finished product as well.
"I'm looking at this week's Energy Information Administration's inventory data tomorrow to get a read on the future of the gasoline and distillate markets. I'm betting on, not only a build in inventories of oil, but of gasoline as well, as refiners seem to be coming back online from winter maintenance schedules. Refinery outages were reported at 1.8 million barrels last week, but data is now showing 1.1 million barrels of processing remains offline. I'm betting on more gasoline to be added, and perhaps another run down in prices later in the day."
(30)
For more information, please contact;
George Murphy
Twitter @GeorgeMurphyMHA
Tuesday, October 20, 2015
Price changes for Thursday, October 22, 2015
Hello to all,
Here's what I have for Thursday price changes:
Heating oil to drop by 3.1 cents a litre*.
Stove oils to drop by the same 3.1 cents a litre.
Diesel to drop by 3.2 cents a litre*, and...
Gasoline to drop by 3.8 cents a litre.
*Note that both heating oil and Diesel fuel are subject to the winter blending now, so these numbers can just be used as a guide and not the actual that may occur!
"Consumers can expect to see another break at the pumps when the Public Utilities Board moves to adjust prices this Wednesday midnight", according to George Murphy, group researcher and co-founder of the Consumer Group for Fair Gas Prices. "Continued builds of gasoline inventory in spite of refinery outages due to winter maintenance have led to some good builds in inventories of gasoline. With the consumers of North America driving a little less than in summertime, it has started to reflect and impact prices substantially, and, this week too as predicted."
Final market numbers last week began to show that there was a substantial break for consumers about to hit, and I put the "warning" out of an impending drop in prices for this week that is coming to fruition. That prediction showed three cents across the board, and the final numbers were pretty close to that," Murphy said.
"I'm still seeing some heavy production out of OPEC and non-OPEC producers which continues to compound and lower oil prices. Floating storage figures still show a substantial amount of crude oil with nowhere to go, almost 164 million barrels in tankers, waiting for the call to sail.
"Again, with a possible end to winter refinery maintenance and turnover about to end, the return of refineries back to production has a possibility yet of impacting gasoline and other refined commodities down further. With 1.7 million in daily refining capacity offline right now, you can imagine the impact on the markets when they start adding again to inventories.
Most stations selling gasoline are already below a dollar a litre, and can be expected to sell a little lower as we get later in the week. The trend of prices looks steady for now, but once refining capacity kicks back in, should start to fall again".
Here's what I have for Thursday price changes:
Heating oil to drop by 3.1 cents a litre*.
Stove oils to drop by the same 3.1 cents a litre.
Diesel to drop by 3.2 cents a litre*, and...
Gasoline to drop by 3.8 cents a litre.
*Note that both heating oil and Diesel fuel are subject to the winter blending now, so these numbers can just be used as a guide and not the actual that may occur!
Consumers to get another break at the pumps this week
"Consumers can expect to see another break at the pumps when the Public Utilities Board moves to adjust prices this Wednesday midnight", according to George Murphy, group researcher and co-founder of the Consumer Group for Fair Gas Prices. "Continued builds of gasoline inventory in spite of refinery outages due to winter maintenance have led to some good builds in inventories of gasoline. With the consumers of North America driving a little less than in summertime, it has started to reflect and impact prices substantially, and, this week too as predicted."
Final market numbers last week began to show that there was a substantial break for consumers about to hit, and I put the "warning" out of an impending drop in prices for this week that is coming to fruition. That prediction showed three cents across the board, and the final numbers were pretty close to that," Murphy said.
"I'm still seeing some heavy production out of OPEC and non-OPEC producers which continues to compound and lower oil prices. Floating storage figures still show a substantial amount of crude oil with nowhere to go, almost 164 million barrels in tankers, waiting for the call to sail.
"Again, with a possible end to winter refinery maintenance and turnover about to end, the return of refineries back to production has a possibility yet of impacting gasoline and other refined commodities down further. With 1.7 million in daily refining capacity offline right now, you can imagine the impact on the markets when they start adding again to inventories.
Most stations selling gasoline are already below a dollar a litre, and can be expected to sell a little lower as we get later in the week. The trend of prices looks steady for now, but once refining capacity kicks back in, should start to fall again".
********
For more information, please contact:
George Murphy
Group researcher
Consumer Group for Fair Gas Prices
Twitter @GeorgeMurphyMHA
Tuesday, October 13, 2015
Price changes for Thursday, October 15, 2015
Hi to all,
Here's what I have for this week's price changes:
Heating oil shows a drop of just 3/10ths of a cent a litre.
Stove oil shows down by the same 3/10ths of a cent.
Diesel fuel shows a drop of 2/10thsof a cent a litre, and...
Gasoline shows a drop of 7/10ths of a cent.
Here's what I have for this week's price changes:
Heating oil shows a drop of just 3/10ths of a cent a litre.
Stove oil shows down by the same 3/10ths of a cent.
Diesel fuel shows a drop of 2/10thsof a cent a litre, and...
Gasoline shows a drop of 7/10ths of a cent.
*The real news may come next week on further drops in gasoline, diesel and heating oil prices as spot pricing has retreated somewhat the last two days. So far, gasoline shows a drop of three cents playing through on lower oil and a stronger Canadian dollar. Stove, heating oils and diesel all show the same trend in for next week as well. Anything can happen to change that in the coming days however!
In the news
OPEC production figures show a new record
OPEC produced almost 10.7 million barrels a day in September according to one report today, that probably led speculators when the glut of oil in the markets will end. While the union of oil producers wonders when the glut will lead to higher prices, they show no signs of reigning in production in an attempt to maintain market share. Oil in "floating storage" again continues to climb, signaling an abundance of oil with nowhere to go. Floating storage now shows close to 178 million barrels waiting aboard tankers with "no sale" in sight.
In the news
OPEC production figures show a new record
OPEC produced almost 10.7 million barrels a day in September according to one report today, that probably led speculators when the glut of oil in the markets will end. While the union of oil producers wonders when the glut will lead to higher prices, they show no signs of reigning in production in an attempt to maintain market share. Oil in "floating storage" again continues to climb, signaling an abundance of oil with nowhere to go. Floating storage now shows close to 178 million barrels waiting aboard tankers with "no sale" in sight.
IEA lowers world demand growth for 2016
The International Energy Agency has lowered its forecast for oil demand growth by another 600,000 barrels a day, already adding bad news to a market well over-supplied. The IEA has dropped worldwide demand for oil to 95.7 million barrels a day. Over the last five years, the IEA has tracked a yearly increase in demand of oil products by 1.8 million barrels, but has dropped that back to 1.2 million barrels of added consumption for 2016.
Iraq production well up ahead of Iran's market "re-entry"
Iraqi production in the month of September has hit 4.2 million barrels a day, well up from 3.8 million recorded a few short months ago. While Iran waits in the wings to begin production to a market free from sanctions, Iraq is simply trying to maintain their own customer base, ahead of Iran's re-entry with an added 500,000 barrels a day output.
That's it for this week!
Regards,
George
Twitter @GeorgeMurphyMHA
Tuesday, October 06, 2015
Price changes for Thursday, October 8, 2015
Hi to all,
Here's what I have for this week's price changes:
Heating and stove oil to increase by 4/10ths of a cent a litre.
Diesel fuel shows no change, and...
Gasoline shows an increase of 2/10ths of a cent a litre.
* A couple of notes first off. Winter blending is now in effect for heating oil as well as Diesel fuel. From now until later in spring, my numbers for these fuels will be slightly off because of the addition of jet fuel (kerosene) that is added as an anti-freeze agent. That's a fuel that I can't track as of yet. Use these numbers as a "guide" on the direction these fuels may go, and not the definitive.
In the markets
Russia and Saudi Arabia in talks
Interesting to hear that both countries are into discussions around the possibilities of controlling the outflow and production levels of crude oil. Both countries have a direct interest in supporting oil prices, but it could come at a cost if they're successful in limiting crude oil output.
At least, in the short term.
They run the risk of bringing back online all those wells that had been shut in as a result of lower oil prices, and in fact, if they do succeed in increasing oil prices, they may end up losing market share to US domestic producers and those countries who are waiting to also enter into the export markets. Countries like Venezuela and Ecuador are itching for oil prices to come back and they no doubt, will put out more oil to make up for lost revenues.
Still waiting in the wings however, is also the prospect of low China demand and Iran's entrance into the markets later this year in December, or in January, 2016. The entrance of Iran will add an immediate 500,000 barrels into an already over-supplied marketplace.
Oil up on lower US domestic production
The price of oil increased today on speculation that US domestic production has taken a pounding as a result of lower oil prices. Numbers are showing that production has dropped off anywhere from 500,000 barrels a day to as low as 150,000 barrels. That being the case, US domestic production rests somewhere around nine million barrels a day. Keep in mind though, that with any rapid rise in prices, there will be a response by the small oil producer out there. The spigots can be quickly turned back on.
Turning point?
"We're not there yet".
As some oil companies have said in the media, there's a belief that we've reached a turning point where they are saying a recovery is on the way, but they're not so eager to carry on with a return to oil $100 a US barrel. Predictions of a "recovery" include $57 US a barrel in 2016 and slightly more in 2017. What I do think is that they don't consider a rapid response from small US producers in the equation. $57 US is not a "recovery". It's a factor in determining if small producers turn the drill bits into the ground again.
I'll leave it at that for now,
Regards,
George
Twitter @GeorgeMurphyMHA
Here's what I have for this week's price changes:
Heating and stove oil to increase by 4/10ths of a cent a litre.
Diesel fuel shows no change, and...
Gasoline shows an increase of 2/10ths of a cent a litre.
* A couple of notes first off. Winter blending is now in effect for heating oil as well as Diesel fuel. From now until later in spring, my numbers for these fuels will be slightly off because of the addition of jet fuel (kerosene) that is added as an anti-freeze agent. That's a fuel that I can't track as of yet. Use these numbers as a "guide" on the direction these fuels may go, and not the definitive.
In the markets
Russia and Saudi Arabia in talks
Interesting to hear that both countries are into discussions around the possibilities of controlling the outflow and production levels of crude oil. Both countries have a direct interest in supporting oil prices, but it could come at a cost if they're successful in limiting crude oil output.
At least, in the short term.
They run the risk of bringing back online all those wells that had been shut in as a result of lower oil prices, and in fact, if they do succeed in increasing oil prices, they may end up losing market share to US domestic producers and those countries who are waiting to also enter into the export markets. Countries like Venezuela and Ecuador are itching for oil prices to come back and they no doubt, will put out more oil to make up for lost revenues.
Still waiting in the wings however, is also the prospect of low China demand and Iran's entrance into the markets later this year in December, or in January, 2016. The entrance of Iran will add an immediate 500,000 barrels into an already over-supplied marketplace.
Oil up on lower US domestic production
The price of oil increased today on speculation that US domestic production has taken a pounding as a result of lower oil prices. Numbers are showing that production has dropped off anywhere from 500,000 barrels a day to as low as 150,000 barrels. That being the case, US domestic production rests somewhere around nine million barrels a day. Keep in mind though, that with any rapid rise in prices, there will be a response by the small oil producer out there. The spigots can be quickly turned back on.
Turning point?
"We're not there yet".
As some oil companies have said in the media, there's a belief that we've reached a turning point where they are saying a recovery is on the way, but they're not so eager to carry on with a return to oil $100 a US barrel. Predictions of a "recovery" include $57 US a barrel in 2016 and slightly more in 2017. What I do think is that they don't consider a rapid response from small US producers in the equation. $57 US is not a "recovery". It's a factor in determining if small producers turn the drill bits into the ground again.
I'll leave it at that for now,
Regards,
George
Twitter @GeorgeMurphyMHA
Tuesday, September 29, 2015
Price changes for Thursday, October 1, 2015
Hi to all,
Here's what I have for price changes for Thursday:
Heating and stove oils to increase by a penny
Diesel to increase by 8/10ths of a cent a litre, and...
Gasoline shows an increase of 3/10ths of a cent a litre.
Here's what I have for price changes for Thursday:
Heating and stove oils to increase by a penny
Diesel to increase by 8/10ths of a cent a litre, and...
Gasoline shows an increase of 3/10ths of a cent a litre.
In the news
A halt to Arctic drilling
Royal Dutch Shell has announced it is discontinuing its offshore exploration program off Alaska, and that goes in hand with sanctions against Russia over the Ukraine, in fact, hitting RDS twice. The plans by Royal Dutch Shell included a program of drilling in Russian Arctic waters that lay between that country and Alaska. While it may appear surprising, it shouldn't in a new world of $50 US a barrel oil along with the fact that they simply couldn't explore in their program against sanctions placed that disrupted exploration. It wasn't all about $50 US.
With the potential of upwards of 25 billion barrels estimated to be in Arctic waters, I find it hard to believe that they would turn away from a project that could result from the discovery of such potential reserves.
Canadian dollar figures against fuel prices...Again
The Canadian dollar has again accounted for a slight increase to prices this week. While some refined commodity prices slipped slightly this week, the drop in the Canadian dollar against the US greenback. Had the dollar remained stable this past week, we could have been looking at a drop of a penny across the board. As it stands right now, had the dollar been at par with the US dollar, we would be looking at heating/stove oils, gasoline and Diesel all 13 cents plus taxes lower than what we see to the consumer right now.
US refineries still down for winter maintenance
With almost 18.6 million barrel a day capacity, one would almost be in shock in learning that 1.4 million barrels is presently offline due to factors like winter maintenance schedules. No need to be alarmed as refiners routinely shut down refining to switch over to production of winter fuels like heating oils and diesel fuels at this ti. Refiner capacity should start to climb again in the coming weeks, taking further supporting pressure off gasoline prices as inventory is again added to stocks.
That's it for this week!
Regards,
George
Twitter @GeorgeMurphyMHA
Tuesday, September 22, 2015
Price changes for Thursday, September 24, 2015
Hi to all,
Here's what I have for this week's price changes:
Heating and stove oils to drop by 4/10ths of a cent a litre.
Diesel also down by 1.4 cents a litre, and...
Gasoline shows a small drop of just 6/10ths of a cent a litre.
In the news
Refiner capacity
With refineries mostly into maintenance mode now, not a lot of gasoline is coming back into the markets that shows we're into a strong inventory building mode. With a drop in gasoline demand as a result of the end of the summer driving season, and refineries offline due to the switch to winter production, markets are showing relatively steady for gasoline prices as demand fails to seriously impact inventories. While no inventories have been impacted by demand, any possible build has been sidelined as well, and it's showing in prices that are mostly steady as a result.
Crude in "floating storage"
Latest numbers indicate an overall drop in floating storage as a market oversupply continues to weigh down prices. Present figures show almost 150 million barrels still out there in storage with nowhere to go as over-production continues to negate any sale of crude.
China keeps buying "low"
China continues to buy at almost record lows of oil over the last ten years, and they may very well be a factor in where oil goes in the coming years. With China adding almost 500,000 barrels a day to their strategic reserve at these low prices, China has undertaken a program of adding additional storage capacity to their strategic reserve. With China stocks filled with 220 million barrels of crude, their added capacity program includes close to an added 135 million barrels now under construction and an added 148 million in the planning stage.
Future price of oil
With "futures" pricing showing crude selling at $58 and change for fiscal 2017, the news is not good for those hoping for higher oil prices. Fiscal 2016 Brent prices are hanging in the mid $53 US a barrel range. China's continuing purchase of crude to add to its strategic reserve remains a vital factor in why oil has not crashed completely. That, and the fact that US domestic producers simply can't master production at lower levels without hurting their bottom lines. If prices do rise, US domestic will only increase again to lower them as producers try to gain some revenue from their investment.
Iran continues to weigh on oil
The promise of Iran's "re-entry" into the oil markets also continues to keep prices down. While Iran is continuing to work toward meeting the goals required to lift sanctions, word is that they're extremely close to meeting the December goal that could add another 500,000 barrels immediately to world production of oil. While some don't think it will figure, any past addition/cut by OPEC in oil production has to have at least the temporary effect of lowering prices in this case. There's more trouble ahead for Brent!
I'll leave it at that for now!
Regards,
George
Twitter @GeorgeMurphyMHA
Here's what I have for this week's price changes:
Heating and stove oils to drop by 4/10ths of a cent a litre.
Diesel also down by 1.4 cents a litre, and...
Gasoline shows a small drop of just 6/10ths of a cent a litre.
In the news
Refiner capacity
With refineries mostly into maintenance mode now, not a lot of gasoline is coming back into the markets that shows we're into a strong inventory building mode. With a drop in gasoline demand as a result of the end of the summer driving season, and refineries offline due to the switch to winter production, markets are showing relatively steady for gasoline prices as demand fails to seriously impact inventories. While no inventories have been impacted by demand, any possible build has been sidelined as well, and it's showing in prices that are mostly steady as a result.
Crude in "floating storage"
Latest numbers indicate an overall drop in floating storage as a market oversupply continues to weigh down prices. Present figures show almost 150 million barrels still out there in storage with nowhere to go as over-production continues to negate any sale of crude.
China keeps buying "low"
China continues to buy at almost record lows of oil over the last ten years, and they may very well be a factor in where oil goes in the coming years. With China adding almost 500,000 barrels a day to their strategic reserve at these low prices, China has undertaken a program of adding additional storage capacity to their strategic reserve. With China stocks filled with 220 million barrels of crude, their added capacity program includes close to an added 135 million barrels now under construction and an added 148 million in the planning stage.
Future price of oil
With "futures" pricing showing crude selling at $58 and change for fiscal 2017, the news is not good for those hoping for higher oil prices. Fiscal 2016 Brent prices are hanging in the mid $53 US a barrel range. China's continuing purchase of crude to add to its strategic reserve remains a vital factor in why oil has not crashed completely. That, and the fact that US domestic producers simply can't master production at lower levels without hurting their bottom lines. If prices do rise, US domestic will only increase again to lower them as producers try to gain some revenue from their investment.
Iran continues to weigh on oil
The promise of Iran's "re-entry" into the oil markets also continues to keep prices down. While Iran is continuing to work toward meeting the goals required to lift sanctions, word is that they're extremely close to meeting the December goal that could add another 500,000 barrels immediately to world production of oil. While some don't think it will figure, any past addition/cut by OPEC in oil production has to have at least the temporary effect of lowering prices in this case. There's more trouble ahead for Brent!
I'll leave it at that for now!
Regards,
George
Twitter @GeorgeMurphyMHA
Tuesday, September 15, 2015
Price changes for Thursday, September 17, 2015
Hi to all,
Here's what I have for price changes this week:
Heating and stove oils to drop by 2.2 cents a litre.
Diesel to drop by 2.9 cents a litre, and...
Gasoline to drop by 3.9 cents a litre.
In the markets
OPEC market tidbits
In what must be true irony, Venezuela is now proposing that OPEC adopt a new policy of having a minimum price for oil! With oil prices crashing and causing a stark reality of lower oil revenues to the OPEC member state, the country is having to face just how low oil goes as speculators also bet on how low prices can drop. In conversation the other day, I reflected on remembrances of OPEC being happy with maximum prices between $22 and $28 US as early as 1997 when I started studying oil. I wonder if they're really getting back to the new reality of oil now?
Iraq is asking oil companies operating there to reign in any capital spending for the next fiscal year, citing lower expected revenues from oil.
Out of China
China's future demand for oil is expected to drop further in the face of a weakening economy, with demand expected to drop from an added 400K barrels a day to only 260 K barrels a day better than what they use now. Slower growth comes a slower need with an economy in trouble. Latest word also has China adding just 400,000 barrels a day to their strategic reserves where they previously purchased 750K per day.
I'll leave it at that for now. If you need anything else, drop me a line.
Regards for now,
George
Twitter @GeorgeMurphyMHA
One of these days, I'm going to sit on a stage and give some of these oil companies some sage advice! Either that, or let them pick my brain...lol
Here's what I have for price changes this week:
Heating and stove oils to drop by 2.2 cents a litre.
Diesel to drop by 2.9 cents a litre, and...
Gasoline to drop by 3.9 cents a litre.
In the markets
OPEC market tidbits
In what must be true irony, Venezuela is now proposing that OPEC adopt a new policy of having a minimum price for oil! With oil prices crashing and causing a stark reality of lower oil revenues to the OPEC member state, the country is having to face just how low oil goes as speculators also bet on how low prices can drop. In conversation the other day, I reflected on remembrances of OPEC being happy with maximum prices between $22 and $28 US as early as 1997 when I started studying oil. I wonder if they're really getting back to the new reality of oil now?
Iraq is asking oil companies operating there to reign in any capital spending for the next fiscal year, citing lower expected revenues from oil.
Out of China
China's future demand for oil is expected to drop further in the face of a weakening economy, with demand expected to drop from an added 400K barrels a day to only 260 K barrels a day better than what they use now. Slower growth comes a slower need with an economy in trouble. Latest word also has China adding just 400,000 barrels a day to their strategic reserves where they previously purchased 750K per day.
I'll leave it at that for now. If you need anything else, drop me a line.
Regards for now,
George
Twitter @GeorgeMurphyMHA
One of these days, I'm going to sit on a stage and give some of these oil companies some sage advice! Either that, or let them pick my brain...lol
Tuesday, September 08, 2015
Price changes for Thursday, September 10th, 2015
Hi to all,
Here's what I have for this week's price changes:
Heating and stove oils to increase by 1.9 cents a litre.*
Diesel to increase by 2.3 cents a litre*, and...
Gasoline also adds 1.1 cents a litre.
*With increases to distillate fuels like heating and diesel exceeding that for gasoline, it's an easy signal that speculators in the markets have now turned their attention away from the gasoline markets for the next little while. I expect more attention on these fuels from the speculators for the next few months
.
In the markets
Volatility in the oil market continues to show wild swings as they attempt to find at least a temporary bottom to oil prices. Speculators still fear a further drop in oil prices, probably part of the reason why oil hasn't shown any appreciable increase in the past few weeks. Indeed, the gains and sudden drops in oil are consistent with speculators continuing fears of bad economic news yet to come with the markets. Some speculators are saying oil prices could retreat even further, and as low as $30 US a barrel before we see some sense return to the markets.
The latest production figures from the US Energy Information Administration are telling some news that the "oil price war" is beginning to tell on overall US domestic production. The Saudi's fired the initial shots to try and reign in US production of domestic resources by driving down prices for oil to a point that it simply wouldn't be affordable to pump. US domestic production has dropped from peak production in July of 9.6 million barrels a day to the latest August 28th report of 9.2 million barrels a day. Of course, part reason of market fears whenever we see oil prices rally also centers on the fact that, while the spigots have turned off, any increase in oil prices can easily turn them back on again.
That's it for this week!
Regards,
George
Twitter @GeorgeMurphyMHA
Here's what I have for this week's price changes:
Heating and stove oils to increase by 1.9 cents a litre.*
Diesel to increase by 2.3 cents a litre*, and...
Gasoline also adds 1.1 cents a litre.
*With increases to distillate fuels like heating and diesel exceeding that for gasoline, it's an easy signal that speculators in the markets have now turned their attention away from the gasoline markets for the next little while. I expect more attention on these fuels from the speculators for the next few months
.
In the markets
Volatility in the oil market continues to show wild swings as they attempt to find at least a temporary bottom to oil prices. Speculators still fear a further drop in oil prices, probably part of the reason why oil hasn't shown any appreciable increase in the past few weeks. Indeed, the gains and sudden drops in oil are consistent with speculators continuing fears of bad economic news yet to come with the markets. Some speculators are saying oil prices could retreat even further, and as low as $30 US a barrel before we see some sense return to the markets.
The latest production figures from the US Energy Information Administration are telling some news that the "oil price war" is beginning to tell on overall US domestic production. The Saudi's fired the initial shots to try and reign in US production of domestic resources by driving down prices for oil to a point that it simply wouldn't be affordable to pump. US domestic production has dropped from peak production in July of 9.6 million barrels a day to the latest August 28th report of 9.2 million barrels a day. Of course, part reason of market fears whenever we see oil prices rally also centers on the fact that, while the spigots have turned off, any increase in oil prices can easily turn them back on again.
That's it for this week!
Regards,
George
Twitter @GeorgeMurphyMHA
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