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Tuesday, March 24, 2015

Price changes for Thursday, March 26, 2015

Hi to all,

In what was a sleeper of a week on the markets, very little of anything was happening, including moves to any prices. I can't remember the last time they moved as little as this. But here they are:

Heating and stove oils to drop an even penny.
Diesel prices down by 1.6 cents a litre, and...
Gasoline up just 9/10ths of a cent.

All eyes focused on the challenges that are coming to US storage capacity this week as the oil markets are struggling with the fact that US domestic production has literally taken up available storage space, just another reason why analysts are talking about another possible slide in prices to come. It is estimated that, if production maintains itself and export and consumption of oil don't weigh in, we could be looking at all capacity taken up in the Cushing, Oklahoma storage and pricing facility. Some are predicting that prices could bottom out at $20 US a barrel if that happens!

The second possible threat to lower oil prices comes from what are called "teapot" producers out of Russia, who are faced with crude oil runs and nowhere to export except markets that compete with OPEC. Interestingly, Russian exports add another 800K barrels a day to worldwide production, adding to the glut.

There's lot's of downward fundamentals playing on oil, but the only upside to any increase in oil prices lately has been the thought that the US will soon begin to raise interest rates. Speculation over any increase in rates has dropped the US dollar against the Canadian dollar in the last few days. Speculators have been adding oil and gold to their portfolio's in answer to any possible rate increase.

The Canadian dollar has increased against its US counterpart by close on 2.5 cents this last week as a result, almost negating any price increases to refined product prices as a result.
That's it for this week!

...and I said nothing was happening!

Regards,

George Murphy
Twitter @GeorgeMurphyMHA

Tuesday, March 17, 2015

Price changes for Thursday, March 19, 2015

..and here's the final numbers for Thursday's price changes:

Heating and stove oils show a drop of 4.65 cents a litre.
Diesel shows down by 5.6 cents a litre, and...
Gasoline shows a drop of 3 cents even.

Just a quick note here on winter pricing that throws the Heating and Diesel numbers out of kilter sometimes. I usually tell everyone that these numbers can be used as just a "guide" on which direction prices will be going due to the use of "anti-freeze" agents such as kerosene and jet fuels in the various blends. That usually carries until the end of April month.

In other news, the US may be running out of storage room. They're actually pumping that much, they expect to see the coffers filled by June month if production keeps growing from domestic sources. That could sell trouble for oil prices. No sense producing if you can't store the stuff, let alone sell it.

I'll leave it at that for now. I'm going to be watching the US inventory data tomorrow when it is released. It should be an interesting play tomorrow as we get to see if stocks will still show an increase to crude oil reserves that will probably keep those oil prices low.

Feel free to pass this note on!

Regards,

George Murphy
Twitter @GeorgeMurphyMHA

Tuesday, March 10, 2015

Update #2: Final numbers for Thursday price changes

Final numbers for Thursday price changes...

Here's what I have for price changes for this Thursday. After today's drop, it all added up to just a little bit more...

Heating and stove oils to drop by 7.42 cents a litre.
Diesel to drop by 10.1 cents, and...
Gasoline shows a drop of 2.2 cents a litre.

It was great to see a return of distillate prices to something of the norm before the run-up last week. Unfortunately, prices dropped a little later than predicted, but they're still showing in this week's numbers instead.

Prices dropped further today as speculators pulled out of the distillate markets, the reason being that refiner capacity is almost back to normal with just 690,000 barrels a day offline south of the border. it's also the simple fact that things are going to start to warm up now as we get back towards spring. It was time to get out.

Gasoline, not so much, although tomorrow's inventory numbers may reflect the reality that "demand" is simply not there. That may be enough to keep gas prices from starting further down, but I'm keeping a close eye to the usual excuse used as we get closer to the "summer demand" seasonal run-up as we get closer to May month's traditional start to the driving season.

That's it for this week!

George Murphy
Twitter @GeorgeMurphyMHA 

Monday, March 09, 2015

Update #1: Numbers for Thursday, March 12, 2015

If you're a Heating, stove oil or Diesel fuel user and you subscribe to this blog, you might appreciate this one. I figured that I would give all notice of a good retreat in prices so you can call the shot on your delivery this week! This is the notice I posted to my Facebook page:

Six days out of seven and here's your update from the markets so far. One day to go...

Remember last week I was telling all that we should start to see some steep discounting to the distillate fuels, that they should be returning back to the start of the run-up in pricing?

Looks to be true...

So far, here's what I have...

Heating and stove oils are pointing to a drop by 7.03 cents a litre for Thursday.
Diesel shows a drop of 9.9 cents a litre at the pumps, and...
Gasoline shows just a two cent a litre drop.

Remember that we're still going to be affected by the winter blending mix, so Heating and Diesel numbers may be off slightly. Gas as well wasn't hit too hard by the run-up in prices, but was still affected. That's why it isn't down as much as the distillate fuels, so, if you hang off for a couple of more days, you'll save a small fortune at the heating and Diesel levels...

Pass this on and give all a heads up on this one. I'll be back tomorrow night with the final numbers.

Regards,

George
Twitter @GeorgeMurphyMHA 

Tuesday, March 03, 2015

Numbers for Thursday, March 5, 2015

Final numbers for Thursday, March 5th are in. Here's what I have for this week's price changes:

Heating and stove oils to drop by 1.34 cents a litre.
Diesel shows an added 3.7 cents a litre, and...
Gasoline shows an added 4.5 cents a litre.

I can't say that I'm not surprised that heating and stove oils didn't show more of a retreat than they are here. What I am surprised about is that the drops didn't start to hit the numbers until two days ago when they should have affected those fuels immediately after last Wednesday when they first showed a retreat!
With both Diesel and Gasoline taking a hit again this week because of scattered refinery outages in the US northeast and ongoing labour disputes, we shouldn't be surprised to find speculators taking advantage of "shortfalls" in production...all in spite of plenty of product on hand.

All Canadians should be asking themselves why we have to be so dependent upon the US markets for the pricing of a product that we produce so readily in this country. Is it time for a "Made in Canada" price to all our oil and refined commodity prices?

In the meantime, with oil showing some signs of "life" in the markets, keep your eyes to a return of smaller producers to the markets as crude prices again may make it affordable for the same small producers to enter back into the markets. My theory is that oil prices may remain low as smaller companies put product back into the markets, again weighing heavily on OPEC finances and influence.

That's it for this week! feel free to share this and "see you at the pumps!"

Regards,

George Murphy
Twitter @GeorgeMurphyMHA

Tuesday, February 24, 2015

Price changes for Thursday, February 26, 2015

Updated numbers for Thursday, February 26th price changes:

Heating and stove oils to add 4.08 cents a litre.
Diesel fuel to add 6.4 cents a litre, and...
Gasoline to add 1.4 cents a litre.

If there's any good news out of this, it's that after today's trading, we should be back at seeing a drop in prices to diesel and heating oils next week. Spot prices returned today to "pre-runup" levels. They retreated today by about 25 cents a US gallon. I guess the speculators decided to get out before the latest word on inventories building tomorrow.

If you have enough to go it until next week, then you might want to hold off until then. You're also a little better off if you got the phone-call in before the price is due to increase midnight tomorrow.

The Canadian dollar mostly held steady as compared to the previous session. Last week also saw the total rig count remain mostly steady, which leads me to believe that smaller producers are seeing a flattening out of prices and are getting set to "explore" again. I'll keep watching that one.

Anyway, word is to hold off again for another week if you can at all do it to see what happens with the "retreat" next week.

Pass the word!

Regards,

George Murphy
Twitter @GeorgeMurphyMHA

Tuesday, February 17, 2015

Price changes for Thursday, February 19, 2015

Final numbers are in for this week, and yes, increases across the board again.
Here's what I have:

Heating and stove oils show an added 3.49 cents a litre.
Diesel shows up by 4.4 cents a litre, and...
Gasoline shows another increase, by 2.6 cents a litre.

Libyan production is almost shut in again with revolution there the order of the day. That's helped increase Brent crude prices almost $7 US a barrel this week alone, and since the last price setting.
West Texas Intermediate prices are up as well, this time by $4 US as rigs come off-line from the fracking fields. There's been a steady drop in drilling over the past couple of weeks. However, keep in mind that a lot of these wells have already been drilled and are producing, so, I would expect to see continued building of overall US domestic production.

What has helped increase oil prices are some worldwide disruptions in production, in particular Libya, but also some drop in OPEC production, but only slightly. I'll have a look at the latest US inventory reports either tomorrow or Thursday when they are next published.

Keep an eye to the oil markets tomorrow (Wednesday) and see if traders are also thinking of the possibility of the US reporting further inventory building this last week!

A last point: It seems US producers are going to have another problem. Simple really, but it seems that they're actually starting to run out of room to put their oil once they get it out of the ground. It's a problem that most OPEC countries have had in a while. OPEC producers reportedly have close on 130 million barrels in "floating storage" right now. The US projection is for them to have all available storage space to be taken up as of the end of June.

We're not quite out of the woods with oil prices yet...

That's it for now!

Regards,

George Murphy
Twitter @GeorgeMurphyMHA