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Tuesday, October 21, 2014

Numbers for Thursday, October 23, 2014

Hi everyone,

Here's what I have for this week's price changes.

Not too much to report here, but refined commodities prices still remain low on the MYMEX for the week, albeit not as low as what one would have expected, considering the slight rebound in overall crude oil prices. Futures prices remain a rough 12 cents a US gallon lower than spot pricing that I track, so there's still an "unknown" amount coming down the pipes somewhere yet to come.

Heating and stove oils show a drop of 1.53 cents a litre on the way.
Diesel shows down by a penny, and..
Gasoline is down just 8/10ths of a cent on a litre.

It's still up in the air on exactly how much oil will still drop, or if it is going to drop further. Some improvement over China manufacturing numbers helped to support oil prices the last two days, but the economic situation in the European Union still remains at question. Add to this the latest EIA inventory report tomorrow. If there's a draw of oil against US inventory, look for West Texas prices to increase. The same would go for refined commodity prices. My "fear" is that consumers saw cheaper prices overall at the pumps the last week or so, and probably consumed enough to cause a kick-back in inventories this week.

We'll see what happens around 12 noon Wednesday, see if this string of price drops continues!


George Murphy
Twitter @GeorgeMurphyMHA 

Tuesday, October 14, 2014

Numbers for Thursday, October 16, 2014

As promised, the final numbers for Thursday's price changes:

Again, keep in mind that heating and diesel numbers may be off because of the winter blending of fuels!

Heating and stove oils to drop by 2.56 cents a litre.
Diesel to drop by 2.7 cents a litre, and...
Gasoline to drop by 6.8 cents a litre.

These numbers are very volatile, but downwards!

OPEC may not cut, but will probably end up competing against each other for market share. That may cause them to split. Venezuela is wanting a meeting to institute cuts to help support its own treasury, but others such as Algeria are not agreeable to those cuts and would rather ride out the storm. It's interesting to watch!

In the meantime, US domestic production is again playing a huge role with the EIA again measuring production reaching 8.83 million barrels a day. I saw figures last week measuring output at 9.01 million barrels. The truth probably lies in the middle somewhere.

While all that goes on, expect prices to continue to decline to the consumer over the next week at least! I'll keep you up to date!

Pass the word everyone! Prices are going down!


George Murphy
Twitter @GeorgeMurphyMHA

Timing is everything...

Whenever I get the chance to speak in the House of Assembly, I do. I do it with gusto, passion and my constituents in mind.

Such was the case when I rose in the House to speak to the budget in 2012. The occasion was to debate government's notion to budget oil at $112 US a barrel.

I remember it well, although in the debate, it was only afterwards you realize that sometimes timing is everything, and that even my own timelines can be set off somewhat. I worried that day over the huge expanse of US domestic production and what it could mean for the province if it kept on the path of budgeting based on future oil output and pricing projections.

It would potentially cost us dearly...

Now, mind you, any government can budget around those numbers and the expectations of the oil markets, but to maintain spending at those levels may be foolhardy. Services like healthcare are still in growing need, schools still need to be replaced and roads built. Expectations are still there...

I argued that day what was starting to happen: that US domestic production of oil was fast increasing to the point that OPEC influence on price would be affected and that we may not see the trend until it hit us where it hurts. My "game day" scenario saw us not budgeting on anything over $100 US a barrel.

In the Muskrat Falls debate later that year in December also saw me using the same points, that we would be better off realizing that the slow climb to Nalcor's $145 US a barrel would be a pipe dream. I argued the case for natural gas onshore for electrical generation, taking stranded gas offshore, and using that also as a source of revenue. Others were shipping and exporting LNG, so why not us, and generate needed electricity as well at the same time?

Again in 2013 budget debate, I argued that Brent should be priced between $95 and $100 US for the fiscal year ending in March. Not a cent above, because of the same US domestic production figures that would affect the markets. US domestic would affect the markets so much, and so much oil would be available, that the price of Brent would be dragged to a lower selling point...

Now it has come to fruition, and there's not a darn thing even OPEC can do about it.  If they cut output, they deprive their citizens of revenue and work. They run the risk of further Middle East instability with OPEC stability itself at question.

Countries worldwide have their own domestic supplies spelled out for them in deep underground shale reserves, and the final arbiter to future prices may be about to speak in the form of China and India. For recently, I think it was back in March of 2012, China entered into an exploration and development agreement with Royal Dutch Shell to develop it's own shale reserves. If you consider that the present US shale explosion only started in 2005, there may be very little time to keep China as a customer for oil and to keep it as an important measure in determining what's left of theories expounding world oil prices. For if China does develop both oil and gas reserves, it would also have broken part of its own dependency on Russia and others from OPEC countries for its important energy needs, and that important factor in "supporting" oil prices removes itself from the markets. And at development costs that range $19US per well, how can they say no?

I'll give China five years to come on-stream.

The same can be said for India, who sit on massive natural shale gas reserves in their northeast region...

Nothing like "self-sufficiency" and a chance at breaking OPEC dependency!...

Are witnessing the death of high oil prices? Other factors have yet to play in the face of the present glut of product. Things like shutting down exploration and development of present finds, changing geo-political situations or economic slowdowns that have yet to play through.

What you're witnessing, as far as I'm concerned, is Big Oil getting a dose of reality; that others outside can now call the shot and determine what prices are good for economic development and consumers alike. It's something that's been missing from the markets since OPEC formed all those years ago, and a lesson that OPEC won't soon forget! Competition...

Nor should we forget.

Just don't lose sight that we're still going to need to develop alternate sources of energy that can completely remove us from fossil fuels. Just because we don't have to pay higher price for oil for a time to come doesn't mean we should lose sight of that. We need alternatives more than ever...

I'll be back later tonight with a post with this Thursday's price changes. Look for all numbers to be down!


George Murphy
Twitter @GeorgeMurphyMHA

Tuesday, October 07, 2014

Hold off! Numbers for Thursday, October 9, 2014

Here they are, the numbers for Thursday with all the data in...

Again, just a reminder that the heating oil and Diesel numbers may be off somewhat because of winter blending that I can't track, so use those numbers as a rough indicator only!

Heating and stove oils show a drop of 1.3 cents a litre.
Diesel shows a drop of 1.8 cents a litre, and...
Gasoline shows a drop of 5.2 cents a litre.

Futures numbers are based on delivery of refined goods 45 days from now. If I go by those, there's still considerable downwards pressure in the next couple of weeks for fuels, but particularly gasoline prices. Futures numbers there traded today around $2.36 a US gallon. If I convert that to Canadian values, it could mean another 5.6 cents a litre yet to come to your pockets...IF all goes accordingly...

Keep conserving everywhere, and we can all make a bigger impact here!

Brent crude closed today at $91.73 US a barrel.

I'm keeping an eye out for anything else that might transpire in the coming days, but that drop in gasoline looks pretty good, especially with more on the way if all holds true...

Feel free to pass this one along to everyone!...Everywhere!


George Murphy
Twitter @GeorgeMurphyMHA

Tuesday, September 30, 2014

Numbers for Thursday price changes

Hello to everyone,

Here's what I have for this Thursday's price changes:
Heating and stove oils expected to rise by 1.25 cents a litre.
Diesel expected to rise by 9/10ths of a cent, and...
Gasoline shows an added 3.4 cents a litre.

*Note that I believe it is this Thursday where the winter blend for heating and Diesel fuels comes into effect, so the numbers for those fuels may be slightly off as a result of the new blend. Use those numbers as a rough indicator only.

The markets were a little choppy this last period with everything from sell-offs of oil interests to refinery shut-downs in the US northeast and eastern Canada. That's why we're looking at a sharp jump in gasoline prices this week, along with some of the distillate fuels. That, and the other downside factor of the strength in the US dollar. Because there's such insecurity over world markets still, and slow worldwide economic recovery (if any) outside the US, their dollar has been gaining an awful lot of strength against the Canuck Buck. We've lost 1.2 cents against the US dollar just this last week!

On the positive end, I don't expect those prices to stick for next week. Already, the markets are starting to take notice of an impending glut in the worldwide markets and that has sent all crude oil prices to the downside that consumers should start to notice shortly.

The sharp increase to Libyan production this last week, all in spite of some unrest there has sent Brent prices down. Speculators, especially those selling hedge funds into those markets, have been pulling out from their long positions now that the writing is on the wall as regards to an abundance of crude out there. US domestic production has hit another record with the EIA estimating overall US numbers hitting close on 8.9 million barrels a day.

I'll leave it at that, but right now, speculators are now betting on lower oil!

Feel free to share this!


George Murphy
Twitter @GeorgeMurphyMHA

Tuesday, September 23, 2014

Price changes for Thursday, September 25, 2014

Hello everyone,

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

Heating and stove oils show a drop of 1.18 cents a litre.
Diesel fuel is expected to drop by 1.6 cents a litre,and...
Gasoline showing a small increase of 8/10ths of a cent a litre.

The amazing strength of the US dollar has probably come about as the result of the weakness of the overall world economy. With consumer demand remaining "lackluster", it would be good reason for investors to start placing their faith in the strongest of currencies.

Until such a time as any signs of world economic activity picking up, expect commodities like oil and gold to continue to show weakness.

How long can that be expected remains a question in itself though, and perhaps a topic I'll pick up on another time!

That's it for this week!


Twitter @GeorgeMurphyMHA 

Tuesday, September 16, 2014

Price changes for Thursday, September 18, 2014

Hello everyone;

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

Heating and stove oils expected to drop by 1.48 cents a litre.
Diesel to drop by 1.5 cents a litre, and...
Gasoline to drop by 2.2 cents a litre.

Crude oil rose for the first time in two weeks as OPEC's secretary Abdulla El-Badri speculated that producers within the organization may institute production cuts at its next meeting in Vienna in November. The Saudi Arabian oil minister, Ali Al-Naimi however said just last week that there was no need for any production cut as he expects oil demand to pick up later this fall as demand for heating oil picks up to meet expected colder weather.

Other than that this week, a cut to world oil demand was expected in the next year by the International Energy Agency. No doubt, consumers are still upset with elevated prices and demand for fuels such as gasoline and distillates remains flat. Huge numbers in increases in US domestic production will continue to influence oil prices ahead of what OPEC may do. In spite of OPEC's talk about a possible production cut, I don't expect to see an increase anytime soon to all fuels as a result of the availability of oil product.

That's it for this week! Feel free to pass this note around!


George Murphy
Twitter @GeorgeMurphyMHA

Tuesday, September 09, 2014

Numbers for Thursday, September 11, 2014

Hi to all,

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

Nothing major this week, next to the fact that Brent crude is slipping further due to lower China manufacturing numbers and a not-so-steady ceasefire in the Ukraine. Lower than expected growth numbers in GDP amongst European Union countries also has the European markets worried over another dip into another Eurozone crisis.

Heating and stove oils can expect a 7/10ths of a cent a litre drop.
Diesel fuel shows a drop of just a half penny, and…
Gasoline shows an added 3/10ths of a cent a litre.

Margin for error +/-3/10ths of a cent.

The Canadian dollar also finished slightly lower against the US greenback, finishing this pricing session at $1.1012 against its southern neighbor. Inventories there last week reported a drop of 900K barrels of crude oil and 2.3 million barrels of gasoline due to a turnaround of refinery runs to distillate fuels.

Distillate fuels that include heating, stove oils and diesel showed an increase of just 600K barrels.

In case you’re all still following the Muskrat issue, here’s an interesting one from the EIA that speaks about over 4300 megawatts of added electricity capacity to the grid recently. That’s in the first half of 2014…

That’s it for this week!


George Murphy
Twitter @GeorgeMurphyMHA