Last week has been volatile for energy prices. WTI crude oil fluctuated from 51.50 USD/barrel on Wednesday to the week’s closing price of 53.15 USD/barrel.
Amongst the news having retained our attention:
OPEC members and Russia are 80% of the way to cutting the targeted 1.8 million barrels a day, according to a meeting in Vienna over the weekend. They expect to hit the goal next month and have established a way to monitor production level. On a monthly basis, a comity will validate production levels.
Data form China indicates that oil refineries boosted processing to a record last month before clean fuel standards went into effect at the beginning of the New Year. Evidence of this is the China Private Refiners Survey which showed reduced operating rates for the third consecutive week.
Crude oil inventory levels, as published last Thursday by the Energy Information Administration reflected an increase of 2.35 million barrels. The agency has also revised anticipated world demand to 97.8M bpd versus 97.6M bpd prior.
Last week, the Bank of Canada has maintained its reference rate à 0.50% and has stated than potential further rate cuts are not off the table. Following this release, the Canadian dollar has depreciated and this has affected diesel prices in CAD/L.
We invite our clients to contact us in order to review your energy hedging strategies in CAD/L.
