Hi to all,
Been at this for
twenty three years as of last week. Hard to believe...
Here’s what I have
for this week’s price changes:
*Heating, stove oil
and Diesel fuel all show an increase of 4/10ths of a cent a litre.
*Gasoline shows an
increase of 2.1 cents a litre.
Market highlights
OPEC meeting is set
for next week
OPEC and non-OPEC
members will meet December 5th and 6th to discuss a
possible additional cut to oil production in an effort to cut back on a world
glut of oil and to help support prices.
OPEC members will start with their own meeting on the 5th, followed
by a meeting on the 6th where they will be joined by non-OPEC
Ministers.
It is the 177th time for OPEC to meet and just the seventh time for
non-OPEC countries.
Meetings to discuss deeper cuts to OPEC’s self imposed cuts of 1.2 million
barrels a day have played on the markets the last few weeks, with prices rising
higher in the last two weeks as the meetings drew near.
US Thanksgiving Day
drives demand
The U.S
Thanksgiving Day holiday has done what some have feared the last few weeks:
drive up prices to consumers.
With an anticipated increase in travel over the next few days, gasoline has
risen as a result that will have some impact on overall supply. But increases
have been tempered somewhat by growing inventories with prices up, but not as
sharply as other years.
US EIA inventory
data
Latest news from
the Energy Information Administration indicates that crude oil continues to
build with inventories adding 1.4 million barrels for the ninth week out of
ten.
Gasoline inventories added 1.8 million barrels, while distillates dropped a
million.
Refiner capacity was recorded at 89.5 percent.
US domestic output was steady at 12.8 million barrels a day.
That’s it for this
week!
Regards,
George Murphy
Twitter
@GeorgeMurphyOil
Hi to all,
Here’s what I have
for this week’s price changes:
*Heating and stove
oil show an increase of 3/10ths of a cent a litre.
*Diesel fuel shows
an increase of 7/10ths of a cent a litre, and...
*Gasoline shows a
drop of 3/10ths of a cent.
Market highlights
US and China on
again-off again
The U.S and China
just seem to not be able to agree to anything, and the agreement that speculators
thought may be coming-is not-again.
China is said to be wanting the US to roll back some tariffs with more due to
hit December 15th, just less than four weeks away.
Having said that, China is also thinking that they may be better off waiting to
find out the results of the U.S impeachment hearings that are ongoing, so they
can try their luck with different leadership.
Oil initially showed increasing prices for this session, that is, until news
broke of stalled talks and a watered down agreement.
Russia dropping
out?
Saudi-led OPEC cuts
to production, in concert with other oil producing nations, may be in trouble
when OPEC meets to renew the production cut agreement next month in Vienna.
Russia is said to be not there yet in agreement to a further cut in production
should the topic of deepening the cuts to production come up. The present
agreement runs until March of 2020, and Russia seems to agree to the same level
as agreed last year, but OPEC wants to reach a new agreement to carry on with
deeper cuts this year.
Oil started a retreat Monday on the news.
OPEC meets December 5th, just under three weeks away.
US inventories
The latest report
on the state of US inventories is out.
Crude supplies grew for the eighth week out of nine as inventories added 2.2
million barrels to a growing US supply.
Gasoline also increase 1.9 million barrels while distillates dropped by 2.5
million barrels.
Refiner capacity was reported at 87.8 percent and US domestic output was up to
12.8 million barrels a day.
Interesting debate
in the House of Assembly
The House of
Assembly will debate a government motion about the placement and use of
electric vehicle charging stations in the House on Wednesday as increased use
of electric vehicles continues to draw interest from consumers.
The motion introduced by MHA Perry Trimper, who himself is a user of an
electric vehicle, will centre on an experimental program for placing charging
stations in predominant locations along the Trans Canada Highway to generate
interest in the use of electric vehicles as an alternative transportation
choice.
Interesting as it is and just as a comparison, I worked out preliminary numbers
on an imaginary trip to Grand Falls-Winsor using gas and then comparing it to
electricity.
What
cost me $70 in a fill-up to make it there would cost me about $7 in
electricity.
Not bad...
The debate in the House starts at 3PM.
That’s it for this
week!
Regards,
George Murphy
Twitter
@GeorgeMurphyOil
Hi to all,
Here’s what I have
for this week’s price changes:
*Heating oil, stove
oil and Diesel fuel all show no changes to prices.
*Gasoline shows a
drop of 1.4 cents a litre.
Market highlights
US-China trade and
tariffs stall the markets
US-China trade
talks have stalled and markets are eagerly awaiting word, positive or negative-
that may at least give them a sense of direction.
Markets stalled late last week as President Donald Trump denied earlier
thinking that a deal was close, saying instead that “Washington wasn’t going to
sign any deal that wasn’t good for the US”. Trump is on record at the Economics
Club of New York just today stating that if the US doesn’t get a deal it likes,
then tariffs will go up”.
The next round of tariffs are due to be applied to almost $155 billion in
Chinese goods and services on December 15th.
Iran sanctions
continue
Iran is finding it
harder to sell its oil on the open market because of ongoing sanctions, but it
is selling some.
Iran is running out of storage space that could create further issues in the
country as it may have to cut back production.
Iranian production was reported at 2.2 million barrels a day last month, well
down from May 2018 when production was measured at 3.8 million barrels a day.
Sanctions have hit hard at Iran’s bottom line with it showing in recent news
that Iran needs oil to hit $195 US a barrel for the finances of the country to
show balanced books.
U.S inventories
US inventories may
singularly be showing signs of a growing glut and a world slowdown in demand of
oil if the trend continues much longer.
Seven of eight of the last sets of inventory data have shown growing crude oil
supplies, the latest data still showing crude supply grew by an added 7.9
million barrels last week.
Gasoline supplied dropped 2.8 million barrels while distillate supplies dropped
600,000 barrels.
Refiner capacity dropped back slightly to sit at 86 percentage points.
The next release of
inventory data happens Thursday, a day later than the usual as a result of
Remembrance Day.
That’s it for this
week!
Regards,
George Murphy
Twitter
@GeorgeMurphyOil
Hi to all,
Here’s what I have
for this week’s price changes:
*Heating and stove
oils show a drop of 1.6 cents a litre.
*Diesel fuel shows
a drop of 1.5 cents a litre, and...
*Gasoline shows no
change in price this week.
Market highlights
US-China trade
optimism
The US and China
are said to be close to an agreement that could lead to resolution of the trade
dispute that has cost both countries an estimated $100 billion in tariffs and
fines.
China has been asking the US to remove some tariffs that were imposed by the US
as late as September as a show of optimism that a deal can be reached going
forward. They may do exactly that as a measure to have Chinese tariffs on oil dropped
so the US can export more, thus supporting US oil prices.
OPEC+ still mulling
production cut
OPEC and non-OPEC
members are still playing with the idea of a production cut as their December
meeting comes closer, but the spectre of sticking to those cuts remains as
pervasive as ever.
Russia, a participant in the cuts since January has reported that they produced
almost 11.3 million barrels a day of oil last month, well ahead of their own
production cut as agreed to with OPEC member nations.
The present agreement is set to end in March, 2020.
Iran rattles nerves
Iran has announced
that it has added another 1000 centrifuges to refine uranium as Iran
makes further moves away from the 2015 nuclear agreement.
Iran
wants sanctions to be removed so it can avoid further damage to its economy,
and according to officials that say the sanctions have been unduly harsh on the
oil exporting country.
There may be something to that as analysts say that Iran needs oil to hot in
excess of $190 a barrel US just to balance the books in 2020.
US inventories
US crude oil
inventories increased in the week ending October 25th, adding 5.7
million barrels to crude oil inventories.
Gasoline lost three million barrels, while distillates dipped a million
barrels.
Refiner capacity was measured at 87.7 percent, up slightly from the last report
as some refineries came back online.
That’s it for this
week!
Regards,
George Murphy
Twitter
@GeorgeMurphyOil
Hi to all,
Here’s what I have
for this week’s price changes:
*Heating and stove
oil to increase by 6/10ths of a cent a litre.
*Diesel to increase
by 3/10ths of a cent a litre, and...
*Gasoline shows an
increase of 1.5 cents a litre.
Market highlights
Oil prices up
As oil prices have
been going in recent months, any increase in oil prices is a celebration for
some speculators at a time when there hasn’t been much to celebrate.
Over the past week, oil prices have risen about $2 US a barrel as
speculators see hopeful signs that the US and China will see an end to
their trade and tariff dispute.
Stock
markets have been mostly in record territory again as traders see an increase
in demand for oil if trade barriers are lifted off China.
OPEC making moves
OPEC and non-OPEC
member oil producers continue to dwell on production cuts as Saudi Arabia is
said to be ready to do anything to support prices.
Already Saudi Arabia has made a preliminary move of checking on production
levels in OPEC member nations to make sure they have been complying to their
side of production cuts before they formally announce measures or further cuts
to production quotas
Old habits die hard as OPEC members have often been cheating on their own
quotas whenever they see a fiscal advantage as prices rise. In the meantime,
compliance was itself pretty good in recent months and talk amongst members and
non-OPEC members indicates some willingness to institute a further round of
cuts.
Just how much they will end up cutting remains open at this time.
US inventory data
The Energy
Information Administration released its weekly report Wednesday that showed a
1.7 million barrel drop in crude stocks as well as a draw in gasoline
inventories of 3.1 million barrels.
Distillate supplies also saw a draw of 2.7 million barrels.
Refiner capacity was recorded at 85.2 percent for the week as refiners
continued maintenance programs.
That’s it for this week!
Regards,
George Murphy
Twitter
@GeorgeMurphyOil
Hi to all,
Due to the fact
that I have not received data for Friday’s market numbers, numbers may be off
slightly from the actual that may occur. Here’s what I have for this week’s
price changes:
*Heating and stove
oil shows an increase of a half cent (5/10ths) a litre.
*Diesel fuel shows
an increase of 9/10ths of a cent per litre, and...
*Gasoline shows an
increase of 1.5 cents a litre.
Market highlights
US-China trade deal
The US and China
are reported to be close to an agreement on tariffs, but you’d hardly think
that was true according to oil’s performance the past few days.
Speculators are laying 50/50 odds of a signed agreement by the end of October
that may (or may not) return trade between the two world economic powers back
to something more normal.
Oil markets responded positively on Thursday moving higher as speculators
thought an increase in oil demand would result, but it didn’t last very long.
Chewing into details, speculators found that there wasn’t much detail and that
the four foundations of the trade war weren’t even touched. China also made no
mention of the agreement and still wants to see December tariffs removed before
they sign onto anything.
Iranian tanker
attacked
Iran has claimed
that one of its tankers was attacked by missiles on Friday that helped support
oil prices as tensions continued to weigh on oil markets.
However,
the attacks didn’t raise prices as much as feared, but still showed that Middle
East targets abound and risk premiums remain on crude oil anywhere from the
Middle East.
IEA makes a cut to
forecasted oil growth demand
Just last month the
US EIA made projections on lower demand and this past week seemed to be
“seconded” by the International Energy Agency (IEA) as they moved downwards
their forecast for any growth in demand by another 100,000 barrels a day from
an initial projected growth of 1.1 million barrels a day.
No doubt that the lower forecast signals lower demand due to world economic
conditions.
US inventories
The US Energy
Information Administration released inventory data again Wednesday that showed
another build in overall crude oil stocks.
Inventories of crude oil increased by 2.9 million barrels while gasoline stocks
dropped 1.2 million barrels as refiner capacity was measured at 85.7
percent for the week as some refineries remained closed for winter maintenance.
Distillate inventories dropped by 3.9 million barrels as colder weather
increased demand for heating product.
U.S domestic oil production was recorded at 12.6 million barrels last week, an
increase of 200,000 barrels.
That’s it for this
week!
Regards,
George Murphy
Twitter
@GeorgeMurphyOil
Hi to all,
Here’s what I have
for this week’s price changes:
*Heating and stove
oil to drop by 1.2 cents a litre.
*Diesel fuel to
drop by 1.3 cents a litre, and...
*Gasoline shows a
drop of 8/10ths of a cent per litre.
Market highlights
U.S-China talks
Speculators remain
skittish over the possibility of the U.S and China reaching a settlement in
their trade dispute when talks resume again on Thursday.
The U.S has blacklisted more Chinese companies from doing business within U.S
borders which may throw another wrench into things.
The 28 companies were blacklisted for alleged human rights violations. The week
previous was with optimism that a deal would be reached with Chinese officials
expressing remorse that a better deal couldn’t be reached, but they would sign
what was presented up to this point.
US EIA revises oil
price forecast lower
The United States
Energy Information Administration revised its Short term Energy Outlook (STEO)
lower from what was forecast just a month ago citing the world economy and a
strong building of world oil inventories as we get closer to 2020.
Brent prices were forecast to be $5 a barrel lower than the $63 U.S that was forecast
just in early September, with Brent dropping to $57 a barrel U.S in 2020. As
far as I can read in the report, it doesn’t take into account rising
geo-political risk such as that resulting in a production disruption in Saudi
Arabia three weeks ago.
U.S inventory
report
The latest report
shows more refinery facilities have shut down for annual winter maintenance as
refinery capacity was reported down to 86.4 percent.
Crude inventories gained as oil throughputs halted and stocks built as a
result.
Gasoline inventories dipped by 200,000 barrels while distillates dropped 2.4
million barrels.
U.S domestic production of crude dropped 100,000 barrels to sit at 12.4 million
barrels a day.
That’s it for this
week!
Regards,
George Murphy
Twitter
@GeorgeMurphyOil
Hi to all,
Here’s what I have
for this week’s price changes:
*Heating and stove
oils to decrease by 2.6 cents a litre.
*Diesel to decrease
by 2.4 cents a litre, and...
*Gasoline shows a
drop of 1.6 cents a litre.
Market highlights
Saudi Arabia
recovery continues
Saudi Arabian oil
infrastructure continues to recover after attacks by drones and cruise missiles
took 5.7 million barrels a day of production capacity offline.
The
outages briefly took oil prices close to $70 US a barrel before retreating to
todays close below $60 US.
Refined prices also increased to consumers, but with this week’s drop in
prices, should come close to what they were previous to the attacks.
Saudi Arabia has announced that oil infrastructure will be ready for full
production again by the start of November, and indeed, some are reporting that
Aramco, the Saudi Arabian oil company has already reached pre-attack output of
9.9 million barrels a day.
But really...
Put this in the perspective of an attack against Saudi infrastructure twenty years ago.
With U.S domestic production of 5.8 million barrels a day then as compared to 12.5 million barrels a day just last week, it shouldn't be a wonder why oil prices never hit the roof. That, and the advent of other alternative energies that simply weren't "commercial enough" as what they are today, like solar and wind, have woken up some to the possibility that oil finally has competition.
If there's any warning there for "Big Oil" from this attack, it's simply that they had better find more secure fields in "secure and stable" countries if oil is to survive as viable. Price matters, and the fact that solar and wind potential exists worldwide simply has shown that an attack against Saudi infrastructure to raise oil prices simply won't do it. There was a lot more at stake with the speed of the repairs than just to bring oil back online.
A lot more could have been lost than just market share.
World reserves
In the event of
outages, it seems the world was prepared for the worst.
According to the International Energy Agency, world stocks of oil on government
oil reserves like the US strategic reserve, amounted to 1.5 billion barrels,
while private industrial-owned reserves totaled 2.5 billion barrels.
These amounts do not include pooled reserves and discovered fields that have
been left untapped, or facilities that have been shut down due to price or
oversupply.
There’s plenty out there!
U.S inventories
US crude oil
inventories posted another gain last week as the Energy Information
Administration said stocks increased by 2.4 million barrels.
Gasoline stocks gained 500,000 barrels while distillates dropped 300,000
barrels as colder weather prospects increased demand there and gasoline demand
tapered down.
Refinery capacity was recorded at 89.8 percent as refiners continued fall
maintenance programs.
That’s it for this
week!
Regards,
George Murphy
Twitter
@GeorgeMurphyOil
Hi to all,
Here’s what I have
for this week’s price changes:
*Heating and stove
oils to increase by 3.1 cents a litre.
*Diesel fuel to
increase by 2.9 cents a litre, and...
*Gasoline to
increase by 2.4 cents a litre.
Market highlights
Aftermath of Saudi
attacks
Markets continued
to rise sharply as continuing disruptions in Saudi Arabian oil production
continued to play in the markets.
Initial reports indicated that 5.7 million barrels of daily production was
knocked offline. As this weeks session continued, it appeared, at least by
Saudi reports, that the damage was “easily repaired” and that full production
of upwards of 12 million barrels a day would be available by December, with 5.7
million lost production to be back online by the start of November.
Talks
of returning quickly to full production started a slow retreat in oil that
still supported my predicted increases in refined product prices for this week.
Oil prices, along with refined product prices, continued to decline as Iran
sent signals that it would be ready to make changes to the 2016 nuclear
agreement in exchange for the lifting of some sanctions that have hurt Iran and
its economy. That, combined with Saudi Arabia’s return to full production
helped turn oil prices lower in the session.
As a side note, Houthis rebels from Yemen are also making peace overtures that
have made an uneasy peace in the Middle East in recent days, while at the U.N, Britain,
France and Germany all pointed the accusing finger at Iran for the attacks.
Numbers are showing a slow, gradual retreat for gasoline prices, but still show
some support for distillate prices like heating, stove oil and diesel fuel.
U.S inventory data
The latest report
from the U.S Energy Information Administration shows that 1.1 million barrels
of crude was added to current supplies, while gasoline and distillates also
showed gains in inventory.
Gasoline gained 800,000 barrels while distillates increased 400,000 barrels.
Refiner capacity was recorded at 91.1 percent as some refiners started Fall
maintenance programs.
U.S domestic production was reported at 12.4 million barrels a day.
That’s it for this
week!
Regards,
George Murphy
Twitter
@GeorgeMurphyOil
Hi to all,
Here’s what I have
for this week’s price changes in what has been one of the most remarkable weeks
I’ve seen in oil in a very long time!
*Heating and stove
oil shows an increase of 1.3 cents a litre.
*Diesel fuel shows
an increase of 1.6 cents a litre, and...
*Gasoline shows a
DROP of one cent.
Market highlights
It’s all Saudi
Arabia and Iran folks!
Attacks against the
Abqaiq production facility and the Khurais oil field were successful in
knocking out 5.7 million barrels of production out of 9.8 million that was
online.
The
Saudi’s have almost 12 million barrels a day of processing at its fingertips
that was already shut down and mothballed because of OPEC cuts. Surprisingly,
the cut to production has not affected fuel prices as much as was first thought
they would be.
While important infrastructure is already well on its way to returning to
normal, the Saudi’s are saying by the start of November before capacity is back
to the original 12 million barrels of production a day. Some of that was already
in mothball as a result of past production cuts.
UN investigators are said to be on the way to investigate the damage to Saudi
facilities, and that itself may be enough to dissuade the U.S from taking any
preliminary action or military intervention with Iran, who are being blamed by
the U.S for the attacks.
Houthi from Yemen have claimed responsibility and promised in a statement
yesterday that more attacks are imminent, so, we may not be out of the woods on
this situation yet.
Local effect
As regards to what
NL consumers will see this week and next is probably all going to be determined
by market factors over the next week. Projections are panning out a little
lower than forecast a day ago. Right now, numbers are showing possible
increases right across the board of 2.3 for heating, 1.8 on Diesel and 2.2 up
for gasoline as a result of elevated spot prices.
Hopefully, with any retreat in oil and refined product prices the next couple
of days, these projections will turn around and show a drop in prices rather
than any possible increase to consumers!
That’s it for this
week!
Regards,
George Murphy
Twitter
@GeorgeMurphyOil
Hi to all,
Here’s what I have
for this week’s price changes:
*Heating and stove
oils show 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 30th.
That’s it for this
week!
Regards,
George Murphy
Twitter
@GeorgeMurphyOil
Hi to all,
Here’s what I have
for this week’s price changes:
*Heating and stove
oils show 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 15th. 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
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 15th,
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
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
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
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
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
