Last week was notable for a drop in energy prices. WTI crude, Brent crude and diesel closed the week down 6.72%, 6.19% and 5.85%, respectively.
- Data released by the U.S. Department of Energy on Wednesday showed a significant increase in oil inventories. The market had expected a figure of 825K barrels, but the actual indicator was 2,276K barrels. This caused a slump in oil prices.
- Vladimir Putin, President of Russia, supports an agreement between Russia and OPEC on production quotas. These comments come in anticipation of the OPEC meeting in Algeria later this month (September 26th).
- Nigeria’s oil production in August fell to 1.24 million barrels/day compared to 1.28 million barrels/day in July. The companies appear to be having problems bringing their pipelines in the Niger Delta back into service.
- On Friday, the market reacted to the release of U.S. job creation figures: 151,000 jobs were created compared to market expectations of 180,000 new jobs. The market took this news to mean a reduced likelihood of a rate hike in the U.S. As a result, the U.S. dollar lost ground against other currencies in trading on Friday, while the price of oil rose.
While the price of diesel in CAD/litre declined ~3 cents, last week’s volatility allowed many of our clients to place orders and implement hedges at attractive prices. We encourage our clients to call us to discuss strategies for hedging fuel in CAD/litre and potential new orders.
Have a great week!