If heating oil prices are coming down, why are petrol, gas and electricity prices still rising?

The answer lies in the fact that these fuels are driven by different market forces.

Heating Oil Prices React Faster

Heating oil is a globally traded oil product, and prices can move quickly when supply concerns ease. Following the recent de-escalation of tensions in the Middle East, some of the "risk premium" that pushed oil prices sharply higher earlier this year has started to unwind. A stronger pound has also helped reduce the cost of imported fuel for UK suppliers.

As a result, wholesale heating oil prices have fallen significantly from their spring highs, providing welcome relief for households that rely on oil heating.

Petrol Prices Remain Under Pressure

While petrol is also linked to crude oil, forecourt prices are influenced by refining costs, fuel duty, distribution costs and retailer margins. Any reduction in wholesale oil prices can take time to work its way through the supply chain.

Global uncertainty also means oil markets remain sensitive to geopolitical developments, which can keep petrol prices elevated even when heating oil prices are easing.

Why Gas and Electricity Are Different

Gas and electricity prices are affected by a much wider range of factors than heating oil.

In the UK, gas prices continue to play a major role in determining electricity prices because gas-fired power stations are often used to meet peak demand. This means electricity costs can remain high even when renewable generation is increasing.

Recent increases in wholesale gas prices, combined with network costs, infrastructure investment and energy policy charges, have placed upward pressure on household energy bills. Industry analysts have recently forecast higher energy costs for many customers on standard tariffs.

The Outlook

The good news for heating oil users is that the market is currently moving in the right direction. While no one can predict future prices with certainty, recent falls suggest that some of the extreme pressures seen earlier this year are beginning to ease.

At Goff Petroleum, we continue to monitor global energy markets closely and work hard to offer competitive pricing, reliable deliveries and straightforward advice to help customers make informed decisions about when to order.

As always, if you need advice on current market conditions or would like a quote, our team is here to help.

Easter Opening Hours

Good Friday 3rd April                 Closed

Saturday 4^th April                    8-4.30

Easter Sunday 5^th April              Closed

Bank Holiday Mon 6 April             Closed

The UK Government has announced new financial support for households that rely on heating oil, offering extra help to rural and off-grid communities as they manage increasing energy bills.

“We are going to support rural communities with the cost of heating oil… £53m for households that are most exposed.”
Sir Keir Starmer, Prime Minister

What has been announced:

£53 million support package to support households facing higher heating oil costs. 

The support, which you can read in full here, will be targeted at low-income households in rural communities affected by the recent surge in energy prices. 

Funding will be allocated across the UK as follows:

England: £27 million

Northern Ireland: £17 million

Scotland: £4.6 million

Wales: £3.8 million

Support for rural and off-grid homes

This funding is designed to help households that aren’t connected to the gas grid—many of which rely on heating oil to keep their homes warm and provide hot water.

Support delivered locally

In England, the funding will be distributed by local councils through the Crisis and Resilience Fund, launching on 1 April. Your local authority will share details soon on how to apply.

In Scotland, Wales and Northern Ireland, funding will be provided to devolved governments, with the aim of supporting vulnerable households in off-grid communities.

We’ll keep you updated

As more information becomes available about the government’s support package, we’ll continue to share updates so you know what help you may be able to access.

Heating oil prices are influenced by global energy markets, and we’ll keep a close eye on changes to help keep you informed.

Stay informed

More guidance on who is eligible and how the funding will be distributed is expected soon. Keeping up to date will help make sure you don’t miss out on any support.

Plan ahead for your heating oil

Prices can change in response to global events, so it’s a good idea to plan your deliveries in advance and keep an eye on your tank levels. This can help you avoid last-minute orders.

Keep an eye on market updates energy markets can shift quickly. We’ll continue to share updates to help you understand how changes may affect heating oil prices.

Recent developments in the Middle East have created significant volatility across global oil markets, particularly for refined fuel products such as heating oil.

One key product affected is jet kerosene. While commonly used as aviation fuel, it is also closely linked to heating oil markets in the UK and Ireland. Prices for jet kerosene have risen sharply in recent weeks, which is having a direct impact on heating oil prices.

Why Are Prices Rising So Quickly?

Since the start of 2026, prices for refined fuels have increased much faster than crude oil prices:

• Jet Kerosene: +119%

• Brent Crude Oil: +52%

• Diesel: +30%

More recently, between 25 February and 6 March, jet kerosene prices surged by over 87%, far outpacing other fuel markets.

Heating oil and jet fuel are produced from the same stage of the refining process. Because of this, when jet fuel prices spike, heating oil prices are typically pushed higher as well.

What’s Causing the Price Spike?

Several global factors are tightening supply and contributing to rising prices:

1. Disruption to Middle East Supply Routes

Some refined fuel shipments passing through the Strait of Hormuz have been disrupted. This route is one of the most important global shipping lanes for fuel supplies.

2. Strong Demand for Jet Fuel

Air travel has rebounded strongly following the pandemic, leading to increased demand from airlines and significantly higher consumption of jet fuel.

3. Reduced Refining Capacity in Europe

Two UK refineries closed during 2025, reducing the region’s ability to produce refined fuels such as heating oil and jet fuel.

4. Lower Exports from Major Suppliers

China has limited refined fuel exports due to domestic supply concerns, while Indian refineries are facing tighter crude supply, further reducing global export availability.

Together, these factors are tightening the supply of refined fuels across Europe.

Why Crude Oil Prices Haven’t Risen as Much

While refined fuel prices have surged, crude oil prices have increased more gradually.

This is largely because:

• The United States and other OECD countries maintain large strategic crude oil reserves.

• These reserves can be released during supply disruptions to help stabilise the market.

• Global crude supply was already slightly oversupplied at the start of 2026.

However, refined products like heating oil depend on refinery output, which cannot increase as quickly.

Tight Supplies of Jet Fuel

One important market indicator traders monitor is “days of supply cover” — the number of days current fuel stocks could meet demand.

Recent figures show:

• Crude Oil: 43 days of supply

• Jet Fuel / Heating Oil: 24 days of supply

Lower stock levels mean jet fuel markets react much more quickly to supply disruptions, which is contributing to the recent price volatility.

What This Means for Heating Oil Customers

Because heating oil prices are closely linked to jet fuel markets, prices may remain highly volatile in the short term.

If your tank levels are running low, it may be worth ordering sooner rather than later to secure current pricing and ensure delivery availability.

At Goff we work on a just-in-time delivery basis, usually holding 1 to 2 days stock of fuel. However, due to higher demand in the weeks leading up to the actions in the Gulf we were in a negative stock position by 3 days. Therefore receiving 6 days’ worth of orders over the War Weekend put us in an extremely exposed position.

This position was made worse by a week-long refinery shutdown by one of our key suppliers, severe allocation restrictions by other refineries, the closure of forward purchasing opportunities and the diversion of home heating oil into the aviation market. This week has seen an improvement of supply, although it is still severely restricted.

Now that we have been able to purchase fuel to cover outstanding orders, we feel more comfortable. Therefore, far from profiteering from this situation, we will be honouring orders at a substantial loss.

We are a fourth generation family business that has worked hard to build a loyal customer base, and are grateful to you for your support in these difficult times.

We reiterate that we have never cancelled an order but were very worried that for the first week after the war started simply didn’t have fuel to cover the orders placed. Wholesale kerosene has more than doubled in price since the war began, and no one knows how long this will last.

Please, monitor your tank and don’t make a panic purchase.

If practical buy smaller amounts more regularly, and if in doubt call us, we are always here to support you.

This has been an extremely difficult fortnight, with our staff receiving a great deal of abuse, and we are truly grateful to them for their resilience, good humour and loyalty.

Rest assured, we are working tirelessly on your behalf.

13 March 2026

Thank you for your patience over the past few days. We are very aware that the volatility in wholesale oil prices caused by the speed and scale of the unprecedented events currently unfolding in Iran and the Gulf, and the impact of our earlier communications has, understandably, caused frustration and concern. We’re genuinely sorry for this.

We work on a just in time delivery basis usually holding 1 to 2 days stock. Last week we experienced further stock shortages due to a refinery shut-down and our suppliers restricting volumes. This week we find ourselves in a better stock position.

As we value your custom enormously, we’ve chosen to take steps that support you even though they involve a significant cost to us, and we will be honouring your order, despite the wholesale price of fuel to us more than doubling. Maintaining your trust is extremely important to everyone at Goff.

Therefore, we’ve decided to take the steps outlined below in respect of all orders which were placed on the following dates:

• Saturday 28 February.

• Sunday, 1 March; and

• Monday 2 March.
   

If you agreed to put your order on hold, delaying delivery until wholesale prices dropped

If you placed an order and chose to keep it open pending a drop in wholesale prices, we’ll now honour your original order at the price you paid. Delivery will take place within the next 10 days.

If you have already paid we will do this automatically and there is no need for you to contact us or otherwise do anything else. If you have not yet paid please contact us to make payment so the order can be released.

If you agreed to pay a higher price for your order.

If you accepted revised pricing, we’ll refund any additional amount you have already paid above the original order price. This refund will be processed automatically as soon as possible and within 28 days, and we make the refund by the same method you used to pay. There is no need for you to contact us or otherwise do anything else.

If you cancelled your order.

If you cancelled your order please contact us so we can reinstate the order at the original price, and  to make payment.

We understand that the past few days have been difficult, and we’re genuinely grateful for your patience. Our aim now is to restore your confidence and provide the dependable and trustworthy service you have come to expect from Goff.

All the team at Goff would like to wish our customers past, present and future a very Merry Christmas and peaceful New Year. Here's an overview of our opening hours over the festive period...

Christmas Office Opening Hours

Christmas Eve 24th Dec – 8am to 1pm
Christmas Day 25th Dec – Closed
Boxing Day 26th Dec – Closed
27th Dec – Closed
28th Dec – Closed
29th Dec – 8am to 5:30pm
30th Dec – 8am to 5.30pm

New Year’s Eve 31st Dec – 8am to 2pm
New Year’s Day 1st Jan – Closed
2nd Jan – 8am to 5:30pm
3rd Jan – 8am to 4.30pm
4th Jan – 10am to 2.00pm
 

Please remember you can always orderonline 24/7 365 days a year, get a quote here.

PayPal Pay in 3 is a form of interest-free loan that offers an additional way to pay for heating oil top-up purchases between £30 and £2000.

Your payments are divided into three equal parts, with the first payment due at the time of purchase. Two automatic repayments are scheduled for the following months on the same date as the initial payment. 

Pay in 3 is an unregulated credit agreement, so you will have fewer protections than you would under a regulated credit agreement. Carefully consider whether the purchase is affordable and how you will make the repayments. 

Be aware of the possible impact of using Pay in 3 and of missing payments, including making other borrowing more difficult or more expensive. 

Pay in 3 eligibility is subject to status and approval. 18+ UK residents only. See product terms for more details. 

How can I pay with Pay in 3?

It’s easy! Just select PayPal Pay in 3 as your chosen payment method at checkout.

You’ll then be redirected to PayPal, where you can either log in to your existing PayPal account or create a new one. Once logged in, you can apply for a Pay in 3 plan. PayPal will check your eligibility and offer you an instant decision.

Once approved, choose the Pay in 3 option and follow the prompts to complete your purchase. Your order will be confirmed, and your heating oil will be delivered within your specified timeframe.

It’s that straightforward! Buy now, pay later!

As the crisp autumn air rolls in, it’s time to make sure your heating oil tank is in top condition for the colder months ahead. At Goff, we’re committed to helping our customers stay warm and efficient, while minimising any unexpected issues. Here’s your updated autumn checklist to ensure your heating oil system runs smoothly all winter long.

1. Inspect Your Tank for Damage or Leaks

Before the temperature drops, inspect your oil tank thoroughly. Look for signs of rust, corrosion on a metal tank and cracking on a plastic tank. A well-maintained tank can last for decades, but it’s essential to catch issues early. If you spot any problems, contact a professional heating engineer to carry out repairs or replacements.

Pro Tip: If you have a plastic tank, check for cracks that could expand with freezing temperatures. For steel tanks, inspect welds and seams for rust or wear.

2. Check Your Fuel Levels Early

Autumn is the perfect time to ensure you have enough oil in your tank to last through the colder months. You don’t want to be caught running low in the middle of a cold snap. At Goff, we recommend checking your oil tank's gauge or using a dipstick to get an accurate reading.

Tip: If your tank is nearly empty, consider topping it off early in the season. Buying oil at the start of autumn can often save you money since prices may fluctuate as the winter demand increases.

3. Clear Surrounding Areas of Debris

Ensure there are no obstacles blocking access to your heating oil tank. Overgrown plants, leaves, can hinder delivery and maintenance. Keep the area around your tank clear so oil deliveries can be made without any delays.

4. Inspect Your Fuel Lines and Valves

Fuel lines are crucial to the safe delivery of oil from your tank to your boiler or furnace. Inspect the lines for signs of wear, leaks, or blockages. Also, check the valves to ensure they’re functioning properly and securely closed when not in use. Any issues should be addressed by a certified OFTEC professional.

5. Schedule a Professional Service

Regular maintenance is essential for ensuring your heating system works optimally when the temperatures really start to drop. We recommend scheduling a full service for your heating oil system before the cold weather hits. A professional heating engineer can clean the burner, check your tank, and ensure everything is in good working order.

6. Know the Signs of Trouble

Keep an eye out for common signs that your heating system is struggling:

• Unusual noises from your boiler or furnace
• Inconsistent heating or cold spots in your home
• Smell of oil near your tank or in your house

If you notice any of these signs, contact an OFTEC professional immediately.

Final Thoughts

By following our autumn heating oil tank checklist, you can enjoy a warm, efficient winter without the stress of last-minute repairs. Regular maintenance is key to avoiding emergency situations and keeping your home cozy all season long. At Goff Petroleum, we’re here to support you with expert advice, quality heating oil, and reliable deliveries.

Need an oil delivery? Contact us today to order your heating oil.

How It Works

1. Pick an amount that suits you – decide how much you’d like to contribute each month. If you'd prefer some help working it out, just give us a call and we’ll guide you through it.

2. Set up a Direct Debit – quick and straightforward.

3. Start saving with ease – your monthly payments build up so you’re not hit with a big bill all at once.

Plus, as a little thank‑you, once your third payment clears, we’ll add £25 free credit to your account. Truly no strings attached.

What’s Great About Our Plan?

How to Get Started

Ready to make life easier? Here's what to do:

1. Choose a comfortable monthly amount (from £40).

2. Call us on 01953 713555 or email accounts@goffpetroleum.co.uk to set up the plan.

3. Sit back—as your savings grow, your future oil purchase becomes much more manageable.

If you'd like a lovely, printable application pack or have specific questions about your consumption, delivery options, or anything else—just us  know!

This year looks no different with heating oil prices right now at the lowest point they have been in over 3 years. Stocking up on heating oil now ready for the cold seasons, could potentially save you ££’s.

Order today – with continued global uncertainty prices may not stay this low for long!

And just to show how volatile the market is please take a look at today's market commentary;

Oil prices are extending sharply lower this morning on continued fears over President Trump's economic policy. Markets were unnerved by a speech marking his 100 days in office with President Trump once again undermining the chairman of the FED and talking tough over China. The latest US economic data continues to plunge with US consumer confidence falling to a five year low, down 8 points at 86 which is the worst reading since COVID in May 2020. In addition, the US jobs opening data also fell sharply on the month by 288,000 to 7.192m. The effects of Trump's policies are now appearing in Chinese economic data with Chinese factory activity falling sharply. Wall Street is now also expecting a 45% chance of a recession in 2026 according to a Bloomberg survey of economists. 

A quick heating oil quote and no hidden service charges.

Ordering heating oil direct from Goff means it’s just you and us – no middle-men, brokers or third parties to deal with. This means NO hidden charges for you, we promise! We aim to deliver in less than 10 working days, but if you need it sooner we have a range of low cost priority delivery options available.

With the Easter holidays just around the corner, we expect demand for heating oil to rise – and with that so could prices! 

Today, average heating oil prices are at their lowest in nearly two years, making it a great time to top up your tank and save.

Order today – with continued global uncertainty prices may not stay this low for long!

The CWP scheme helps to identify customers who are 75+ so UK and Ireland Fuel Distributors Association (UKIFDA) member heating oil suppliers know who may be at risk. The UKIFDA distributors can then take proactive steps to prioritise fuel deliveries to these customers, particularly during times of fuel shortages or extreme cold weather.

This potentially life-saving initiative costs heating oil customers absolutely nothing and you only need to ask your local UKIFDA member to be included in CWP. You can sign-up with Goff here.

As the winter chill sets in across the United Kingdom, the Cold Weather Payment scheme offers essential financial support to those facing the toughest conditions. This government initiative helps eligible individuals with their heating bills during prolonged cold spells, ensuring vulnerable households can stay warm and safe when the temperatures drop.

What Are Cold Weather Payments?

Cold Weather Payments are designed to help those struggling with heating costs during particularly cold weather. If the average temperature in a local area falls to zero degrees Celsius or lower for seven consecutive days, or is forecast to do so, the payment is activated. Each qualifying week, eligible individuals receive a payment of £25, which is automatically deposited into their bank account.

How the Scheme Works

The Cold Weather Payment scheme runs from November 1 to March 31 each year. Weather stations throughout the UK monitor local temperatures, and payments are triggered based on the temperature readings from the station closest to your postcode. This ensures that support is targeted to those who really need it, depending on the specific conditions in their area.

Recent Changes to the Scheme

In 2025, the UK government made some improvements to the Cold Weather Payment scheme, making it more efficient and accessible for those in need. These changes include:

Better Forecasting: The government has upgraded weather forecasting technology, allowing for more accurate and timely predictions. This helps ensure that payments are made exactly when they’re needed, avoiding delays.

More Weather Stations: The network of weather stations has been expanded, especially in rural and remote areas. This ensures that even the most isolated communities can receive accurate temperature readings and timely payments.

Easier Application Process: While most payments are made automatically, the application process for those who need to apply has been simplified. Claimants can now easily check their eligibility and submit applications through an online portal.

Who’s Eligible?

Cold Weather Payments are available to individuals receiving certain benefits or support. While the eligibility criteria vary slightly across different regions of the UK, here are the key benefits that make someone eligible:

• Pension Credit

• Income Support

• Income-based Jobseeker’s Allowance

• Income-related Employment and Support Allowance

• Universal Credit (with additional criteria, such as having a child under 5, or a health condition or disability)

•  

How to Claim

Most people who qualify for Cold Weather Payments will receive them automatically. If you already get a qualifying benefit, you don’t need to apply – the payment will be credited directly to your bank account within 14 days of the cold spell being triggered.

If you think you’re eligible but haven’t received a payment, you can check your eligibility and apply through the government’s online portal. You can also enter your postcode to see how many payments should have been made for specific weeks.

If you or someone you know may be eligible for Cold Weather Payments, it’s a good idea to check your eligibility and apply if necessary. Staying informed ensures you can take full advantage of this valuable support, helping you manage your heating costs and keep your home warm throughout the winter months.

Additional Resources:

What are cold weather payments and who can get them? - BBC News

Congratulations on winning 500 litres of heating oil! And thank you to all of our customers who took the time to vote for this very worthwhile good cause. 

You can find out how The Bumblebee Children's Charity makes a difference to the lives of Suffolk Children here or see their work on this inspiring video:

Goff Heating Oil are proud to aid local charities and good causes by providing them with a chance to win 500 litres of heating oil. You can find out more about the Goff Good Causes project and see past winners here.

The nominations have been narrowed down to a select ten, located across East Anglia and the South East, who now need your vote to win!

Goff Heating Oil are proud to aid local charities and good causes by providing them with a chance to win 500 litres of heating oil. You can find out more about the Goff Good Causes project and see past winners here.

Crude Oil Market in 2024

Heating Oil Market and Price changes:

By Quarter:

Q1:
The year began with Houthi rebels in Yemen continuing to attack ships in the Red Sea and Gulf of Aden, causing supply disruptions. This led to rerouted products around the Cape of Good Hope in South Africa, impacting oil prices. Weaker crude prices prompted OPEC+ to extend voluntary production cuts until the end of Q2. At the same time, European refineries underwent maintenance, and Russian refineries faced Ukrainian drone attacks.

Q2:
Ukraine's ongoing attacks on Russian oil refineries made headlines in Q2, with the Tuaspe refinery, processing 240,000 bpd, hit on May 17th. In total, Ukraine targeted 12 refineries and storage areas in May, though most remained partially operational. Despite European and US refineries undergoing maintenance and Russian refinery outages, oil prices remained low due to weak demand and supply. Diesel barges began trading at discounts to front-month futures as early as April 4th, with ICE Gasoil flipping to contango on April 17th. In June, OPEC extended its voluntary production cuts for another quarter, while involuntary cuts were extended until the end of 2025.

Q3:
Fears of a global economic slowdown dominated Q3, with growing expectations for lower interest rates. In July, Chinese GDP growth was lower than expected, raising concerns about global oil demand. August brought weak US payroll data, and the largest downward revisions to historic data in 15 years. By September, the Federal Reserve cut interest rates by 0.5%, signalling a shift. Meanwhile, OPEC extended production cuts through October and December. Libya imposed an oil export ban due to a dispute between rival governments. Tensions in the Middle East rose as Israel attacked Hezbollah’s communication devices and assassinated its leader in Lebanon in September.

Q4:
Q4 began with escalating tensions in the Middle East, as Iran launched large air strikes on Israel, with a limited Israeli response. OPEC extended production cuts through December, then pushed them into Q1 2025, with gradual reductions planned through September 2026. In October, Libya reopened its oilfields. The big news in Q4 was the re-election of Donald Trump as US president, sparking a rally in stocks, the dollar, and oil markets, fuelled by expectations of his pro-business policies. Ukraine also used US long-range missiles against Russia for the first time. The Fed made its final interest rate cut of the year, signalling fewer cuts in 2025 than previously expected.

This was a year full of geopolitical tensions, economic shifts, and market reactions that shaped the oil, fuel, energy and currency markets across the globe! What might 2025 hold?

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

Sources:

Brent & WTI Oil Futures Updates - BBC News

Is the economy facing another energy price shock? - BBC News

Will global energy prices fall this year? - BBC News

How worried should I be about rising oil prices? - BBC News

World Bank warns oil prices could reach $150 a barrel - BBC News – Oct 2023 article

If your tank is less than half full, we recommend placing an order now to ensure you're ready for the colder weather ahead.

Here are five tips from Oil Firing Technical Association (OFTEC) and the UK and Ireland Fuel Distribution Association (UKIFDA),to help you stay warm and safe this winter:

1: Keep Your Boiler Maintained

Regularly check your heating oil boiler and tank to ensure they are working efficiently and not wasting heating oil. It’s recommended to have your oil heating system serviced annually by a local OFTEC engineer, find a registered technician near you.

2: Book Your Heating Oil Delivery Early

UKIFDA suggest ordering your heating oil early this winter to avoid spikes in demand and winter-related delays which can lead to the risk of running out.

Prices have started to rise and are likely to continue to rise as the temperature drops. Get a fast competitive quote here to ensure your well stocked.

3: UKIFDA’s Cold Weather Priority Scheme

If you or someone you live with is 75 years or over, sign up for UKIFDA’s free Cold Weather Priority (CWP) scheme. This initiative helps us identify at-risk customers so we can prioritise fuel deliveries, particularly during extreme cold weather or fuel shortages.

4: Struggling To Pay

We understand the importance of keeping our vulnerable customers, and those struggling to pay for their oil, up to date with the latest guidance and support. The Government’s Help With Your Energy Bills guide advises on this year’s Cold Weather and Winter payments.

We can also help with spreading the cost of your heating oil over the year, with our pay monthly plan.

5: Choose a UKIFDA-Accredited Distributor

Goff are proud to be a UKIFDA member, ensuring we provide a better service for all our customers, from order to delivery.

Redwings Horse Sanctuary

Congratulations on winning 500 litres of heating oil! And thank you to all of our customers who took the time to vote for this very worthwhile good cause.

Goff Heating Oil are proud to aid local charities and good causes by providing them with a chance to win 500 litres of heating oil. You can find out more about the Goff Good Causes project and see past winners here.

Is your boiler or Aga fighting fit this Autumn?

Has your boiler had its annual service and safety check? A little tender loving care goes a long way to reducing the chance of breakdowns. A service will ensure your system runs at peak performance, meaning you get the most from your heating oil stock, and also reduces the risk of potential carbon monoxide issues.

Healthy Tank

Is your tank fit too? When clearing away the Autumn leaves take a little time to check your heating oil tank and the area around it. Clear away any debris, weeds or overgrown plants from the immediate oil tank area, and make sure the path to the tank is clear for you and the delivery tanker driver.

With the area clear you can check a metal oil tank for rust, or a plastic tank for signs of damage or cracking. Make sure the pipes, filters, and fittings, including any locks, are in good condition and free of leaks. If you have any concerns then get the opinion of a professional. Speak to an OFTEC qualified engineer to see if it needs repairing or should be replaced. Finally check your oil level because it may be:

Time to Top Up

After the clocks go back prices tend to rise and delivery times get longer as the Autumnal cold bites. This Autumn heating oil prices are good so why not make the most of this by topping up before the demand, and disruption, of Winter kicks in.

So let's:

• Service Boiler
• Clear Tank
• Check Oil Level
• Order Top Up
• And kick the Winter worries away

• Redwing Horse Sanctuary
• Hillside Animal Sanctuary
• Buttercups Sanctuary for Goats
• The Kit Wilson Trust For Animal Welfare
• SESAW (Suffolk and Essex Small Animal Welfare)
• Lord Whisky Animal Sanctuary
• Suffolk Prickles Hedgehog Rescue
• East Norfolk Cats Protection
• Wild at Heart Foundation
• Suffolk Animal Rescue

Voting is now open, so here's your chance to pick your winner.....

If you are, or know of, a local animal charity that would like to win some free heating oil, please sign up on our charity page. It's quick and easy.

We're really proud to have delivered thousands of litres of oil over the last few years and winners have included Youth Clubs, Village Halls, Animal rescue centres, Hospices and Churches. 

Many thanks to everyone who ordered heating oil on Norfolk Day. Together we managed to raise £428 for Lowland Search and Rescue. 

We couldn't have done it without you! 

To find out more about the other charities Goff Good Causes have supported click here.

Did you know that the Goff name can be traced back to 1888 when Herbert Goff began the business in Norfolk. To celebrate our roots we have decided to extend our Goff Good Causes programme and raise money for Lowland Search and Rescue on Norfolk Day (27th July 2024) by pledging to make a donation for every heating oil order placed on that date.

It costs a staggering £15,000 per year to keep the Lowland Search and Rescue team running. With no government funding, the charity relies on public donations and business sponsorship to ensure kit and training can be provided and maintained.

Can you help us reach £500 by placing an order on Norfolk Day – 27th July?

Why not join those that buy in the warm months, stocking up now whilst demand and prices are normally much lower. This year looks no different with prices right now at the lowest point they’ve been in over 10 months.

The Goff name and business can be traced back to 1888 when Herbert Goff the Great Great Grandfather of today’s Managing Director Will, began the business in Norfolk.

The fuel business started with domestic paraffin being delivered to homes in Norwich and agricultural fuels to farms in the villages nearby. During the 1970s many rural homes installed oil fired central heating systems and as demand for fuel grew so did Goff with the construction of our own oil storage depot, garage, and petrol station, on Aylsham Road in Norwich. Poppy Red was introduced into our lettering and logo inspired by the official flower of Norfolk, the Poppy.

Since then Goff Petroleum has proudly carried Poppy Red on it's lorries, uniforms and logo, inspired by the County where the company started and where it is still based. 

Today Goff is one of the largest heating oil distributors and has depots, staff and customers that reach across East Anglia and into the South of England. However the head-quarters and workshops for the company are still based in Norfolk on the outskirts of Wymondham.

To celebrate our roots in Norfolk we have decided to extend our Goff Good Causes programme and raise money for local good causes every Norfolk Day by making a donation for every order placed.

Great news for all our customers: Our average heating oil price has hit a 9-month low.

If you need to top-up your heating oil, it's the perfect moment to do so. We have excellent prices available in your local depot and we do not add sneaky service charges.

Click here for a quick quote - placing an order online is a breeze, taking less than 2 minutes.

If you prefer to call you can reach us on 01953 713555

Better Price, Better Service, Better Click Goff

Should you wish to check the stats; The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

What is a Watchman?

A Watchman is an automated oil monitoring device which is fitted in your home heating oil tank and sends a radio signal to a digital readout in your house. Watchmans have replaced sight tubes on many domestic heating oil tanks over the last few years. It allows you to easily monitor the oil levels in your tank and prevent run outs. 

If the receiver detects a low battery a warning message is displayed on the unit in the home. It shows the oil level in the tank plus a constantly flashing warning triangle.

The lithium battery fitted to your Watchman will have a long service life, but it will eventually become exhausted and will need replacing. 

The battery model required is: VARTA CR2430, and they are avaliable locally from good photographic shops or chemists or can be purchased online.

9 Steps to replacing the battery:

1.   Switch off your Watchman display in the house

2.   Remove transmitter from tank

3.   Take transmitter indoors, into a clean dry environment

4.   Using a cross point screwdriver, undo the four screws, located under the main body of transmitter

5.   Remove the top cover, Flip out battery, Clip in new battery, Re-fit cover

6.   Evenly tighten all four screws - do not over tighten

7.   Replace transmitter on the tank

8.   Switch on your Watchman display in the house

9.   Wait 5 minutes for the oil level to refresh

Other possible error messages:

F = Full

Red Light Flashing with no level = No Signal

Red Flashing Light = Tank is low on fuel

Fluid Level Low & “BAT LOW” = New power tube needed

C = Connection fault replacement needed

Further information can be found here. Watchman Ultrasonic Installation Instructions

Yes that’s right the service charge that was £9.98 has risen by more than £5 to a staggering £14.99; what’s more a year ago the service charge was just £3.49.

So the last 12 months have seen BoilerJuice apply an eyewatering 500% increase to a charge that they hid in the total price of the delivery. With most people currently ordering oil 3 times a year, that’s an extra £45 BoilerJuice are pocketing and for what, the pleasure of using the Boilerjuice website?

As a broker what costs do they really have?

As one of the largest heating oil providers our cost per litre includes, collecting the oil from the refinery, storing it and delivering it to you using our own people and vehicles.

When it comes to the cost of buying heating oil it’s important to look past the pence per litre cost and look at the total price. That sneaky £14.99 service charge equates to an extra 3p per litre on a 500-litre order. Maybe it’s time to ask yourselves are you really getting a better price?

Beware of more hidden BoilerJuice costs.

That’s not the only hidden cost; if you have estimated how much oil you need and then don’t need that amount, Boilerjuice have been known to change the cost per litre to a higher rate and charge a under volume fine.

At a time when two thirds of adults in Britain are reporting that the rising cost of energy is causing an incredible squeeze on household budgets is frankly staggering.

Be Real.

As a real heating oil distributor we think it's sad that a broker taking hundreds of orders per day uses each and every one of those orders to squeeze more from their suffering customers to boost the coffers of their private equity owners. 

Are BoilerJuice offering exceptional service?

I guess for that £14.99 service charge, Boilerjuice are delivering exceptional service?

Well reading the reviews on various review platforms that doesn’t seem to be the case. 

To be fair as the middleman they are limited to what they can actually do, they have no direct control over when or how the supplier of choice delivers or doesn’t.

Middlemen must be good at communicating then?

Well you’d expect communication to be great from a middleman but it appears that when something goes wrong customers find it hard to speak to someone and call backs can take days and e-mail responses even longer.

To find out what a Better Service and Better Price looks like you Better Call Goff.

The Tree House Children's Centre

Congratulations to them, the 500 litres of heating oil is theirs!

And thank you to all of our customers who took the time to vote for this very worthwhile good cause.

You find out more about the other charities Goff Good Causes have supported here.

Our offices are closed today (Saturday 30th), New Years Eve and New Years Day. Normal working hours resume from Tuesday 2nd January 2024.

In need of a top up? You can always order your heating oil online 24/7 come wind, rain or shine. We'll deliver a fast and efficient service direct to you at a price you won't find with any clubs or on any oil comparison websites.

Better Price, Better Service, Better Click Goff

The Red Sea is an essential shipping route and is responsible for 10% of the world's international trade, so there is likely to be significant impact from temporarily closing this route. BP said it would keep its "precautionary pause under ongoing review" and monitor the region.

Does this impact heating oil prices?

According to the BBC, a temporary pause to all commercial sailing by major companies including energy giant BP could potentially have implications on the global oil supply chain.

The disruption this will cause to shipping combined with the UK winter season is likely to have an impact on supply and demand. This in turn is likely to have an adverse effect on the global oil market, including heating oil prices.

The question is how long this will continue, BBC report that 'despite the launch of a global operation to ensure safe passage through the Red Sea, it's not clear when commercial shipping companies will fully return to the Red Sea route.'

You can read BBC article here: Fears of higher oil prices after Red Sea attacks.

The Goff Outlook

I think its fair to assume that the most likely result will be prices rising in the near future, until the situation is resolved. If you are in need of a top-up we would suggest ordering early for the best possible prices.

All the team at Goff would like to wish our customers past, present and future, a Merry Christmas and peaceful New Year.

UKIFDA CEO Ken Cronin explains: “As the clocks change, signalling the start of winter, we are urging off-grid customers, who rely on heating oil to keep their homes warm and working, to ensure they’re as ready as possible for this winter. Here are some recommendations designed to be helpful reminders and useful advice to assist in the winter preparation.”

1: Get ready for winter with simple maintenance and efficiency checks

Over time, boilers become less efficient and tanks can become damaged. By checking both regularly you can be confident that the heating oil you buy is not wasted.

Check your tank and clear the area around it to make sure it’s accessible for a smooth and safe delivery. For optimum efficiency, it’s worth booking a boiler service with your local OFTEC engineer.

OFTEC Chief Executive Paul Rose explains why: “Booking an OFTEC registered technician to service your liquid fuel-fired heating and cooking appliances regularly helps to keep them operating efficiently. This reduces fuel bills and saves money on costly call-out fees for unexpected breakdowns.”

2: Order in plenty of time

Check the level of oil in your tank. Whilst the UK has seen three heatwaves this summer, don’t leave it too late to check and risk running out.

Emergency deliveries can be costly and not always immediately possible.

3: If you’re over 75, sign up for the FREE Cold Weather Priority scheme

If you are 75+ or live with someone who is, please sign up for the free Cold Weather Priority (CWP) scheme set up by UKIFDA.

The CWP scheme helps to identify customers who are 75+ so UK and Ireland Fuel Distributors Association (UKIFDA) member heating oil suppliers know who may be at risk. The UKIFDA distributors can then take proactive steps to prioritise fuel deliveries to these customers, particularly during times of fuel shortages or extreme cold weather.

This potentially life-saving initiative costs heating oil customers absolutely nothing and you only need to ask your local UKIFDA member to be included in CWP. You can sign-up with Goff here.

4: If you are struggling to pay, check the government’s advice

For those heating oil users that may be vulnerable or are struggling to pay for their oil, there are a number of guides which are packed with useful information and provide helpful guidance on how to access support where needed.

Click below to find out more:

Help for Households

Other organisations that can help are:

Citizens Advice

Fuel Bank Foundation

Age UK

National Energy Action
 

5: Contact your regular (and local) distributor

Contact your local UKIFDA heating oil distributor to check the oil price and find out about their payment and service options.

UKIFDA recommends you contact the distributor you use most regularly to discuss the price options available at the time of your order.

Right now, across the UK and Northern Ireland, UKIFDA distributors are working hard, individually and collaboratively, to ensure customers are supported and serviced effectively this winter.

What the Prime Minister said…

* Existing proposals to ban the installation of domestic oil boilers in off-grid homes will be moved from 2026 to 2035.

* There will be an exemption to the phasing out of fossil fuel boilers, including gas, in 2035 to ensure households who will most struggle to make the switch to heat pumps, or other low-carbon alternatives, won’t have to do so. This is expected to cover about a fifth of homes, including those off the gas grid.

* The UK’s target to achieve net zero emissions by 2050 remains in place.

The government has since clarified that they will explore potential low carbon heating options for off-gas grid properties that are not suitable for heat pumps by issuing a consultation.

Off-grid households must have a choice…

We are pleased that the government has recognised its existing proposal to ban the installation of fossil fuel boilers from 2026, and forcing properties to switch to a heat pump, unfairly targeted off-grid households.

These older properties are often unsuited to heat pumps without extensive additional work, such as new radiators, new piping, the introduction of a hot water tank, and additional insulation. As a result, they would have faced some of the highest costs with some of the poorest outcomes.

That’s why it’s important the government explores all the options on the table…

The demonstration project led by UKIFDA and supported by Goff has seen 150 properties prove that a renewable liquid fuel called Hydrotreated Vegetable Oil (HVO) provides a pragmatic and straight forward solution for oil heating homes. This liquid fuel reduces emissions by an eyewatering 88% and existing oil-fired boilers can be converted in just a few hours for under £500.

Here at Goff we are pleased with the support the project has received from rural MPs for this approach. As a result, the government put forward an amendment to its Energy Bill which committed it to delivering a consultation on the use of renewable liquid fuels within 12 months of the Bill receiving Royal Ascent.

It’s vital the government now brings forward this consultation as quickly as possible and supports a fuel obligation to reduce the cost of HVO so it can be deployed more widely to the UK’s 1.7 million homes.

You can find out more about the demonstration project here https://futurereadyfuel.info/

Here we take a look at what this could mean for Heating Oil users.

He gave a number of examples of the types of policy in his opinion that are causing issues including banning boilers in homes that can never conceivably install a heat pump and a ban on off grid oil boilers in just 3 years’ time. Additionally, he commented that the cost for off grid in 3 short years was exorbitantly expensive and that he was concerned about imposing these costs and causing so much disruption without a proper debate, while ignoring the progress the country has made on carbon reduction compared to other countries.

At the heart of his announcement was the view that it cannot be right to ask the British people to sacrifice even more and that the real risk is losing the consent of people because they view the policies us unfair which ultimately leads to not achieving the emission goals as set out.

He announced a fairer and better approach to heating homes achieving a balance without imposing costs. As stated not doing so would cause public support to collapse.

He made the following comments:

Promise to never force anyone to rip out their boiler.

The oil boiler ban moves from 2026 to 2035.

Those homes that can never take a heat pump will have a lifetime exemption - estimated this will cover 20% of all homes.

Boiler upgrade scheme will be increased to £7,500 from £5,000 for those that want to move earlier.

Other comments and announcements.

The Prime Minister also moved the ban on petrol and diesel cars to 2035 from 2030, reduced the target for gas boiler replacement to 80% and removed imposition of energy efficiency measures on landlords.

_{We believe you can.}

Would you like to knock another £10 off the cost of your online order?

_{We believe you do.}

Order your heating oil online and get £10 off with code:

GQ£10off

Better Price, Better Service, Better Click Goff

We couldn't have done it without you! 

To find out more about the other charities Goff Good Causes have supported click here.

How does this affect heating oil?

Crude oil is required to produce heating oil so when the price of crude oil rises so does the price of the heating oil produced from it.

Can I beat the rise?

The market has already reacted but the suggestion is that the rises could continue. Ordering today could well save you money so it’s a good idea to check your heating oil levels, and if you need a top-up place you order sooner rather than later.

With the seasons starting to change and the colder weather returning, we anticipate a rise in demand which can also see the price start to rise.

Our advice is if you have room in your tank, now looks like a wise time to order a top up.

And we are delighted to announce that St Peter Ad Vincula, the Parish Church of Wisborough Green in West Sussex will receive 500 litres of heating oil! Congratulations!

Many thanks to everyone who took part in this Good Causes campaign. You can find out more about the Goff Good Causes project and see past winners here.

Following George Eustice MP’s article in the Telegraph we would like to share this Joint statement from Paul Rose, Chief Executive of OFTEC, and Ken Cronin, Chief Executive of UKIFDA, on decarbonising off-grid homes:

“Many of our off grid customers live in rural communities, with older properties who face real and serious challenges about how to decarbonise their home heating. They have told us they need to be given a choice of how they can do this in an affordable way which results in minimal disruption.

“This is the reason why our industry over the last 2 years has invested time, effort and money – without government subsidy – on developing a solution, using renewable liquid fuel as a replacement fuel for kerosene. We have successfully demonstrated this solution in 150 sites across the UK, including churches, schools, historic building buildings, pubs and residential homes.

“The conversion from oil to these renewable fuels can be done quickly, at a reasonable upfront cost and without disruption and it results in immediate reductions in carbon emissions. Our industry, members and customers are urging the Government to support George Eustice’s amendment to the Energy Bill, which will bring the cost of these fuels down for consumers, as they already have in transport, while costing the taxpayer nothing.”

You can download a template letter and write to your MP about renewable liquid fuels here.

Mitchel & Webber were the first UK fuel distributor to trial HVO in an oil fired domestic boiler in Cornwall in 2020.  

During the 1970s many rural homes installed oil fired central heating systems and as demand for heating oil grew so did Goff with Poppy Red being introduced into our lettering and logo inspired by the official flower of Norfolk, the Corn Poppy. For nearly half a century we have proudly carried Poppy Red on our lorries, uniforms and logo, inspired by the County where we started and are still based. 

This year to celebrate our roots we have decided to extend our Goff Good Causes programme and raise money for Caister Lifeboat on Norfolk Day (27th July 2023).

We pledge to make a donation of £1 for every heating oil order placed on the 27th July 2023 either by phone or online.

Can you help us reach our £500 target? 

If it’s been a while since you last got a quote then we think you will be pleasantly surprised at the current low rates. Get your quote in under 30 seconds and see how much you can save.

UKIFDA, our trade association, has shared the following and asked the team at Goff to inform our domestic heating oil consumers that the government’s domestic Alternative Fuel Payment scheme comes to an end this month.

UKIFDA statement:

Last chance to claim £200 Alternative Fuel Payment

The government’s domestic Alternative Fuel Payment scheme comes to an end on 31^st May. The £200 payment is open to anyone that uses kerosene heating oil as their main source of heating and has not yet received payment directly from local councils or through their electricity supplier.

The AFP application portal can be found here: https://www.gov.uk/apply-alternative-fuel-bill-support-if-not-automatic and will be open until the end of May.

For applicants without online access living in Great Britain, the contact centre helpline number is 0808 1753943. For people living in Northern Ireland, the number to call is 0808 1753894.

The helpline is open from 8 am to 6 pm on Monday to Friday, and a representative will guide applicants through the process.

To apply through the portal, customers will need to have the following ready:

Proof of address

Bank account details

Proof of heating oil purchases with a value of £200 or more and with a date between May 2022 and the end of the application window (31 May 2023).

After a number of checks, customers will receive payments through their local authority.

Should you need a copy invoice/delivery note to assist in your application then please contact us.

The government has extended the receipt window for those heating oil customers wishing to apply through the government portal for their £200 domestic alternative fuel payment.

The previous window was from September 2022 to May 2023. This window has been extended back to June 2022 to ensure that households who purchased fuel in bulk ahead of the winter are able to receive the £200 energy bill support they are entitled to.

The AFP application portal can be found here and will be open until the end of May.

To apply through the portal, customers will need to have the following ready:

Proof of address

Bank account details

Proof of heating oil purchases £200 or more between June 2022 and 31 May 2023. Please email our accounts team if you need a copy delivery note.

For applicants without online access living in Great Britain, the contact centre helpline number is 0808 1753943, the helpline is open from 8 am to 6 pm on Monday to Friday,

Please beware of scams.

We advise customers to be aware that no one will contact them about this matter unless they first contact the government.

Brent Crude Dated ($ per Barrel)

Price at Start of Period: $81.60                 Price at End of Period: $78.57

Highest Price in Period: $88.64                 Lowest Price in Period: $71.30

Exchange rate varied over the period from a high of $1.2516 to a low of $1.1883

Resulting in a Heating Oil Price (Pence Per Litre) range: 23.06 ppl

Our review of 2022

2022 will go down in history as one of the most volatile years for oil and commodities. 

ICE Brent Crude had a $64/b. trading range in 2022, reaching an intra-day high of $139/b on 7th March and an intra-day low of $75/b on 9th December.

The year began with strong fundamentals and the war in Ukraine pushed prices to all time highs.  However, OPEC+ failed to increase oil supply by sufficient volumes.  As a result inflation spiked, forcing the US Federal Reserve to aggressively hike interest rates. 

The US Federal Reserve essentially "wrestled control" of the oil market from OPEC+ by slowing oil demand growth via higher interest rates.  As a result Brent Crude ended the year up just 10.45% at $85.91/b.

Oil Market Key Events in 2022

January

Fundamentals strengthen as refinery outages and increased demand weigh on crude and diesel stocks.

February

Prices extended higher as Russian – Ukraine tensions rise. Russia finally invades on 24th Feb, sending oil markets into a volatile frenzy.

March

The war in Ukraine continues as the world looks for alternative energy supply. ICE Gasoil blows out on 9th March, peaking at $1665/t.

April

United States announced the release of 180 million barrels of crude oil (1 million barrels per day) of emergency reserves from 1st May 2022.

May

EU agreed a ban on imports of Russian oil from December, however, some European oil traders ceased buying Russian diesel in mid-May.

June

The US Federal Reserve hiked interest rates by 0.75% (75 basis points) which was the biggest interest rate rise since 1994.

July

US President Biden visits Saudi Arabia in the hope that OPEC will pump more oil. The Euro falls below $1.00.

August

OPEC+ announce production hike of 100,000 barrels per day, effective September. Rhine water levels fall to 31cms at Kaub, Germany.

September

OPEC+ announce cuts of 100,000 barrels per day, effective October. Recession fears cause oil demand worries. Nord Stream pipelines damaged in explosions.

October

OPEC+ announces production cut of 2 million barrels per day from November. President Biden announces release of 15 million barrels from SPR (Strategic Petroleum Reserve). French refinery strikes lead to refined product tightness in Europe.

November

Economic slowdown fears lead to demand concerns as FED hikes by 75bps, Saudi Arabia cuts oil prices and COVID cases spike in China.

December

OPEC leaves production quota unchanged. G7/EU ban on Russian crude takes effect.

So that the monthly time line but how about a report and some forward-looking predictions thrown in for good measure. Last year many reporters correctly predicted the direction oil prices would take and the scale of the price movements. Even without the reckoning of the Ukrainian invasion (which wasn't widely predicted), we still anticipated price rises and the strong likelihood of a major price spike; “we can say that the supply-demand situation remains critical and in fact the danger of a major price spike looks more likely this year than it did in 2021”. It was pointed out that declining investment in oil production coupled with rapid post-Covid demand recovery was putting huge pressure on prices. Attention was also focused on the incredible situation with regards gas, which by January 22 (again, before the Ukrainian invasion) was already trading at stratospheric levels which a number of comentators projected would encourage major energy users to switch away from gas (to oil), thus putting more pressure on the price of crude.

With a backdrop like that, it was little wonder that when Russia invaded Ukraine, the effect on oil markets was seismic, with crude hitting almost $140 per barrel by March. However, if we actually consider the year as a whole (rather than the crazy months of Spring), the overall price trajectory of oil – whilst broadly in an upwards direction – wasn’t perhaps as spectacular as might be assumed. On the first working day of 2022, the price of crude was $77 per barrel and yes, by March it had risen to $138. But by the final quarter of the year, prices were trending heavily downwards, such that by the final working day (30th Dec 2022), the price was actually “only” $86 per barrel – an inflation matching increase of 12% ($9 per barrel).

The devil however, is always in the detail and the $ price of crude only tells a fraction of the whole story. The first factor that ensured the Great British public experienced more than a mere $9 per barrel movement, was our old friend the exchange rate. Everyone knows the drill by now; oil is priced in $, which means it has to be converted to £ when it is sold in the UK. On the 30th December (2022) the price of diesel was $958 per tonne and the exchange rate was $1.2029 to the £ GBP. That gave a price of £796 per tonne and a pence per litre (ppl) cost of 67.32. Now compare the year-end exchange rate to the same day 12 months earlier (30th Dec 2021), when there was $1.3544 to the pound. If we applied that 2021 exchange rate to the 2022 price of diesel ($958), we actually would have ended the year at £707 per tonne (958/1.3544) or 59.79ppl. That’s an increase of 7.50ppl (+10%) as a result of the falling value of sterling, which has to be added to the basic 12% increase in the core cost of crude.

If there was one stand-out fuel story of 2022 it was not the price of crude, nor the crashing value of the pound, but the soaring cost of diesel. Whilst market commentators are often fixated by crude (which actually only directly affects refineries), it is finished product that matters most to consumers and diesel above all else, has the greatest impact when it comes to cost of living. And here again we had extra-ordinary movements in the price. Diesel started 2022 (4th Jan) at $677 per tonne and therefore logically should have ended the year around 12% higher ($760) if it had followed the same trajectory as crude. Imagine the scenes then, when it turned out that diesel ended the year over 40% up at $958 per tonne, which when added to the impact of the exchange rate, gave an increase of 25ppl (60%) in the cost of diesel. That certainly boots the paltry $9 per barrel crude increase well and truly out of the stands!

This brings us nicely on to our predictions for the new year, with number one being that there will be much greater focus in 2023 on refined fuels and in particular, diesel. Prediction number two is that for the first time since the Ukrainian invasion, Russia will begin to feel the pinch of sanctions and this will also be diesel related. Whereas the Western boycotts of Russian crude in 2022 simply reversed product flows away from Europe and into China and India, this will not be the case with Russian diesel (which will receive the strongest sanctions yet as of February of this year). The Asian economies all need crude to keep their refineries running, but what they don’t need is ready made diesel from Russia, which would only undermine Chinese and Indian refining capacity. In effect, Russian diesel will have nowhere to go and will be removed from the market – in the West because of sanctions and in the “East” because of refinery protectionism. As a result (prediction three), we can expect a major diesel spike in the first half of 2023, along with significant damage to the Russian refining industry (prediction four). Our next forecast is that once again the correlation between diesel and crude will evaporate, but this will be short-lived as non-Russian refining capacity ramps up and soon fulfils demand. By the second half of the year, diesel will start coming down in price and re-correlate with stabilising crude oil prices. And that’s our final and most bold prediction for 2023, which is that crude will be lower in price this year than in 2022. Oh…one more…oil markets this year will not be boring. They never are!

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

The last monthly oil market report we published can be found here:

Heating Oil Market Price Information December 2022 - Goff Petroleum

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

Electricity suppliers have been given a list of heating oil users by the Government. Recipients have been identified by Civil Servants using the off the gas grid database, information about individual electricity meters and recent census information.  

If you don’t have a relationship with an electricity supplier (e.g. you live in a park home where you pay the park owner for your electricity, or on a houseboat), you’ll need to apply for the AFP through a new government portal, which government now says will be live on 27th February. This means you probably wouldn’t get the payment until the end of March.

Who will receive the Alternative Fuel Payment

The Government’s Alternative Fuel Payment is available to all homes who aren't using use mains gas for heating.

To help with your energy bills this winter, you'll receive the Alternative Fuel Payment (AFP) as a one-off payment of £200. This payment is in addition to the Energy Bills Support Scheme (EBSS) non-repayable discount of £400, which you should’ve already started to receive as a credit to your electricity bill.   

How and when you’ll get your payment 

For households with a domestic electricity contract, your £200 is due to be paid via your electricity supplier on 6th February. This will be done as a credit on your electricity bill.

How will the £200 alternative fuel payment will be paid by your electricity provider?

Octopus - Octopus will be providing the £200 alternative fuel payment by crediting your electricity account.

EDF -EDF will provide the alternative fuel payment in two ways:

1. If you are on a budget Direct Debit, you will receive the payment in your bank account.

2. If you are not on a budget Direct Debit, EDF will add £200 credit to your electricity account towards your next electricity bill.

OVO - OVO have a range of ways they will provide the alternative fuel payment.

If you pay your energy bill by Direct Debit, your alternative fuel payment will go straight into your bank account as a refund.

If you pay when you get your energy bill, OVO will provide the £200 as credit to your energy account.

If you use a Smart Pay As You Go meter to pay your energy bill, the £200 will be paid to your electricity smart meter as a credit.

If you have a traditional Pay As You Go meter, you will receive your alternative fuel payment by post with detailed instructions on how to process this payment. The two options to process payment are through mobile banking or a Pay Point.

British Gas - British Gas will be providing the £200 alternative fuel payment by a reverse direct debit.

Scottish Power - Scottish Power will be providing the alternative fuel payment into your bank account.

E-On - E-On will be providing the alternative fuel payment in three ways depending on the way you usually pay for your energy.

If you pay via Direct Debit or Pay On Receipt of Bill, the £200 paid into your energy account as credit, like mine below.

If you pay using a Pre-payment, a cash voucher will be sent to you. You will then need to go to a Post Office to get the money paid into your bank account.

If are a Pay As You Go customer, the alternative fuel payment will be sent to your electricity meter.

I don't have an Electricity provider!

Those in park homes or houseboats without a direct relationship with electricity supplier and those on the gas grid but without a gas connection who use heating oil, will need to apply to the domestic AFP Alternative Fund via application portal on gov.uk. This portal has now been opened and our trade organisation UKIFDA sent out the following to share this with our customers.

Government launches online portal for alternative fuel payments.

The government has launched the online alternative fuel payments portal for those heating oil customers who have not received their £200 payment directly through their electricity account.

The portal can be found here: https://www.gov.uk/apply-alternative-fuel-bill-support-if-not-automatic and will be open until the end of May.

For those without online access, the contact centre helpline can be reached on 0808 1753943 for applicants in Great Britain where a representative will guide you through the application process. The helpline is open 8am to 6pm on Monday to Friday.

Customers should have ready proof of address, bank account details, and proof of heating oil purchases with a value of £200 or more and with a date between September 2022 and the end of the application window (31 May 2023). After a number of checks customers should get payments through their local authority. Should you need a copy Goff delivery note/invoice as proof then please complete our contact form.

Customers should be aware no one will contact you from government about this unless you contact them – so please be aware of scams.

Scam Warnings

With regard to the portal, the government has warned customers should take no action until the online portal launches later in February and that customers will not be asked for details by any individual or organisation prior to this or outside of the portal, and any such contact is likely to be a scam. 

Here at Goff Heating Oil we would like to reiterate that in 99% of cases we believe that you will need to do nothing and will receive your £200 Alternative Fuel Payment direct via your electricity supplier.

For further information visit: 

https://www.gov.uk/government/news/households-businesses-and-organisations-off-the-gas-grid-to-receive-energy-bill-support-over-the-coming-weeks

The Met Office has backed this up with a warning that a “major weather event” which brought the Beast from the East to Norfolk is now very probable in the coming weeks. 

The forecaster has said a major Sudden Stratospheric Warming  (SSW) is “now likely” in late February or early March but stressed this does not always equate to a Beast from the East-like weather scenario.

Back in 2018, it was this same Sudden Stratospheric Warming that bought the Beast from the East to our shores, bringing widespread snow and ice.

Weather maps from WXCHARTS are predicting a fresh deluge of snow could hit England as early as the start of March. It is suggested that in some rural areas, weather maps suggest up to 26cm of snow could fall.

We would recommend that customers keep one eye on your oil levels over the coming weeks to avoid running low and to ensure you don’t run out. We would advise ordering your heating oil when you have ¼ of a tank left.

Cats Protection, Downham Market

Congratulations on winning 500 litres of heating oil! And thank you to all of our customers who took the time to vote for this very worthwhile good cause.

Goff Heating Oil are proud to aid local charities and good causes by providing them with a chance to win 500 litres of heating oil. You can find out more about the Goff Good Causes project and see past winners here.

Voting is now open, so here's your chance to pick your winner.....

•  

• Goff Heating Oil are proud to support local charities and good causes by providing them with a chance to win 500 litres of heating oil. You can find out more about the Goff Good Causes project and see past winners here.

Our regular prize draws are open to all good causes and once you have entered you will go into all future draws.

If you are one of our lucky winners, you can choose how you claim your prize of 500 litres of heating oil.

If you use oil in one of your buildings, then we can happily deliver this straight to you. Otherwise it can make a great prize for your next charitable auction.

We've delivered thousands of litres of oil over the last few years and winners have included Youth Clubs, Village Halls, Animal rescue centres, Hospices and Churches. 

If you are, or know of, a good cause that would like to win some free heating oil, please sign up on our charity page.

It's quick and easy.

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $86.81                Price at End of Month: $81.64

Highest Price in Month: $86.81                Lowest Price in Month: $76.14

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.2267                               End of Month: 1.2029

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 8.05 ppl

Market Commentary on the Newsfeeds:

Oil Market Report - December 2022 – Analysis - IEA

Highlights of the IEA report: 

Winter Blues

A weak macroeconomic environment and ample supply have knocked around $15/bbl off benchmark crude prices over the past month. The sell-off comes despite lower OPEC+ production, an EU embargo on Russian crude oil coming into full force and a relaxation of China’s Covid restrictions that could pave the way for a quicker demand recovery in the world’s second largest oil consumer. At the time of writing, ICE Brent futures were around $80/bbl while NYMEX WTI had slumped to $75/bbl.

Russian prices saw steeper declines. Urals in Northwest Europe fell nearly $30/bbl to $43/bbl by early December, well below the $60/bbl price cap finally agreed by G7, Australia and the EU. The price cap aims to facilitate trade with Moscow by allowing third-party buyers to use EU maritime services as long as they conclude purchases below that limit. But Russia maintains it would rather cut output than to sell oil to countries that impose the cap.

For now, Russian oil continues to flow. In November, total oil exports increased by 270 kb/d to 8.1 mb/d, the highest since April. Crude oil loadings were unchanged on the month at just over 5 mb/d, despite a 430 kb/d drop in shipments to Europe. By contrast, product flows (in particular of diesel) surged, including to Europe. Russian oil production rose 90 kb/d to 11.2 mb/d, just 200 kb/d below pre-invasion levels.

Along with a recovery in Kazakh and Nigerian production after months of operational challenges, that increase went some way to offset lower supply from other OPEC+ producers. The bloc cut its collective output ceiling by 2 mb/d from November, but actual crude production fell by only a quarter of that as most of the members were already producing well below their targets. As for non-OPEC+ countries, output rose for a third consecutive month and was up by an impressive 3.1 mb/d since the start of the year, largely due to strong performances in the US, Brazil and the North Sea.

Preliminary data show OECD crude oil stocks drew in November, reflecting a sharp rise in refinery demand. Global refinery runs surged by an estimated 2.2 mb/d last month, to 82.3 mb/d, the highest since January 2020. Increased supply of diesel and gasoline coincided with a seasonal lull in transport fuel demand, boosting product stocks which pulled refinery margins lower. In the US and Europe, diesel cracks made record monthly falls from October’s historical peaks, but remain high.

Despite the seasonal slowdown in world oil demand and continued macro-economic headwinds, recent oil consumption data have surprised to the upside. This was especially apparent in non-OECD regions, including China, India and the Middle East. By contrast, OECD oil demand remained depressed as weak European and Asian petrochemical activity outweighed ongoing gas-to-oil switching in manufacturing processes. Oil demand is now forecast to rise by 2.3 mb/d in 2022 and a further 1.7 mb/d next year, up around 140 kb/d compared with last month’s Report.

While lower oil prices come as a welcome relief to consumers faced by surging inflation, the full impact of embargoes on Russian crude and product supplies remains to be seen. As we move through the winter months and towards a tighter oil balance in 2Q23, another price rally cannot be ruled out. 

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

Last month’s oil market report can be found here:

Heating Oil Price and Oil Market Information November 2022 - Goff Petroleum

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

For the vast majority of eligible households, the Alternative Fuel Payments support will be received automatically via their electricity supplier with no need to take any action. However, it is anticipated that there will be a small number of households who are unable to receive the funding automatically, for instance households without a direct relationship with an electricity supplier. The Government will ensure there is a route for those households to apply for and receive the £200 support through a portal and more information on this is expected soon.

This payment is in addition to the Energy Bills Support Scheme (EBSS) non-repayable discount of £400, which you should’ve already started to receive as a credit to your electricity bill.  

All our Heating Oil customers should be aware of the following:

• Recipients have been identified by the Government using the off the gas grid database and recent census information.  

• The majority will receive their £200 automatically via their electricity supplier starting on February 6, in a similar fashion to other recent government payments (direct debit, credit to account or voucher).

• There will be some small exceptions – for example domestic properties that don’t have an electricity account or those that use oil but live in an area mainly served by the gas grid. The occupiers of these properties will need to apply via an online portal which will be open in February alongside a post code checker.

If you’re still concerned about the cost of heating your home, then our Monthly Payment Scheme can help spread the cost. For more information, please click HERE.

We hope you have the warmest, cosiest and happiest time.

For the vast majority of heating oil customers who have an electricity account no action is required, and the payment will be made automatically. For those customers without an electricity account and other exceptions, they will be able to apply through a governmental portal in February, once we know more, we shall share this information.

We would recommend that customers continue to purchase heating oil as normal over the coming months and keep one eye on your oil levels over the winter period, so you don’t run out. We would advise ordering your heating oil when you have ¼ of a tank left.

To read the governments article in full click here

The Government has said this money will come from your electricity supplier and will be added to your energy account as bill credit, but it hasn't said when yet. We believe that it is unlikely to be before the end of January 2023 at the earliest. As we find out more detail on the Alternative Fuel Payment we will endeavour to keep our customers updated.

While the logistic planning of the payment is still being completed, we would recommend that customers continue to purchase heating oil as normal over the coming months.

Please keep an eye on your oil levels over the winter period, so you don’t run out. We would advise ordering your heating oil when you have ¼ of a tank left.

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $94.78                Price at End of Month: $84.29

Highest Price in Month: $101.55              Lowest Price in Month: $80.28

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.1461                               End of Month: 1.1909

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 10.50 ppl

Market Commentary on the Newsfeeds:

Oil Market Report - November 2022 – Analysis - IEA

Highlights of the IEA November report:

• * Demand growth will slow to 1.6 mb/d in 2023, down from 2.1 mb/d this year, as mounting economic headwinds impede gains. The GDP outlook has worsened and 4Q22 global oil use will contract (-240 kb/d) compared with last year. China’s persistently weak economy, Europe’s energy crisis, burgeoning product cracks and the strong US dollar are all weighing heavily on consumption.

• * World oil supply rose 410 kb/d in October to 101.7 mb/d but is forecast to fall by 1 mb/d for the remainder of the year as OPEC+ cuts and an EU ban on Russian crude come into effect. Annual growth of 4.6 mb/d this year is set to boost global production to 99.9 mb/d. Modest gains of just 740 kb/d in 2023 will push supply to 100.7 mb/d.

• * Global refinery throughputs in October fell by 500 kb/d m-o-m to 80.4 mb/d, with a 1.1 mb/d decline in the Atlantic Basin partly offset by higher runs East of Suez. New refinery capacity coming online will go some way to offset potential losses from Russia. Refinery runs are forecast to increase by 2.3 mb/d in 2022 and 1.4 mb/d next year. Diesel cracks surged to new records, keeping margins at elevated levels.

• * Russian oil exports rose by 165 kb/d to 7.7 mb/d in October as shipments to the EU, China and India held up and lower flows to Türkiye were more than offset by increases to yet to be identified destinations. Crude oil exports to the EU crude were 1.5 mb/d, 1 mb/d below pre-war levels. Product exports were down 300 kb/d, to 1 mb/d, including 600 kb/d of diesel. Export revenues rose by $1.7 bn to $17.3 bn.

• * Global observed inventories fell by 14.2 mb in September as OECD and non-OECD stocks plunged by 45.5 mb and 19.3 mb, respectively, but were partially offset by a surge in oil on the water of 50.6 mb. OECD industry oil stocks declined by 8 mb, while government stocks drew by 37.4 mb. OECD total oil stocks fell below 4 000 mb for the first time since 2004.

• * In October, North Sea Dated posted its first increase in four months, rising $3.35/bbl to $93.11/bbl as signs of a tight market prevailed over economic uncertainty. Oil prices remain about 30% below their June peak. Brent backwardation weakened slightly while open interest continued to languish near seven-year lows. Freight rates rose on higher exports and as the shift away from Russian barrels increased tension on available fleet capacity.

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

To catch up on last month’s oil market report click here:

Heating Oil Price and Oil Market Information October 2022 - Goff Petroleum

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

Heating Oil Price and Oil Market Information October 2022

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $90.00                Price at End of Month: $93.05

Highest Price in Month: $98.50                Lowest Price in Month: $87.58

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.1280                               End of Month: 1.1514

Kerosene (Heating Oil) Cargo Price $ per tonne  

Start of Month: $983.50                             End of Month: $1041.50

Highest Price in Month: $1186.25            Lowest Price in Month: $983.50

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 15.49 ppl

Market Commentary on the Newsfeeds:

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

Last month’s oil market report can be found here:

Heating Oil Price and Oil Market Information September 2022 - Goff Petroleum

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

How do I get my £100 heating oil payment?

In a nutshell, the £100 heating oil payment will be provided to off the gas grid homes in a similar fashion to the wider Energy Bills Support Scheme. It has been confirmed that the payment will be provided directly to you via your electricity provider. 

The government shared this quote:

“This scheme is intended to deliver a one-off payment of £100 to UK households who are not on the mains gas grid and therefore use alternative fuels, such as heating oil, to heat their homes. Powers will enable the government to deliver support via electricity bills in both GB and NI, under a similar delivery model to the Energy Bills Support Scheme. The payment will ensure that a typical customer using heating oil does not face a higher rate of growth in their heating costs since last winter, in comparison to those using mains gas, who are supported by the Energy Price Guarantee. The government will set out the timing of this payment soon.”

The Energy Price Bill Document (11/10/22)

You can find the full government document of The Energy Price Bill here.

UKIFDA, the trade body for the liquid fuel distribution industry, followed the government statement on heating oil up with its own announcement:

“UKIFDA, notes the government’s announcement this morning confirming that the £100 fixed payment to heating oil users will be made via electricity companies.

Through multiple discussions with the government, it became clear that because of the highly competitive nature of the heating oil market, where customers hold multiple accounts across different distributors and outlets, a quick method of payment through these accounts without duplication was not possible.

We will continue to offer assistance to the government in the design of the payment system through electricity companies. This will take time, and customers should await further details from the government.

We also note that eligible customers that do not have a relationship with an electricity supplier will be supported through an alternative route to make sure they do not miss out. Details of this alternative route will be confirmed by the government shortly.

As before, we recommend that customers do not wait if they need heating oil. As we head into winter, many oil heating customers will know that the best and most economical approach is to talk to their local distributors on a regular basis and not leave purchases to the last minute.”

UKIFDA (12/10/22)

How will the £100 be paid to me?

As with the wider Energy Bills Support Scheme model, we’ve highlighted the ways in which you are likely to receive the funds. This is based on how you currently pay for your electricity; all methods will be automatic and you do not need to register.

Payment Methods 

Direct debit

The £100 will automatically be credited into the account you use to pay for your energy.

Credit or payment card

If you usually use a credit or a payment card to pay for your electricity, then the £100 payment will be added as credit.

Smart prepayment meter

The £100 heating oil payment will be credited to your smart prepayment meter.

Traditional prepayment meter

Based on The Energy Bills Support Scheme model for gas homes, a voucher or automatic credit will be applied when the household completes its top-up. However, the government has not yet clarified the process for those using a traditional prepayment meter for off-the-gas grid homes.

When do I get my £100 heating oil payment?

As suggested earlier we do not know when the payments will be made but we would like to warn all our customers that scammers are already trying to swindle customers out of these payments.

Stay safe from scammers

Please be aware that scammers are trying to cash in on the Governments £400 energy bill support and the £100 heating oil payment. Watch out for fake text messages and e-mails that claim to be from the Government, inviting you to apply for the energy bill support.

These are a scam – the money will be paid to you automatically via your electricity supplier. You do not need to apply, and you definitely do not need to share your bank or credit card details.

The government will not ask for this level of information via text. Any government energy support funds will be applied automatically.

Here's an example of the scam text:

Here's how you can report a wide variety of scams quickly

The National Cyber Security Centre (NCSC) sets out a number of different ways to report scams depending on the type:

• Emailed scams. If you get a dodgy looking email, you can report it to the NCSC by forwarding it to report@phishing.gov.uk. Remember not to click on any links within these emails.

• Text scams. If you get a suspicious text message, you can forward it to the number 7726 – this will allow your provider to track the origin of the text and arrange to block or ban the sender if it's a scam. You can also report scam text messages to report@phishing.gov.uk – remember to provide a screenshot of the text message.

Heating Oil Price and Oil Market Information September 2022

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $92.34                Price at End of Month: $87.27

Highest Price in Month: $93.23                Lowest Price in Month: $84.42

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.1527                               End of Month: 1.1163

Kerosene (Heating Oil) Cargo Price $ per tonne  

Start of Month: $1111.25                          End of Month: $964.75

Highest Price in Month: $1175.00            Lowest Price in Month: $964.75

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 14.47 ppl

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

Last month’s oil market report can be found here:

Heating Oil Price and Oil Market Information August 2022 - Goff Petroleum

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

You can read the full UKIFDA Statement below.

UKIFDA, the trade body for the liquid fuel distribution industry, has met with the government to discuss the most efficient way of getting the £100 fixed payment announced on 19th September to heating oil customers.

Given the highly competitive nature of the heating oil market, customers have the ability to purchase from a number of different distributors and outlets. Consequently, they are likely to hold multiple accounts, which makes the fixed payment distribution challenging to deliver without duplication.

Inevitably this will take some time, so we strongly recommend that customers do not wait if they need heating oil. We are working closely with the government to find a solution and ensure that heating oil households receive their £100 as soon as possible.

UKIFDA’s key piece of advice here is:

Inevitably this will take some time, so we strongly recommend that customers do not wait if they need heating oil.

UKIFDA also say:

As we head into winter, many oil heating customers will know that the best and most economical approach is to talk to their local distributors on a regular basis and not leave purchases to the last minute.

Here at Goff Heating Oil we agree whole heartedly and would recommend planning ahead and not delaying your order as the industry gets busier in the colder months.

If you believe that paying for your heating oil in one go may become challenging, we highly recommend starting a pay monthly account as soon as possible to build up credit in advance of your order. To find out more about our Budget Plan click here: Goff Heating Oil Pay Monthly Plan

Ringsfield Hall Trust

Garboldisham Village Hall

Little Thetford Village Hall

West Row Village Hall

The Great Bromley Cross pub

Narborough Community Centre

Tolleshunt Knights Village Hall

Slinfold Village Hall

Hamstreet Victory hall

Reedham Village Hall

Voting on Facebook is now open, so here's your chance to pick your winner. Every vote really does count!

Goff Heating Oil are proud to support local charities and good causes by providing them with a chance to win 500 litres of heating oil. You can find out more about the Goff Good Causes project and see past winners here.

Heating Oil Price and Oil Market Information July 2022

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $106.89                            Price at End of Month: $96.17

Highest Price in Month: $106.89                            Lowest Price in Month: $92.42

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.2282                              End of Month: 1.1636

Kerosene (Heating Oil) Cargo Price $ per tonne  

Start of Month: $1088.08                          End of Month: $1159.50

Highest Price in Month: $1254.75            Lowest Price in Month: $1091.75

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 20.06 ppl

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

Last month’s oil market report can be found here:

Heating Oil Price and Oil Market Information July 2022 - Goff Petroleum

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

We couldn't have done it without you! 

To find out more about the other charities Goff Good Causes have supported click here.

Heating Oil Price and Oil Market Information July 2022

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $121.59                            Price at End of Month: $113.63

Highest Price in Month: $124.67                            Lowest Price in Month: $106.26

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.2005                              End of Month: 1.2169

Kerosene (Heating Oil) Cargo Price $ per tonne  

Start of Month: $1282.75                          End of Month: $1161.75

Highest Price in Month: $1282.75            Lowest Price in Month: $1093.25

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 11.73 ppl

Market Commentary on the Newsfeeds:

The West Rushes To Curb Russian Oil Revenue Without Increasing Prices

* The West is scrambling to curb Russia’s oil revenue as Putin’s war in Ukraine continues to rage.

* The EU, U.S. and G7 partners are looking to find a solution to the complex undertaking and reduce the money flowing into Russia without sending oil prices even higher.

* Until the West comes up with a mechanism to curb Russian oil revenues Russia will continue to benefit from the rallying oil prices and market turmoil.

The United States, the EU, and G7 are already shunning and banning Russia’s oil in the wake of the Russian invasion of Ukraine. But the West has failed to limit the most significant contribution to Vladimir Putin’s war chest—oil revenues. 

The U.S. and the EU, plus the G7 partners the UK, Canada, and Japan, are scrambling for solutions to their complex undertaking to reduce the amount of money flowing to Russia without sending international oil prices soaring to records. 

Various mechanisms are being studied and reviewed, including a price cap or some sort of an import tariff on Russian oil. None has been agreed upon yet, as the Western nations are apprehensive of driving oil prices up too much, which would not only batter their economies but also give Putin more revenue even if Russia curbs more of its exports.

The Western leaders are looking for ways to keep the oil flowing while reducing Putin’s revenues. This is a complex and very difficult task, analysts say.

“So, the world will have to come to grips with ways of sanctioning the money flows to Russia if that is their desire without stopping the oil flows,” Mike Muller, head of Asia at the world’s largest independent oil trader, Vitol, said on the Gulf Intelligence podcast on Sunday.

“How it is to be done is awfully, awfully difficult,” he added.

According to the Vitol executive, “The world is facing a political desire to implement measures to restrict the supply of Russian oil, but the total supply of Russian oil is too large for the world to do without.”

“The world cannot do without 7 to 8 percent of its total fossil fuel supply,” Muller said.

Russia earned $98 billion (93 billion euros) in revenue from fossil fuel exports in the first 100 days of the war in Ukraine, with the EU paying 61% of this for imports, according to data compiled by the Centre for Research on Energy and Clean Air (CREA). Russia spends an estimated $900 million per day on the invasion of Ukraine, and the revenue from fossil fuel exports exceeded this sum during the first 100 days, CREA said.

As the EU aims to reduce Russia’s oil revenues by imposing an embargo on seaborne oil imports from Russia, Moscow is redirecting more volumes to Asia. China and India, and other smaller importers in Asia, are buying growing volumes of discounted Russian oil. Even at a $30 a barrel discount to Brent, the $110 Brent oil price means that Russian oil is fetching much more money than it did last year. This is essentially blunting the embargoes in the West as an instrument of cutting Russian oil revenues, which make up a very large part of total government revenues and budget income. 

After their summit in Germany last week, the leaders of the G7 group of the world’s leading industrial nations invited all importing countries to consider a cap on the price of Russian oil.

It’s not certain how this could be achieved without additional market disruption that could send oil prices higher still.

Record oil prices are the least the G7, including the United States, want right now. Higher crude prices add fuel to the runaway inflation, and talk about recession intensified after the Fed and other central banks hiked aggressively key interest rates to combat the steepest rise in consumer prices in decades.

Until the West comes up with a mechanism to curb Russian oil revenues—if it ever manages to do this—Russia will continue to benefit from the rallying oil prices and market turmoil. Unfortunately for the Western oil importers, Russia’s exports of oil and gas are too big to ban completely, even if, in theory, G7 and the EU manage to convince India and China to reduce imports of Russian oil under the threat of secondary sanctions. Policymakers will need a lot of creativity in their approach that could leave most of the Russian oil flowing but cut the oil money flowing to Putin.

By Tsvetana Paraskova 4^th July 2022

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

Last month’s oil market report can be found here:

Heating Oil Price and Oil Market Information June 2022 - Goff Petroleum

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

It's Norfolk day and we're raising money for the Samaritans 

For every order we receive today we will make a donation to Norwich Samaritans.

Can you help us reach our £500 target?

Order online or call our friendly team on 01953 713555. 

Heating Oil Price and Oil Market Information June 2022

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $116.29                            Price at End of Month: $114.81

Highest Price in Month: $123.58                            Lowest Price in Month: $110.05

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.2497                              End of Month: 1.2145

Kerosene (Heating Oil) Cargo Price $ per tonne  

Start of Month: $1358.00                          End of Month: $1235.50

Highest Price in Month: $1475.25            Lowest Price in Month: $1235.50

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 9.93 ppl

Market Commentary on the Newsfeeds:

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

Last month’s oil market report can be found here:

Heating Oil Price and Oil Market Information May 2022 - Goff Petroleum

Goff Good Causes are raising money for the Samaritans and celebrating our Norfolk roots! 

The Goff name and business can be traced back to 1888 when Herbert Goff began the business in Norfolk. To celebrate our roots we have again decided to extend our Goff Good Causes programme.

This Norfolk Day (27th July 2022) we are pledging to make a donation of £1 for every heating oil order placed with the money raised going to the Samaritans to support the fine work they do.

Can you help us reach our £500 target? 

Learn more about our chosen cause here.

Will Goff commented

“HVO has no maintenance or fuel economy implications, and you can mix it with fossil diesel in a bulk tank. So far, our trial has gone smoother than we could have possibly imagined, and the potential carbon savings could be huge”.

The UK Government aims to reduce vehicle greenhouse gas emissions to net zero by 2050 under its Road to Zero strategy. HVO, while not the full solution, could offer a stepping-stone while other technologies are developed.

HVO Renewable Diesel has been officially certified as a sustainable fuel by the International Sustainability and Carbon Certification (ISCC), has previously been used and tested in diesel engines, offering net greenhouse gas CO2 reductions of up to 90% in such engines. It is also a non-toxic and non-carcinogenic.

Truck maker DAF is a big supporter of HVO fuels. Phil Moon, UK marketing manager at DAF commented:

“Let’s suppose you run a truck that covers 100,000 miles annually at an average 10mpg, which means it burns 10,000 gallons/45,400 litres of fossil diesel a year. That means it emits 121.6 tonnes of CO2 yearly, but if you switch to HVO you can cut that figure by 109.5 tonnes.”

Keep your eyes peeled for the green machine as it delivers to customers across East Anglia.

HVO fuel at a glance:

FOSSIL FREE – a renewable and sustainable fuel

Up to 90% lower greenhouse gas emissions

Can be mixed with regular diesel

Carbon offset delivery mileage

Heating Oil Price and Oil Market Information May 2022

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $106.07                            Price at End of Month: $124.45

Highest Price in Month: $124.45                            Lowest Price in Month: $103.93

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.2511                              End of Month: 1.2603

Kerosene (Heating Oil) Cargo Price $ per tonne  

Start of Month: $1340.00                          End of Month: $1350.75

Highest Price in Month: $1360.00            Lowest Price in Month: $1164.25

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 13.29 ppl

Market Commentary on the Newsfeeds:

The focus on the market commentary this month is “the impact of the war beyond oil”:

Global Supply Chains Will Never Be “Normal” Again

*The fallout from the COVID-19 pandemic’s impact on global supply chains has changed the way the world approaches trade.

*Supply chains will likely remain under constant threat of disruption over the next decade.

*Tightening supplies, high energy costs, and growing geopolitical risks are forcing countries to develop new technology to help mitigate supply chain challenges.

The conventional wisdom at this time is that most of the world has moved on from the pandemic (except for China); therefore, supply chains will return to “normal.” Unfortunately, this is not the case. The world has permanently changed and supply chains are going to face continuing challenges for decades to come. Among those challenges are:

Supply chains will remain under constant threat of disruption for the next decade

Supply chains operate best when the world is peaceful and stable

A smoothly running supply chain requires “buffer stock,” which is challenging with declining population demographics

There is a conflict between environmental, social and governance (ESG) goals and supply chains optimized for cost and speed. If we prioritize ESG, we will need to contend with supply chain risks

Supply chain technology will become the big venture capital category winner as companies continue to make investments in technologies that can help them mitigate their supply chain challenges

In a world faced with the prospect of tightening supplies, higher energy costs, heightened geopolitical risk, and strained transportation networks, advanced supply chain technologies will become mission-critical for many more companies.

Supply chains benefit from times of peace

Anyone that has been a part of the supply chain industry can attest to the fact that supply chains have always been subject to disruptions. Natural disasters, terrorism, economic cycles, and capacity shortages have created challenges since the beginning of trade.

Since the end of the Cold War, global supply chains have benefited from peaceful trade between developed and developing countries. Many poorer and less developed countries that were previously ruled by Communist or autocratic regimes took advantage of new markets in the developed world and used global trade to move beyond subsistence economies to prosperous ones. Some of these countries developed into capitalistic and democratic countries, while other governments exploited the free market system to solely benefit those already in power, and became wealthy and powerful enough to threaten the very system that enabled their ascension.

The Eastern European countries that were formerly part of the Soviet bloc are examples of the countries that embraced capitalism and shifted toward democracy, while China did the opposite.

Labour is key in supply chains

The arbitrage between the developed and developing countries has been massive. The cost of producing goods in countries with cheap labor, lax environmental and labor regulations, and little regard for sustainable natural resources has enabled the world to enjoy unprecedented prosperity and peace.

Because the goods produced in these parts of the world were so cheap, it made sense that they would be produced in excess. This buffer stock kept inflation in check and provided supply chains with ample supplies that could fend off short-term fluctuations and disruptions. Think about how the cost of televisions and computing hardware has fallen over the past few decades, and how auto prices haven’t risen as significantly as the many improvements in product features and quality were made.

This all happened at a time when the United States was the only superpower and the only expectation that the U.S. had of other nations is that trade should be unobstructed.

Cheap labour is becoming scarcer, particularly in Asia. This is largely due to aging populations – the average age continues to increase and there are fewer people to work in these manufacturing jobs.

ESG requirements hamper the stability of supply chains

Companies have instituted ESG requirements that require disclosures and monitoring of how and where products have been sourced. This pressure means that goods that are produced in factories that don’t match Western standards for environmental controls and human rights may not be available to Western consumers. The factories that do produce goods that match Western standards will often be more expensive and therefore there will be less buffer stock in the system. 

The same ESG standards also create challenges for commodity producers, as the cost of adhering to environmental and social disclosures makes it more expensive and less productive. It also discourages investment in the production of environmentally sensitive commodities – most obviously in energy.

Environmental concerns and regulations that have prevented exploration and production and killed pipeline projects are largely the reason that the world currently lacks sufficient energy resources to buffer against the consequences of the Russia-Ukraine war.

In the previous three decades, supply chains have operated relatively smoothly because companies could source from around the world and not have to worry about global military conflict or autocratic regimes shutting down manufacturing. While international trade regulations were complicated to navigate, the world overall was trending toward larger, more open trading blocs – not just in North America, but in Europe and Asia as well.

As the United States has become more insular and has pulled back from being the world’s policeman, and China has started to flex its muscles and create a global competitor to the United States, the world has become far more unstable and less peaceful. This global friction is unlikely to go away. China desires to take Taiwan as its own, risking sending the world into a geopolitical crisis that is more dangerous than at any point since World War II.

Buffer stocks of products are far less likely in the future, as the cost of producing those items continues to rise. Cheap labour, offered by large populations of young people, is largely a thing of the past. This will make it more expensive for companies to produce buffer stock and far less likely that supply chains will enjoy the ability to absorb short-term shocks that are inherent to complex global networks.

Supply chain technology will be the big winner

Companies will look closer to home for product sourcing. They will prioritize production in countries that are far more stable and friendly to the United States. The Freedom Trade movement will drive supply chain professionals to prioritize production and sourcing in the Americas.

Latin America will become a big winner, as it benefits greatly from having direct land transportation networks with North America and seas that are well protected by the U.S. Navy.

The American South and Midwest will also see an acceleration in manufacturing and production, as they can offer predictable and resilient sourcing, without the geopolitical risks of foreign suppliers or the labor unions of the Rust Belt.

Automation, including robotics, will become more important. Nearshoring manufacturers will try to offset higher production costs with robotics and other automated production systems.

Supply chain market intelligence systems, a data category that monitors developments around supply and demand, will be critical for supply chain professionals who are trying to navigate increasingly complex and opaque markets. Materials and product supplies are no longer guaranteed, so the need for constantly refreshed data models that track the balance of supply and demand will be critical to the success of companies.

FreightWaves SONAR provides near real-time market intelligence information, which has seen explosive growth in recent months as shippers have realized that supply chains are not returning to normal and the need for high-frequency data is increasingly critical for success. Historical models no longer work – as the world becomes far less predictable, peaceful, and safe – and supply chains are far more exposed to supply and demand shocks.

By Craig Fuller, CEO at FreightWaves 

U.S. Secretary Of State Accuses Russia Of Using Food As A Weapon

Russia has been accused of ‘weaponizing’ food and holding grain for millions of people around the world hostage to “break the spirit of the Ukrainian people”.

U.S. Secretary of State Antony Blinken told a UN Security Council meeting called by the United States that the war has halted maritime trade in large areas of the Black Sea and made the region unsafe for navigation, trapping Ukrainian agricultural exports and jeopardising global food supplies.

Blinken said the meeting, which he chaired, was taking place “at a moment of unprecedented global hunger” fueled by climate change and Covid-19 “and made even worse by conflict”.

Since Russia’s invasion on February 24, he said, its naval operations have sought to control access to the northwestern Black Sea and the Sea of Azov and to block Ukrainian ports which the United States assesses to be “a deliberate effort” to block safe passage and shut down shipping.

“As a result of the Russian government’s actions, some 20 million tonnes of grain sit unused in Ukrainian silos as global food supplies dwindle, prices skyrocket, causing more around the world to experience food insecurity.”

-Anthony Blinken

Russia’s UN Ambassador Vassily Nebenzia dismissed as “absolutely false” claims by the U.S. and Western nations “that we want to starve everyone to death and that only you and Ukraine allegedly care about how to save the lives of the country”.

“You assert that allegedly we are preventing agricultural products from being taken out of Ukraine by sea,” he said.

“However, the truth is that it is Ukraine and not Russia that has blocked 75 vessels from 17 states in the ports of Nikolaev, Kherson, Chernomorsk, Mariupol, Ochakov, Odesa and Yuzhniy and has mined the waterways.”

Nebenzia warned: “Unless this issue is resolved, we cannot speak of any opportunities to export Ukrainian grain by sea.”

By Zerohedge.com

UK Energy Bills Could Surge By Another 42% In October 

UK Energy Bills Could Surge By Another 42% In October

The UK hasn’t seen the worst of its cost-of-living crisis as energy bills could soar by another 42% in less than six months’ time when the energy regulator will raise the so-called energy cap again.

The UK has an Energy Price Cap in place, which protects households from excessively high bills by capping the price that providers can pass on to them. But as the price cap was raised by 54% in April —because of the high energy prices in the six months prior to the decision for the increase made by energy market regulator Ofgem in February—households are increasingly struggling to pay their energy bills.

The cap is now at $2,461 (1,971 British pounds) a year, but is likely to rise in October to $3,496 (2,800 British pounds) a year, Ofgem’s chief executive officer Jonathan Brearley said today. 

“We are only part-way through the price cap window but we are expecting a price cap in October in the region of 2,800 pounds,” Brearley told the Business, Energy and Industrial Strategy Committee in Parliament on Tuesday.

The expected rise in October would be a 42-percent jump compared to the current energy cap, which would additionally burden millions of UK consumers.

Soaring energy prices are hitting UK households and energy providers in a market that has realized that the cost-of-living crisis is not going away soon and will get even worse come next winter.

Skyrocketing gas and power prices since the autumn of 2021, pushed even higher by the Russian invasion of Ukraine early this year, have made paying the energy bills difficult for millions of Britons, while utilities are piling up losses and billions of pounds of unpaid bills. 

In April, the situation grew worse when the so-called Energy Price Cap was raised by more than 50 percent, doubling the number of fuel-stressed households in the UK overnight.

The cost of living crisis “is going to get truly horrific” in October, when the twice-yearly-adjusted price cap is set to spike again, Keith Anderson, chief executive at one of the largest providers, ScottishPower, told a Parliament committee last month. 

“We are seeing an uptick now, but it will get worse—a lot worse—without any further intervention, come October,” Chris O’Shea, CEO at British Gas owner Centrica, told the same committee.    

By T Paraskova 24^th May 2022

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

Last month’s oil market report can be found here:

Heating Oil Price and Oil Market Information April 2022 - Goff Petroleum

By August 2019 it found that this nice little earner had a potential to deliver more profit per transaction and increased the cost to £3.49 per order placed. We estimated back then that Boilerjuice could've been earning an extra £1 million every year from it's customers by charging them to place an order on their platform and then handing that order to a real distributor to deliver.

Today in Boilerjuice's Payment Help section What is the service charge? (boilerjuice.com) the charge continues to be explained as:  

"A service charge (typically £3.49)  is applied to each order of heating oil or gas oil (red diesel) placed on our website or over the telephone.

This charge supports our continued investment in six days a week customer service, and improving our website to make your experience easier and more convenient. We keep a close eye on our prices and fees to make sure we always deliver great value."

However what is described in their own help section as typically being £3.49 is now actually £9.98 according to this 1* trustpilot review.

So now Boilerjuice have increased their typical £3.49 service charge by another £6.49 to collect nearly £10 every time you order with them. All to fund their continued investment in technology and service whilst having the cheek to suggest that an additional fee allows you, their customer, to save time & money on their heating oil!

And to then increase this fee by nearly 300% when two thirds of adults in Britain are reporting that the rising cost of energy is causing an incredible squeeze on household budgets is frankly staggering.

As a real heating oil distributor we think it's sad that a broker taking hundreds of orders per day uses each and every one of those orders to squeeze more from their suffering customers to boost the coffers of their private equity owners. 

To top up your tank without substantial and sneaky service charges call or click Goff Petroleum now.

Better price, better service, better use GOFF.

Heating Oil Price and Oil Market Information April 2022

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $107.52                            Price at End of Month: $108.26

Highest Price in Month: $108.26                            Lowest Price in Month: $97.48

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.3108                              End of Month: 1.2555

Kerosene (Heating Oil) Cargo Price $ per tonne  

Start of Month: $1158.75                          End of Month: $1380.00

Highest Price in Month: $1380.00            Lowest Price in Month: $1148.75

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 19.66 ppl

Market Commentary on the Newsfeeds:

Is Today’s Energy Shortage Worse Than The 1970s Oil Crisis?

When Middle Eastern oil producers declared an oil embargo on exports to the U.S. in 1973, oil prices soared and the U.S. experienced significant fuel shortages.

Today’s energy crisis, which includes not only oil but also natural gas and coal, could be even worse than the infamous oil crisis of the 1970s.

The current energy crisis could soon be made worse as the EU moves to ban Russian coal and the U.S. struggles to meet its LNG commitments.

In 1973, after the Yom Kippur war between Israel and a coalition of Arab countries, Middle Eastern oil producers declared an embargo on oil exports to the United States as punishment for its support of Israel. What followed was an energy crisis of epic proportions.  According to Daniel Yergin, the current energy crisis could be worse.

In the 1970s oil crisis, 1970s Energy Crisis - Causes, Effects, OAPEC - HISTORY the price of oil soared fourfold over three months following the embargo. At the time, the United States had thought that the lost market share would hurt the producer states financially. But instead, those producers made up for that market share loss with considerably higher prices.

Consumers in the United States, however, suffered a severe blow in the form of fuel shortages and urgent energy conservation measures as the country’s consumption of oil had been growing incessantly for decades thanks to the cheap Middle Eastern oil.

Interestingly, although the embargo did not involve Europe, the continent suffered an even more severe blow because of the way prices rose following the Arab producers’ move. Fuel rationing was put in place and national speed limits were introduced to conserve fuel.

The latter measure, about speed limits, may sound familiar to those following the International Energy Agency’s recommendations for energy conservation: it is one of the ten steps the IEA listed as necessary to reduce the EU’s reliance on Russian fossil fuels.

The fact that today’s shortage involves all the fossil fuels rather than just oil is one of the reasons this crisis could be worse than the one in the 1970s, according to Yergin, who made his comments in an interview with Bloomberg this week.

“I think this is potentially worse,” the expert told Bloomberg. “It involves oil, natural gas, and coal, and it involves two countries that happen to be nuclear superpowers.”

Leaving aside the understandable unease that the latter part of the statement would spark in anyone in Europe or North America, the first one is telling. Europe depends on Russia for close to half of its coal and natural gas imports and about a quarter of its crude oil imports. And the EU just decided to ban Russian coal imports in an attempt to hurt the Russian economy as punishment for Russia’s actions in Ukraine.

Here’s what happened after the announcement of the ban, which has yet to be approved, by the way. Indonesia hiked its own coal prices by 42 percent, Australian coal miners reported they have limited ability to replace Russian coal, and Asian coal prices soared amid reports that European buyers were hunting for replacement coal.

What’s happening in coal is pretty much what will be happening in oil and gas. As Yergin noted in his interview with Bloomberg, the global natural gas market is already quite tight, and there is no ready replacement for Russian gas should it stop flowing. That’s despite efforts on the part of U.S. LNG producers to boost exports.

Another energy expert, David Blackmon, went a step further this week on the Energy Transition podcast, saying that the U.S. did not have the physical means to fulfill the promise President Biden made to the EU of supplying an additional 15 billion cubic meters of gas in the form of LNG. Blackmon noted the time it takes to boost gas production and expand liquefaction capacity as well as the limited LNG tanker fleet and already existing LNG export commitments to other buyers.

In this environment of tight fossil fuel supply and demand that seems to significantly exceed this supply, things are already critical without any oil or gas embargos, which a senior EU official mentioned might become “necessary” at some point. The cost of living is rising across the continent, and governments are struggling to rein it in. If the EU goes down the embargo road the results could be disastrous, as virtually every analyst has been warning for weeks.

By Irina Slav 7th April 2022 for Oilprice.com

Russia Sees Steepest Oil Production Decline Since May 2020 In Early April

Russian oil production fell in the first week of April by 4.5 percent compared to the March average—the steepest decline in output since May 2020, according to Russia’s energy ministry data seen by Bloomberg.

Between April 1 and 6, Russia pumped the equivalent of 10.52 million barrels per day (bpd) of oil, per Bloomberg calculations based on energy ministry data in tons. That’s some 500,000 bpd below the average Russian production for the whole month of March. If the trend continues throughout April, Russia could see its biggest monthly drop in oil production since May 2020, when it started voluntarily slashing its output as part of the OPEC+ deal. 

Buyers in the West continue to steer clear of Russian oil cargoes, and many analysts say it is a matter of time before at least some Russian supply comes off the market, despite the fact that signs are emerging that most of Asia is still buying Russian crude, at hefty discounts.

Russia’s production in March had already declined from February, albeit by a small margin. Russia pumped the equivalent of 11.01 million bpd of crude oil and condensate in March, according to Bloomberg calculations based on a report by Russian news agency Interfax. That’s 0.6 percent lower than the production in February.

The decline in March was the first such drop since August 2021, when a fire at a Gazprom processing plant in West Siberia held back some condensate production.

A report from last week also suggested that Russian oil production inched down in March from February, signalling that OPEC’s key partner in the OPEC+ deal has failed to take advantage of its some 100,000-bpd monthly increase allowed under the agreement.

In another sign that Russia could be struggling to sell all of its cargoes, Transneft, the Russian oil pipeline operator, has informed local oil companies that it would be capping the intake of yet-to-be-sold crude because of full storage, Reuters reported last week, quoting sources with knowledge of the plan.

By Charles Kennedy 7^th April for Oilprice.com

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

Last month’s oil market report can be found here:

Heating Oil Price and Oil Market Information March 2022 - Goff Petroleum

Voting is now open, so here's your chance to pick your winner by voting on Facebook. Don't forget, this time we're giving away free heating oil to the top three winners, so every vote really does count!

Don’t forget to like our Facebook page, share the poll page, comment on the post and invite your friends and the wider community to vote in aid of your local good cause – every vote counts!

Goff Heating Oil are proud to support local charities and good causes by providing them with a chance to win 500 litres of heating oil. You can find out more about the Goff Good Causes project and see past winners here.

Heating Oil Price and Oil Market Information March 2022

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $103.26                            Price at End of Month: $109.98

Highest Price in Month: $137.32                            Lowest Price in Month: $103.26

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.3352                              End of Month: 1.3574

Kerosene (Heating Oil) Cargo Price $ per tonne  

Start of Month: $990.00                                           End of Month: $1137.75

Highest Price in Month: $1380.50            Lowest Price in Month: $969.25

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 25.23 ppl

Market Commentary on the Newsfeeds:

Brace For High Oil Prices, Inflation, And An Economic Slowdown

• *The global economy had only just begun to recover from the pandemic when Putin decided to invade Ukraine, sending oil prices soaring.

• *Hedge funds and analysts appear very bullish on oil prices, with predictions varying from $150 all the way up to $300 oil.

• *If things continue as they currently are, the Fed may well be forced to raise rates while going into a recession, and consumers will have to brace for more pain.

•  

With Brent crude climbing steadily towards $130 per barrel, fears of an economic slowdown and even a slip into recession have reared their heads among traders, very likely reinforced by warnings of food supply troubles because of the war in Ukraine. It seems like everything is going wrong at the same time.

Oil prices soared as soon as Russia invaded Ukraine in what it euphemistically called a “special military operation” aimed at “demilitarizing” its eastern neighbor. As the conflict escalated and the West began implementing sanctions on Moscow, fears grew over potential action against Russia’s oil industry, which supplies around 7 percent of the world’s crude and is the biggest exporter of crude oil and oil products taken together.

Talks about oil sanctions marked the start of the week, and the market response was a sharper rise in oil prices. So far, nothing surprising. According to data about hedge fund buying activity in oil contracts, however, there are fears of a global economic slowdown, and while also unsurprising, this is most unwelcome.

In his weekly column on hedge funds and oil buying, Reuters’ John Kemp said the industry remained very bullish on oil, with the ratio to bearish positions at 7:1. This ratio signals that hedge funds are following recent geopolitical events in Europe closely, but they will be watching for demand destruction as oil prices remain elevated.

As oil prices rise, eventually, they tend to reach a certain point when demand destruction begins either through fuel conservation, as Reuters’ Kemp noted in his column, or simply because expensive fuels make everything else more expensive and discourage spending.

Yet such a trend would come at a very bad time for world economies. While news about Covid-19 all but dried up overnight with the Ukraine invasion, economies are still struggling with the pandemic. The United States, the world’s largest oil consumer as well as producer, booked an inflation rate of 7.5 percent for January—the highest in almost 40 years—and analysts now expect this to have risen closer to 8 percent in February.

Meanwhile, oil is not the only commodity on the rise. Wheat prices hit a record high amid the Russian-Ukraine conflict as the two are major exporters. Russia, the world’s largest exporter of the staple, has been heavily sanctioned in ways that make it a challenge to lift wheat cargos from the country. The 50-percent jump in wheat prices since the start of the invasion is making wheat more unaffordable. Add food insecurity to soaring oil prices, and a recession looks increasingly likely for many economies.

Perhaps even worse is the fact that, according to some analysts, this is not the end of the rally for oil. Giovanni Staunovo from UBS, for instance, forecast oil could stabilize around $125 per barrel unless the war drags on, in which case disruptions to global supply would persist, pushing oil to $150 per barrel.

According to Russia’s Deputy Prime Minister Alexander Novak, if the West sanctions Russian oil exports, the price for the commodity could reach $300 per barrel, and although this is quite an unlikely scenario, in reality, oil prices do seem to have quite a while left to rise.

The way things are going now, $200 per barrel is a clear possibility, according to Jeffrey Gundlach from investment firm DoubleLine. Speaking to TIFIN, Gundlach said that oil is on its way to $200, and the Fed may be pressed to raise rates while the country is going into a recession, which, he noted, had never been done before. Gundlach also said it was time to admit the U.S. was going into stagflation, and the latest increase in gas prices was only the beginning of the pain.

By Irina Slav for Oilprice.com 8th March 2022

Europe Is Rushing To Overhaul Its Energy Security Strategy

By Tsvetana Paraskova for Oilprice.com 8th March 2022 Mar 08, 2022, 7:00 PM CST

• *Europe receives some one-third of its natural gas from Russia, but the dependence varies among EU members.

• *Russia's invasion of Ukraine and the concern over natural gas and oil supply urged European countries to overhaul their energy security strategies.

• *European Commission: Europe can survive next winter without Russian gas.

• Moving away from Russian gas could come at a very high price.

•  

It took a war in Europe for the first time since WWII for the European Union to realize that Russia is not the reliable energy supplier Moscow has always claimed to be, and many officials in Europe have believed. Russia's invasion of Ukraine and the concern over natural gas and oil supply to Europe prompted the EU and the biggest economies in Europe dependent on Russian gas to urgently overhaul its energy security strategies.

By most estimates and forecasts from the European Commission and analysts, Europe can survive next winter without Russian gas. However, ditching Russian energy dependence beyond next winter will be a challenge for the EU and many major European economies, including the biggest, Germany, which imports half the gas it needs from Russia.

As the war in Ukraine threatens to cut off Russian gas supply—either in the form of sanctions or a Putin retaliation to sanctions—Europe realized that ensuring energy security would mean weaning itself off Russian deliveries in the quickest way possible, even at a high economic price.  

High Price To Pay

The price will indeed be high, especially in light of the already high energy prices in Europe even before Russia's invasion of Ukraine, which had put cost pressures on many industries, not to mention the cost-of-living increases with soaring energy costs for households.  

Europe receives some one-third of its natural gas from Russia, but the dependence varies among EU members. Germany is 50-percent reliant on Russian gas, and Italy imports around 40 percent of its gas needs from Russia. Southwest European countries Spain and Portugal do not import any Russian gas, but southeast European countries and Russia's neighbors to the west, Estonia and Finland, are 100 percent or nearly 100 percent dependent on Moscow for their natural gas supply. 

Early on Monday, natural gas prices in Europe shot up to a new record high - the third consecutive trading day in which gas prices in Europe beat all previous records - as the U.S. and Europe discuss measures to restrict Russia's oil and gas revenues.

European allies, however, are not currently on board with banning imports of Russian oil and gas. Germany said it clearly:

"Currently, there is no other way to secure Europe's supply of energy for heat generation, mobility, power supply, and industry," German Chancellor Olaf Scholz said on Monday.

Despite the fact that Germany has been working within the EU and beyond to procure alternatives to Russian energy supply, this doesn't happen overnight, Scholz added.

"It is therefore our conscious decision to continue doing business with Russian energy," the German chancellor said.

In Italy, Energy Transition Minister Roberto Cingolani told state TV Rai on Monday that Rome would replace around half of its imports from Russia by the middle of this year.

But Italy – unlike many other EU countries east of it – already has working alternatives routes for gas from other suppliers such as Algeria and the Trans Adriatic Pipeline (TAP) from Azerbaijan.

Some EU members are entirely dependent on Russian gas, and reducing that dependence would need a lot of EU and supra-government coordination and solidarity to send (if possible) gas where it's needed. And a lot of money, of course.

New Energy Security Strategies

The Russian invasion of Ukraine prompted all European governments to revise their energy strategies, which are now geared toward freeing themselves from Russian energy dependence and Russian blackmail with natural gas deliveries.

Case in point: Russia's Deputy Prime Minister Alexander Novak said on Monday, that Russia could cut natural gas supplies to Germany via the Nord Stream 1 pipeline.

"In connection with unfounded accusations against Russia regarding the energy crisis in Europe and the imposition of a ban on Nord Stream 2, we have every right to take a matching decision and impose an embargo on gas pumping through the Nord Stream 1 gas pipeline," Novak said in a state television broadcast on Monday, adding that "so far, we are not taking such a decision."

In the wake of the Russian invasion of Ukraine, Germany announced last week it was changing course "in order to eliminate our dependence on imports from individual energy suppliers," Chancellor Scholz said. Germany will build two LNG import facilities, at Brunsbuettel and Wilhelmshaven, and look to speed up the installation of renewable energy capacity to have 100-percent renewable power generation by 2035. 

Within the EU, the war in Ukraine prompted officials to advocate for a faster deployment of renewable energy sources.

"The only way that we cannot be put under pressure from being Putin's customer is to no longer be his customer for our essential energy resources. The only way to achieve that is to speed up our transition to renewable energy resources," Frans Timmermans, the European Commission's Executive Vice-President for the European Green Deal, said on Monday.

The European Commission is unveiling proposals "to quickly get rid of our dependency on Russian fossil fuels," European Commission President Ursula von der Leyen says, noting that this would entail diversifying suppliers, taking in more LNG, investing in renewables, and improving energy efficiency.

The International Energy Agency also unveiled a plan which, the IEA says, could help the EU reduce its reliance on Russian gas by more than one-third within a year by turning to other suppliers and using other energy sources.

The EU's own strategy is set to include cutting dependence on Russian gas by 80 percent this year, Bloomberg reported on Monday, citing officials with knowledge of the plans.

As admirable as those plans are, if gas supply from Russia stopped now, industries and households in Europe would suffer, and economies would plunge into recession, according to analysts at Bloomberg Economics.

Europe has realized it cannot depend on one energy supplier, but it will take a lot of effort and money to cut Russia off.   

By Tsvetana Paraskova for Oilprice.com  8th March 2022

Why Oil Crashed Back Below $100

• After a torrid three-week rally, energy markets have entered correction mode, with prices moving sharply lower. Over the past week, Brent has slipped 30% from the 7 March intra-day high while European gas prices have declined 65%.

Brent for May delivery settled at USD 106.90 per barrel (bbl) on 14 March, a w/w fall of USD 16.31/bbl, and moved below USD 100/bbl in early trading on 15 March. WTI for April delivery fell USD 16.31/bbl w/w to USD 106.90/bbl at settlement on 14 March, while the value of the OPEC basket fell by USD 15.84/bbl to USD 110.67/bl and by EUR 15.40/bbl to EUR 101.16/bbl. 

You can blame speculative overshoot for the unfolding scenario though the overall outlook remains bullish.

According to Standard Chartered commodity analysts, the correction tells us more about market positioning and the effect of extreme volatility than it does about changes in fundamentals over the past week. 

The increase in volatility across financial and commodity markets has led to a sharp rise in the level of risk held by traders, and an associated incentive to close out some positions to lower the risk. Oil traders have mostly been positioned with a highly bullish bias in terms of both outright positions and spreads in recent weeks, meaning optimization in a higher-risk environment has mostly involved closing out prompt longs. With speculative shorts being very thin on the ground currently, there have been few natural buyers, and the downside has quickly opened up. While the price ranges involved have been rather extreme, recent price dynamics bear all the hallmarks of a textbook speculative overshoot followed by the correction necessary to reset extreme positioning. 

The irony of the situation is that the dominance among oil traders of the belief that prices could only move higher has led to a position from which market dynamics dictated that in the short term, prices could only go lower.

Replacing Russian Oil

Despite the positioning-led price fall, StanChart says that the key fundamentals are largely unchanged and are also subject to an unusually high level of uncertainty. 

According to commodity analysts at Standard Chartered, Russian oil flows to Europe can be replaced in the short term, with the short-term price implications of that displacement potentially capable of being minimized by the extent to which OPEC members increase output beyond their current OPEC+ targets, and also by the possibility of a successful conclusion to talks in Vienna that results in higher volumes of Iranian exports.

The analysts have projected that consumer reluctance to buy from Russia coupled with shortages of capital, equipment, and technology will continue to depress Russian output over at least the next three years. Russian output is expected to fall by 1.612 million barrels per day (mb/d) y/y in 2022, and by a further 0.217mb/d in 2023, with the y/y decline peaking at 2.306mb/d in Q2-2022. To avoid significant upside price pressure, StanChart reckons that the market would require around 2mb/d extra supply for the remainder of 2022, and an additional 2mb/d in Q2 to ease the dislocations caused by the displacement of Russian oil. The temporary 2mb/d Q2 boost could come from strategic reserves, but the 2mb/d additional flow for the remainder of 2022 would likely need to come from OPEC sources (including potentially Iran).

Market tightness is, however, being helped by the fact that withdrawal from Russian markets has been less dramatic than anticipated.

So far, there are indications that some of the larger EU countries are less keen than countries in the east of the EU to pursue the fastest possible reduction in Russian oil flows. Outside of the EU, the UK’s ban on the import of Russian oil has proved less dramatic than the headlines that accompanied the initial announcement, as it does not take effect until the end of 2022. In the private sector, while several companies have given assurances they will buy no more Russian oil on the spot market, there have been very few indications given about if, when, and how they will cut the volume of Russian oil purchased through their term contracts. Meanwhile, statements from some governments and some companies do appear to have become less hawkish over the past week, with an apparent lengthening of the timespan envisaged for the process of reducing dependence. 

StanChart says that Russian oil trade into Europe appears to be moving further into the shadows of term contracts and a greater reliance on third-party trading intermediaries. That does not make trading with Russia any less distasteful for European public opinion, but it does make the trade less visible and thus likely keeps oil flows from Russia higher than they would have been with more direct government targeting of those flows.

By Alex Kimani for Oilprice.com 16th Mar 2022

Rationing Looms As Diesel Crisis Goes Global

*Russian refiners cut processing rates of diesel fuel.

*Already tight diesel supply is getting even tighter.

*Vitol’s chief executive Hardy: diesel supply shortage could trigger rationing in Europe

Earlier this week, Vitol's chief Russell Hardy warned that a diesel shortage could trigger fuel rationing in Europe. Now, those warnings are multiplying, with fuel rationing no longer looking like an abstract idea. Europe is risking a blow to its economic growth, Reuters reported on Thursday, citing experts. Diesel is what freight transport uses to deliver goods to consumers, but it is also what industrial transport uses for fuel. With Russian refiners cutting their processing rates in the wake of several waves of Western sanctions, already tight diesel supply is going to get a lot tighter.

"Governments have a very clear understanding that there is a clear link between diesel and GDP, because almost everything that goes into and out of a factory goes using diesel," the director general of Fuels Europe, part of the European Petroleum Refiners Association, told Reuters this week.

As Vitol's Russell Hardy noted earlier this week, "Europe imports about half of its diesel from Russia and about half of its diesel from the Middle East. That systemic shortfall of diesel is there."

Europe is not the only one feeling the diesel pinch, however. Middle distillate stocks are on a decline in the United States, too, Reuters' John Kemp wrote in his latest column.

Distillate inventories, according to EIA data, have booked weekly declines for 52 of the last 79 weeks, Kemp reported, falling to 112 million barrels last week. The total decline for the last 79 weeks amounts to 67 million barrels. Last week's inventory level was the lowest since 2014 and 20 percent lower than the five-year average from before the pandemic.

"Diesel is not just a European problem, this is a global problem. It really is," said Gunvor co-founder and chair Torbjorn Tornqvist at the FT Commodities Global Summit this week.

Energy Aspects' Amrita Sen echoed the sentiment, saying that the diesel shortage was the worst affected oil product, noting that Europe imported close to 1 million barrels daily of Russian diesel and that at the time of the Russian invasion of Ukraine, inventories of the fuel were already much lower than the seasonal average.

The problem seems to be that diesel stocks were already tight globally when Russia invaded Ukraine and the West responded with sanctions that, although indirectly, targeted its energy industry. In addition to that, according to Vitol's Hardy, there had been a shift in Europe from gasoline to diesel, which has further exacerbated the problem.

Then there are the commodity traders who are shunning Russian diesel because of the sanctions as well as payment headaches and transportation challenges as many European ports have banned Russian vessels from docking.

TotalEnergies is the latest: the French supermajor has said it will be suspending purchases of Russian diesel "as soon as possible and by the end of 2022 at the latest", the company said, unless it receives other instructions from European governments.

Instead of Russian diesel, TotalEnergies said it would switch to other suppliers, notably Saudi Arabia. It will hardly be the only one to look for alternative suppliers. It looks like a hunt for diesel is in the making, if not already fully underway.

Meanwhile, the alternative suppliers may not have enough to respond to the spike in demand in short order: Saudi Arabia is already Europe's second-largest diesel supplier after Russia but compared to its 50-percent share of the EU diesel import market, the Kingdom only has a 12-percent share.

Per Kemp's report, Asian diesel inventories are also tighter than usual, meaning all large markets for middle distillates are experiencing a shortage. This is pushing all oil prices higher, Kemp noted in his column but this is only the beginning of a bigger problem.

In addition to freight transport, diesel is the fuel used to power mining and agricultural equipment, and it is also used in manufacturing. With prices for the fuel higher, the prices of the end products will also climb higher, fueling the inflation that has turned into a major headache for Europe and the United States.

Boosting local diesel production is another option, but according to experts, they would be buying their crude oil at higher prices, and the end product will, yet again be more expensive. What's more, this ramp up of middle distillate production will take time to materialize.

"Over the next three months, diesel output needs to accelerate significantly, consumption growth must slow, and the market must avoid a significant loss of Russian exports," Kemp wrote. That would be a best-case scenario and if it does not play out, Europe in particular is in for "a severe price spike" that would result in demand depression.

Before the demand depression comes, however, inflation could enter double-digit territory in some of the most vulnerable countries. And if Moscow decides to extend its demand for ruble payments for gas to its oil exports, the situation will become even more interesting than it already is, especially for Europe.

By Irina Slav for Oilprice.com 27th March 2022

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

Last month’s oil market report can be found here:

Heating Oil Price, Oil Market & Exchange Rate Info Feb 2022. - Goff Petroleum

Offering prices and securing stock

Unlike many of our competitors who are not quoting prices until the point of delivery, we are still fixing and ensuring customers prices at the time of order, minimising the uncertainty of the market for our customers.

We guarantee the price you pay at the time of ordering is the price you will pay, no surprises.

Supply wise

We continue to receive heating oil supplies daily from the UK’s major refineries and supply terminals and we are maintaining our heating oil stock in our network of storage tanks. However, due to the high levels of demand that we are currently experiencing across our depots we are currently extending our delivery window from 10 working days to 15 working days.

As always, our team are working hard to get heating oil out to our customers just as quickly as possible.

If you have an order with us, we will deliver just as soon as we can.

Customer service, sales and accounts teams

Call volumes into our sales and customer service teams across the counties we serve have been high this month, and we thank all customers for their patience. Our teams are working hard to field all enquiries and place orders as efficiently as possible. Domestic customers can continue to get quotes and place orders over the phone or online here.

Our advice remains the same, if you have 1/3 of a tank or less, then it would be a good time to consider topping up.

Oil Market, Exchange Rate and Heating Oil Price Information February 2022.

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $93.32                Price at End of Month: $112.19

Highest Price in Month: $112.19                            Lowest Price in Month: $93.32

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.3508                              End of Month: 1.3302

Kerosene (Heating Oil) Cargo Price $ per tonne  

Start of Month: $845.25                                           End of Month: $916.25

Highest Price in Month: $935.00                            Lowest Price in Month: $845.25

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 9.2 ppl

Market Commentary on the Newsfeeds:

How Long Will High Oil Prices Last?

Speculation is rife about whether oil prices will reach $100 this Spring.

A significant increase in U.S. crude production could put downward pressure on crude prices.

Many analysts are wondering how long the current rally in oil will last.

The price of West Texas Intermediate (WTI) opened 2022 at about $75 a barrel (bbl). Last week, the price rose above $90/bbl for the first time since 2014. That was also the last year the price of WTI was above $100/bbl.

To recap, in the first half of 2014, oil prices spent most of the time bouncing between $100/bbl and $105/bbl. But the shale boom had put millions of new barrels of oil into the markets over the course of several years, and by mid-2014 the market was approaching an over-supply situation. The price of oil started to decline, but then in the second half of the year OPEC embarked upon a price war to win back market share that had been lost to the American shale boom.

The result was that the bottom fell out of the oil market. By the end of 2014, the price had declined to $53/bbl. The price remained depressed for all of 2015, and by early 2016 WTI fell below $30/bbl.

At the time, I called this episode OPEC’s Trillion Dollar Miscalculation. I don’t believe that if OPEC knew how far oil prices would fall — and knew that their efforts wouldn’t actually derail the U.S. shale boom — that the cartel would have embarked upon that strategy.

The question now is whether the current situation is more like the first half of 2014, or whether it is more like 2011, when prices rose above $100/bbl and largely stayed there for the next three years.

I would argue that we are somewhere in between. In 2011, the markets weren’t oversupplied, but that’s where they were ultimately headed. U.S. oil production has increased by 600,000 barrels per day (bpd) year-over-year, but we are still 1.5 million bpd below the levels just before the Covid-19 pandemic hit the U.S. Thus, with demand largely recovered to pre-pandemic levels, we are still undersupplied relative to two years ago.

Last month OPEC and its allies said they would increase oil production by a total of 400,000 bpd in February. However, the cartel has been undershooting its production targets. That helps keep oil prices high, especially in light of the slow ramp-up of U.S. oil production.

When I made my energy sector predictions last month, I noted that “OPEC is always the wildcard.” They want the highest oil prices the market can bear, but that is always tempered by non-OPEC oil production. There are also demand factors that OPEC has to consider. High oil prices create incentives for alternatives, like faster adoption of electric vehicles.

So, how will it all shake out? I still believe the U.S. will significantly increase oil production this year, and that will help temper oil prices. It’s not at all clear to me that the 17% price increase in WTI that we saw in January is justified based on the fundamentals.

But oil prices overshoot the fundamentals all the time. WTI at $145/bbl in 2008 overshot the fundamentals, and the oil price plunge deep into negative territory in 2020 overshot the fundamentals. And when the correction toward the fundamentals happens, it can be swift.

Still, with oil just 8% away from that $100/bbl mark, and momentum continuing from January, it seems more likely than not that WTI will reach that level. But how long can it stay there, and where is the top of this current bull market in oil? I will be among those surprised if it’s still at that level in the second half of the year.

By R Papier 12^th Feb 2022

Oil Prices Spike On Rumors Russia Is Preparing To Invade Ukraine

Oil prices are soaring after media outlets began to report that a Russian invasion of Ukraine is imminent.

PBS has reported that according to officials, “the U.S. believes Putin has decided to invade Ukraine and communicated those plans to the Russian military.”

Six U.S. and Western officials have reportedly told PBS that they expect a Russian invasion to begin next week, with defense officials expecting a “horrific, bloody campaign that begins with two days of bombardment and electronic warfare, followed by an invasion, with the possible goal of regime change.”

The reports, hurridly carried out over the Twittersphere, sent oil prices skyrocketing, and stocks tumbling.

At 2:20 p.m. EST, WTI crude was trading at $94.42—a $4.54 (+5.05%) increase on the day. Brent crude was trading up $3.90 (+4.27%) on the day at that time.

WTI is trading at its highest level since 2014, and is up $10 in the last 30 days.

JPMorgan said earlier this week that Brent could “easily” reach $120 per barrel if Russia invaded Ukraine and the U.S. and other nations sanctioned Russia’s oil and natural gas exports.

If Russia did invade Ukraine, the Biden Administration would have to choose between sanctioning Russia’s oil exports and keeping retail gasoline prices at American pumps from reaching the stratosphere.

Gasoline prices are already higher than the Administration would like, particularly as Biden’s disapproval rating approaches 60%.

Sanctions on Russia would be devastating for both the Biden Administration and the American consumer—but it would also cause great hardship to Russia, which relies a great deal on crude oil revenue for its budget. Last year, the value of Russia’s crude oil exports totalled more than $300 million per day.

By J Geiger for Oilprice.com

Was $99 The Peak For Oil Prices?

The already priced-in geopolitical risk premium is probably more than $10 per barrel.

An imminent Iran nuclear deal could send oil prices down to the low $90s or even below $90.

An Iran agreement, a Fed hike, and de-escalation of the Ukraine situation by the end of March could lead to a significant drop in crude prices.

Following the escalation in the Russia-Ukraine crisis, oil prices surged within striking distance of $100 a barrel early on Tuesday, when Brent hit $99.50 before retreating to the $97 mark. 

The already priced-in geopolitical risk premium is probably more than $10 per barrel, analysts say, and most of them believe it’s just a matter of when—not if—oil hits the triple-digit threshold.

Although the Ukraine premium is a large part of the current rally towards $100 oil, there are several bullish fundamentals that could keep prices elevated even if a worst-case scenario of a conflict with subsequent Western sanctions on Russian energy exports does not materialize.

These bullish factors include robust growth in global oil demand, which is set to exceed pre-COVID levels this year, the lowest commercial inventories in developed economies in seven years, and the lowest crude inventories at Cushing, Oklahoma—the designated delivery point for WTI Crude oil futures contracts—since September 2018. 

On the bearish side, an imminent Iran nuclear deal could send oil prices down to the low $90s or even below $90 as the market tightness would see relief at some point later this year when U.S. sanctions on Iran’s oil exports are removed.

In recent days, reports have intensified that the indirect talks between the United States and Iran about returning to the 2015 deal are in their final stage and are said to be “about to cross the finish line,” according to a tweet from Russia’s envoy Mikhail Ulyanov on Tuesday. “At the final stage of the #ViennaTalks intensive consultations in various formats are underway,” Ulyanov said a few hours later.

Iran could bring 1.3 million barrels per day (bpd) to the global oil supply, although this would take some time, including technical time, for reinstating oil payment settlements and Iranian foreign accounts. At any rate, if a deal is reached, more supply would bring relief to the tight oil market.

As the past two years have shown, another bearish factor for oil would be a new infectious vaccine-jumping COVID variant that could prompt governments to re-impose restrictions. Expected Fed interest rate hikes could also have some slowdown effect on rebounding economic growth.

An Iran agreement, a Fed hike, and de-escalation of the Ukraine situation by the end of March could see oil prices around $80 in the second quarter, and at around $70-75 in the second half of 2022, Michael Lynch, petroleum economics and energy policy analyst, writes for Forbes.

Still, as-is, demand appears to be strong, the physical market is very tight, and as Omicron-related restrictions are lifted in many economies, global demand is expected to beat the 2019 levels in the third and fourth quarter this year and average more than the 2019 demand volumes for the whole of 2022.

Then, there is the growing gap between the OPEC+ nominal production increases and the actual supply to the market from the alliance.

If OPEC+ continues to fail in delivering its oil production targets amid rising demand and inventories at multi-year lows, oil prices will remain under upward pressure and are set for more volatility, the International Energy Agency (IEA) said earlier this month. The gap between OPEC+ output and its target levels surged to as much as 900,000 bpd in January, the IEA said in its Oil Market Report for February.

Moreover, major investment banks had started to predict $100 oil was coming even before the recent escalation in Ukraine. Many of them continue to believe $100 is justified right now. If the crisis escalates into a conflict that would trigger Western sanctions on Russia’s oil – accounting for 12 percent of global supply – prices could even hit $150 a barrel, J.P. Morgan said earlier this month.

“Such is the fundamental market tightness in oil today that under a best-case scenario in which tensions between Russia and Ukraine de-escalate, the oil price would likely merely drop to $84 bbl. But any disruptions to oil flows from Russia in a context of low spare capacity in other regions could easily send oil prices to $120 bbl. A halving of Russian oil exports would likely push the Brent oil price to $150 bbl,” Natasha Kaneva, Head of Global Commodities Strategy at J.P. Morgan, said.

Bank of America says that a Ukraine conflict could send oil higher by $20 a barrel than current levels, but it also notes that “A weaker dollar trend and a pro-growth macro backdrop, if it indeed occurs, could support crude near triple digits in the second half of the year.”

The world’s biggest independent oil trader, Vitol, sees further room for oil prices to rally, based on bullish fundamentals, as it expects global oil demand to surge in the second half of 2022.

By T Paraskova 24^th Feb 22 for Oilprice.com

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

Last month’s oil market report can be found here:

Heating Oil Price, Oil Market & Exchange Rate Information January 2022. - Goff Petroleum

“Where does my heating oil come from?”

We would like to assure our customers on exactly where their heating oil is coming from.

All the heating oil that we supply has started its life in the North Sea as crude oil; from there it tends to be shipped to be stored in either Amsterdam, Rotterdam or Antwerp.

The oil is then transported from European shores across to one of the UK’s oil refineries where the crude is refined to the product we know as Kerosene. From there it may be put onto a ship again as bulk finished product to be moved to a UK coastal storage facility or it might be collected direct from tanks at the refinery.

We collect all our product by road, either direct from a refinery or a coastal storage facility and the kerosene is transported to one off Goff’s depots before being delivered to our customers’ homes.

Goff presents:

A Day in the life of Heating Oil

The conflict between Russia and Ukraine has caused widespread fear and interrupted traditional fuel and energy supply. This has had a direct effect on the price of all energy including liquid fuels, but we continue to ensure a robust supply of quality fuel from all of our supply partners.

We would advise keeping an extra eye on your heating oil levels over the next few weeks and perhaps topping up earlier than normal. As a rule of thumb, we advise that if you have 1/3 of a tank or less, then it would be a good time to consider topping up.

You can order online or by calling 01953 713555

We were over the moon with the number of votes received for all the charities that had been nominated. Despite a small hick up with the poll, with the need to combine two polls to pick a winner, we are delighted to announce that

Danaher Animal Home

in Wethersfield the winner of this season's Goff Good Causes.

You can find out more about them and the fantastic work they do here.

Currently the heating oil used in your boiler, has been offset by the different companies who have been part of the process of gathering and refining the crude oil into the product we call heating oil or kerosene.

As a company we are committing to offsetting the carbon impact from our part in its distribution to your home. We do this in what we believe is the most carbon effective manner, the process we use is part of a new approach called regenerative farming and in particular cover planting.

Our scheme is UK based and truly tangible, we work closely with farmers to ensure that our carbon offset scheme is making the most impact possible. We also employ an agronomist to take regular soil samples so that we can measure the impact we are creating.

We are delighted that we have been able to open this scheme to Goff customers, allowing them the opportunity to offset their carbon emissions. This option can easily be selected as part of the checkout process and a £10 contribution equates to offsetting 500 litres of heating oil usage.

Intrigued?  Want to know more, visit our farm website to find out all the details, of what we are doing and how it benefits the environment.

Oil Market, Exchange Rate and Heating Oil Price Information January 2022.

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $76.93              Price at End of Month: $92.46

Highest Price in Month: $92.46                Lowest Price in Month: $76.93

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.3553                              End of Month: 1.3417

Kerosene (Heating Oil) Cargo Price $ per tonne  

Start of Month: $730.25                                           End of Month: $840.75

Highest Price in Month: $848.50                            Lowest Price in Month: $730.25

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 7.50 ppl

Market Commentary on the Newsfeeds:

Looking back

2020 and 2021 were consistent in providing volatile price movements in crude oil markets, causing UK fuel prices to fluctuate aggressively and generally climb higher. A 3yr Brent chart captures the unusually high volatility caused by fluctuations in the global economic outlook.

2022 Oil Market Outlook:

The outlook for the oil market is intrinsically linked to global demand. The greatest risk to demand remains Covid-19 however many analysts expect the economic impact of the Omicron variant to be short lived and for global growth to exceed 4% in 2022. The initial market sell-off towards the end of 2021 pointed to market jitters from the new variant but with Brent beginning the year on an upward trajectory, having made gains over the festive period, these jitters appear largely abated for now. With the growing belief now that Covid is endemic, the thinking is that developed economies are better equipped to fight the virus which suggests the economic impact of potential future variants could be limited.

Looking back, the second half of 2021 was dominated by inflation, fuelled by the spike in energy prices – most crucially, Natural Gas. As this trend is expected to continue into 2022, we expect additional demand to come from producers shifting their inputs from gas to oil.

OPEC+ has been consistent and cautious with its production policy since the start of the pandemic and it appears that this approach looks set to continue into 2022. At the beginning of the year, the group chose to maintain its policy by increasing supply by 400,000 barrels per day. This appears to reflect the view that the Omicron variant will not have a major impact on global oil demand.

Given the continued unwinding of OPEC+ supply cuts, along with strong non-OPEC supply growth, the global oil market could return to surplus and could serve to keep the market trading back towards the 2021 highs. There however remains a question of how much spare capacity OPEC+ has to meet its supply targets. Recent data points to several smaller producers whose output is below their agreed levels, suggesting they do not have the capacity to increase output further. If output capacity is overestimated, this could contribute to upside risk for the market.

Covid related restrictions have had a severe effect on air travel and consequently jet fuel – a huge component of oil demand. Analysts argue that if we continue to see a recovery in air travel, particularly as restrictions worldwide continue to ease, higher jet fuel demand will feed into oil prices.

Undoubtedly Covid still poses an unknown to the markets and general optimism for 2022 rests on the crucial assumption that Covid will be kept at bay through the existing policy and vaccination roll-outs.

The Bullish Case For Oil Prices In 2022

* OPEC+ is nowhere near pumping to its overall quota

* The coming oil glut could be much smaller than expected and could exert much less downward pressure on oil prices this year

* Demand remains robust as signaled in the six-month futures spread in Brent which has more than doubled since hitting a low point in December

At the start of 2022, Omicron’s surge and record COVID cases in many major economies are combining with an expected oversupply on the oil market to give bears a reason to cheer. Yet, oil prices rose by 5 percent in the first trading week of the year as analysts focused on the possibility that the oversupply may not be as high as predicted a few months ago, also because of very low levels of inventories at the end of 2021. In addition, supply disruptions in Libya and Kazakhstan reminded market players of the volatility of much of the world’s oil production in geopolitically sensitive areas.   

COVID developments will continue to be the biggest wild card in the market this year, but average global oil demand in 2022 is expected to exceed the pre-pandemic level from 2019, forecasters and analysts say. 

Demand is set to grow even further from 2021 into 2022, barring new mass lockdowns in many places. Supply will no doubt also grow to the point of exceeding demand, most analysts predict. Not only is OPEC+ set to continue unwinding its production cuts, but non-OPEC+ producers—led by the United States—will also raise supply, especially at $80 oil, which means that global crude oil production is set to grow from both OPEC+ producers and those outside the pact. 

However, the coming oil glut could be much smaller than expected and could exert much less downward pressure on oil prices this year, some analysts, including Bloomberg First Word oil strategist Julian Lee, say. 

OPEC+ Undershoots Oil Production Targets For Months

First, OPEC+ is nowhere near pumping to its overall quota. Depressed investments and a lack of spare capacity at many producers in the pact, especially African OPEC members, have made monthly oil production increases much lower than the allowed 400,000 bpd for OPEC+, of which 253,000 bpd is allocated to the ten OPEC members bound by the pact. 

Last month was the seventh consecutive month in which OPEC+ had failed to deliver on its production increase, and the fifth straight month in which it had undershot its target production by more than 500,000 bpd, according to Bloomberg and OPEC data compiled by Bloomberg’s Lee. 

OPEC+ produced 625,000 bpd below its overall production target in December 2021, slightly better than the 655,000-bpd shortfall off the target in November, per Bloomberg estimates. 

OPEC is not faring much better, with African members dragging output down. According to the monthly Reuters survey, OPEC’s oil production increased by just 70,000 bpd in December from November as the cartel consistently failed to raise its production by 253,000 bpd a month as per the OPEC+ deal. 

Moreover, although the group still expects a surplus on the market this year, it could be a smaller one compared to last month’s assessment. OPEC+ continues to see the Omicron impact on demand as “mild and short-lived,” just as OPEC said in its Monthly Oil Market Report (MOMR) in mid-December.

Spare Capacity Is Shrinking 

Yet, all oversupply models rely on the assumption that OPEC+ will actually deliver on its production target—something it has not done for seven consecutive months. 

OPEC+ has been undershooting its collective production targets for months and will likely continue to do so in the months ahead. African OPEC members lack the capacity and investments to boost production, while Russia is estimated to pump and export lower volumes than its quota. The underproduction could even become a major upside for oil in 2022, especially if Omicron’s dent to global oil demand remains limited to jet fuel, as the most recent estimates and analyses have shown. 

The biggest Arab Gulf producers have the means to raise output and fulfil their OPEC+ quotas, but this, of course, shrinks their spare production capacity, which accounts for the majority of the spare capacity globally. 

As recent weeks showed, oil market balances are one conflict in Kazakhstan—or one blockade in Libya—away from turning into deficits. With lower spare capacity, mostly concentrated in Saudi Arabia, the United Arab Emirates (UAE), and Kuwait, a sudden supply disruption in 2022 would push oil prices higher. 

“The supply concern which is not going to disappear anytime soon is OPEC spare capacity. There are only a handful of members that have the capacity to increase output, whilst others are failing to meet their agreed production levels due to disruptions and lack of investment,” ING strategists Warren Patterson and Wenyu Yao said on Monday. 

Goldman Sachs, for example, is very bullish on oil for 2022 and beyond due to low investment in the sector and the fact that only two oil producers in the world—Saudi Arabia and the UAE—currently have the capacity and the means to pump more oil than they did in January 2020, just before COVID. Everyone else is struggling, Jeff Currie, global head of commodities research at Goldman Sachs, told Bloomberg Television in an interview last week. 

“Overall, demand remains robust as signalled in the six-month futures spread in Brent which has more than doubled since the December, omicron demand worry low point,” Ole Hansen, Head of Commodity Strategy at Saxo Bank, said on Monday. 

Lower-than-expected supply growth could soon wipe out the certainty of a large oil glut, as uncertainty and volatility will continue to be the only two certain things in oil markets this year.   

By Tsvetana Paraskova for Oilprice.com 12th Jan 2022

A Watershed Moment That Could Send Oil Prices To $100 

Crude oil prices could reach $100 per barrel, according to Ninepoint Partners portfolio manager Eric Nuttall, the latest to add to a growing number of analysts expecting three-digit oil prices.

“The oil market remains exceptionally tight,” Nuttall told Bloomberg, adding, “When we look at global oil demand, we’re back to pre-COVID levels. So there are strong reasons to believe the market will continue to grow throughout this year as Omicron passes.”

“But the real story remains on supply. I believe we’re in a structural bull market – a multi-year bull market for oil that will end in all-time high oil prices,” Nuttall also said.

The asset manager’s opinion reflects an overall bullish sentiment on the market, as noted by Barron’s in a report from earlier this week, which saw a growing number of traders betting that U.S. crude could hit $100 a barrel.

The report quoted an RBC Capital Markets analyst as saying, “We have yet to encounter a market bear this year, whether on the commodity side, equity investor or with corporate clients.”

“Over the past week, open interest for June 2022 WTI $100 calls has increased by 10%,” Michael Tran also wrote. “Since September, open interest between $105-$150 per barrel strike prices have increased 14 times.”

Goldman Sachs last month also reiterated its bullish stance on oil, with the bank’s head of energy research Damien Courvalin telling media that “We’ve already had record high demand before this newest variant, and you’re adding higher jet demand and the global economy is still growing. You see how we will average a new record high in demand in 2022, and again, in 2023.”

The most bullish factor for prices, however, at least according to Ninepoint Partners’ Nuttall, is the fact that OPEC is running out of spare capacity.

“The exhaustion of OPEC’s spare capacity - so, as they bring on all that spare curtailed volume - is going to be the most bullish, watershed event in this industry in many, many decades.” 

By Irina Slav for Oilprice.com 12^th Jan 2022

Fuel Prices Online

Following near three weeks of constant rises oil prices fell on Thursday 19^th Jan 2022, added to the losses earlier in the session, despite strong demand and short-term supply disruptions continue to support prices close to their highest levels since late 2014.

Brent crude futures fell 0.2% a barrel having dropped more than $1 earlier in the session. The global benchmark touched $89.17 a barrel on Wednesday, its highest since October 2014. U.S. West Texas Intermediate (WTI) crude futures were up 0.1% a barrel, having also shed nearly $1 earlier. WTI climbed to as much as $87.91 on Wednesday, the highest since October 2014.

"The International Energy Agency said global oil demand is on track to hit pre-pandemic levels," analysts at ANZ bank said in a note. "Shorter-term supply disruptions are also helping tighten markets. Brent crude rallied sharply after reports a key oil pipeline running from Iraq to Turkey was knocked out by an explosion."

However, the flow of crude oil through the Kirkuk-Ceyhan pipeline has resumed, after it was halted on Tuesday due to a blast near the pipeline in the southeastern Turkish province of Kahramanmaras, officials said on Wednesday.

Supply concerns have mounted this week after Yemen's Houthi group attacked the United Arab Emirates, the third-largest producer in the Organization of the Petroleum Exporting Countries (OPEC). Meanwhile Russia, the world's second-largest oil producer, has built up a large troop presence near Ukraine's border, stoking fears of invasion and subsequent supply uncertainties.

Underpinning oil prices is the broad post-coronavirus pandemic recovery in demand for fuel.

OPEC officials and analysts say that an oil rally may continue in the next few months, and prices could top $100 a barrel as demand shrugs of the spread of the Omicron COVID-19 variant.

OPEC+, which groups the cartel with Russia and other producers, is struggling to hit a monthly output increase target of 400,000 barrels per day (bpd).

U.S. crude and gasoline stocks rose while distillate inventories fell last week, according to market sources citing American Petroleum Institute figures on Wednesday.

Crude stocks rose by 1.4 million barrels for the week ended Jan. 14. Gasoline inventories rose by 3.5 million barrels while distillate stocks fell by 1.2 million barrels, according to the sources, who spoke on condition of anonymity.

$90 Oil Is Only The Beginning | OilPrice.com

* The current move in oil prices is largely attributed to geopolitical risk.-

* The next major move in oil could be triggered if inventories fall to critical levels.

* Wall Street’s consensus seems to be that Brent will reach $100 by the summer.

Brent crude touched $90 per barrel briefly this week for the first time in years. This latest jump was attributed to tensions around Ukraine, but this is the most transitory reason for oil price rises. The bigger reasons all have to do with fundamentals. And $90 per barrel of Brent may be only the beginning. A lot has been written recently about OPEC's spare capacity and the not too rosy outlook for it. That spare capacity is in decline for several reasons, but chief among them appears to be underinvestment. As a result, JP Morgan earlier this month warned that Brent could rise to $125 per barrel as OPEC's spare production capacity falls to 4 percent of total capacity by the fourth quarter of 2022.

The International Energy Agency has gone even further, warning OPEC spare capacity could fall by half to just 2.6 million bpd in the second half of the year. The agency then went on to say that, "If demand continues to grow strongly or supply disappoints, the low level of stocks and shrinking spare capacity means that oil markets could be in for another volatile year in 2022."

It is not just OPEC, however. The biggest non-OPEC producer of oil—and biggest oil producer globally—is pumping less than it can. Pressure from shareholders on public oil majors in the United States has increased, as has an insistence that companies focus on greening up their operations instead of looking for more oil and gas to extract. As a result, the U.S. is pumping less oil than it could and, many would argue, should.

As a result, the stage seems set for another expensive year in oil, which happens to coincide with an expensive year overall as central banks begin tightening monetary policies in response to stubborn inflation that, like the IEA's oil demand forecasts from the early days of the pandemic, proved to be far from the transitory glitch the Fed said it was last year.

"The oil market is heading for simultaneously low inventories, low spare capacity and still low investment," Morgan Stanley analysts wrote in a note cited by the Wall Street Journal this week, summing up the situation quite nicely. In this situation, $90 for a barrel of Brent may be just the beginning.

Indeed, the Wall Street consensus seems to be that Brent will reach $100 by the summer because of all the reasons listed by Morgan Stanley and also because breakeven costs are also on the rise, thanks to inflation trends and labor shortages, at least in the United States. Yet the biggest driver of prices will remain physical demand.

The International Energy Agency admitted physical oil demand has proven stronger than previously expected in its latest Oil Market Report. Based on this surprising turn of events, the IEA revised up its 2022 oil demand forecast by 200,000 bpd. And based on its track record, it might well turn out it has once again underestimated demand robustness. Even with this estimate, oil demand will not only return to pre-pandemic levels but exceed them, reaching 99.7 million bpd by the end of the year.

In such a situation, higher prices for oil are all but certain since there is precious little—bar another round of lockdowns which is highly unlikely—anyone can do about them. The question, then, becomes how high oil can go before it begins to go down?

The answer is tricky. U.S. public oil companies are still beholden to their shareholders, who seem to be taking to heart forecasts that oil has no long-term future. They have limited space for doing what they want. Private companies will be drilling as WTI continues climbing higher. And OPEC will be drilling as well, but it may choose to keep controls on production rather than switching to "pump at will," mostly because only a few OPEC members actually have the capacity to pump at will.

Excessively high prices tend to discourage consumption, regardless of the commodity whose prices are getting excessively high. However, there is a caveat, and it is that the commodity must have a viable alternative to discourage consumption when prices rise too high. Judging from Europe's nightmare autumn and winter this year, alternatives to fossil fuels are not yet up to par. This basically means that the impact of high oil prices on demand will be slow to manifest and slow to push prices down.

Where does this leave the world? The short answer is "Not in a good place." Higher oil prices will lift the prices of everything else, and this is the last thing you want—if you're a government—when you're already struggling with inflation. It may well be that the pandemic will end for good this year, but the real fallout from it may only be starting to show.

By Irina Slav 30^th Jan 2022

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

Last month’s oil market report can be found here:

Goff Heating Oil Market Price Information for December 2021 - Goff Petroleum

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $72.00                Price at End of Month: $76.93

Highest Price in Month: $78.38                Lowest Price in Month: $68.98

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.3318                              End of Month: 1.3544

Kerosene (Heating Oil) Cargo Price $ per tonne  

Start of Month: $651.25                                           End of Month: $707.75

Highest Price in Month: $719.75                            Lowest Price in Month: $642.00

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 4.07 ppl

Market Commentary on the Newsfeeds:

JP Morgan Predicts The End Of Covid, A Strong Economy, And $125 Oil

- JP Morgan believes that things are looking up for the global economy next year and consumption will remain strong for years to come

- The bank highlights inflation, the Chinese economy, and the transition from a pandemic to an endemic disease as the three economic factors to watch moving forward

- This prediction for a vibrant economy supports the banks earlier claim that oil prices could hit $125 per barrel next year

Next year could lay the foundation for "a far more vibrant economic environment" and COVID transitioning from a pandemic to an endemic disease, JP Morgan said in its Outlook 2022, titled 'Preparing for a vibrant cycle.'

According to the investment bank, household net worth is at all-time highs in many developed countries, and excess savings are elevated. Consumption will likely be strong for years amid strong labor market conditions and the capacity to take on more debt, JP Morgan's strategists said in the report for 2022.

"Although we see clear potential for a more vibrant economic cycle, the environment is also fraught with cross-currents. We are confident the economic expansion will continue through 2022, but its strength will likely be determined by the monetary response to inflation, the relative success of Chinese policymakers in rebalancing their economy, and the pace of the transition from a pandemic to an endemic disease," the bank noted.

A vibrant economy means robust demand for oil, and JP Morgan even said last week that crude oil prices could soar to $125 per barrel in 2022 and $150 in 2023 due to OPEC's limited capacity to boost production.

The Omicron variant that has spooked markets over the past two weeks could be the beginning of the end of the pandemic, JP Morgan strategists Marko Kolanovic and Bram Kaplan wrote in a note last week, as carried by Bloomberg.

If the new variant turns out to be less deadly, it would fit the historical patterns of virus evolution. This would be bullish for risk markets as it could suggest the end of the pandemic is in sight, the strategists said.

Bill Gates also expressed optimism that the end of the pandemic could be in sight at some point next year.

"I am hopeful, though, that the end is finally in sight. It might be foolish to make another prediction, but I think the acute phase of the pandemic will come to a close some time in 2022," Gates wrote in his 'Year in Review' blog post on Tuesday.

By Tsvetana Paraskova for Oilprice.com 8^th Dec 2021

World Leaders Have To Face The Truth About Oil Demand

- Across the world, politicians are grappling with the reality of expensive energy

- Price shocks, scarcity and energy poverty are on the cards after two consecutive years of underinvestment in the oil and gas industry

- World leaders might have to acknowledge that oil and gas demand are here to stay for the foreseeable future

"Our products make the world run." This is what Chevron's chief executive Mike Wirth said at this week's World Petroleum Congress in Houston. The statement echoed a sentiment expressed by other oil executives attending the event—oil and gas are indispensable and will continue to be indispensable for the observable future and beyond it.

This is not something that a lot of people want to hear. It is certainly not what environmentalist organizations want to hear. It is certainly not what the Biden administration and the EU want to hear. Yet, it appears to reflect a hard reality.

Europe is struggling with record gas prices, and yet its gas inventories are being depleted at the fastest rate in about a decade because of a colder than usual start of the winter across much of the continent. In the U.S., gasoline prices have become a top priority for an administration that came to power with the promise to reduce the country's consumption of fossil fuels. Whether everyone likes it or not, quitting oil and gas will not be as easy as some hope.

"I understand that publicly admitting that oil and gas will play an essential and significant role during the transition and beyond will be hard for some," said the chief executive of Aramco, Amin Nasser, also at the World Petroleum Congress. "But admitting this reality will be far easier than dealing with energy insecurity, rampant inflation and social unrest as the prices become intolerably high and seeing net zero commitments by countries start to unravel," he said, as quoted by the Financial Times.

The price of electricity is already getting intolerably high in many parts of Europe that were until recently used to affordable and secure energy. This, unless it is tackled urgently, could indeed lead to social unrest—there are few things more flammable than public opinion in the middle of winter amid an energy shortage and the risk of blackouts.

"Oil and gas continue to play a central role in meeting the world's energy needs, and we play an essential role in delivering them in a lower carbon way," Chevron's Wirth said, as quoted by the Wall Street Journal.

If the news from Europe since September is any indication, Wirth is correct in his prediction. However, supply may be tight due to underinvestment, which is at least in part the result of the rush to replace oil and gas with renewable energy.

Price shocks, scarcity and energy poverty are on the cards after two consecutive years of underinvestment in the oil and gas industry, a report by IHS Markit and the International Energy Forum said this week. This year's investments in the industry would be about $341 billion, which is 23 percent lower than pre-pandemic investment levels of $525 billion, and that's despite rising global demand for the commodities, the report noted.

"Oil and gas investment will need to return to pre-Covid levels and stay there through 2030 to restore market balance," the report's authors wrote, with the secretary general of the IEF saying, as quoted by Upstream Online, the "energy crisis in Europe and Asia this winter is a preview of what we can expect in the years ahead".

This would certainly not sit well with renewable energy proponents like the head of the International Energy Agency Fatih Birol and the EU's green deal chief, Frans Timmermans. Yet, it wasn't too long ago that Birol called on OPEC+ to produce more oil and on Russia to pump more gas to Europe, and Timmermans was forced to admit gas had a part to play in the energy transition.

"Underinvesting in oil and gas before renewables and other low-carbon technologies that are ready to scale up to meet energy demand could create recurrent energy crises of the kind we saw in Asia and Europe over the last few months," said IHS Markit's Daniel Yergin in comments on the report. He added that these crises could lead to adverse economic consequences. These, in turn, will in all likelihood spark the social unrest Aramco's Nasser talked about at the WPC.

The big energy problem appears to be one of prematurity. The buildup of renewable generation capacity in Europe and the U.S. was accompanied by a premature retirement of fossil fuel generation capacity, leaving countries short of baseload energy when they need it.

It is no coincidence that some countries such as the UK and Sweden had to restart coal plants: in the UK's case, to fill a gap between demand for electricity and supply amid the gas crunch, and in Sweden's case, to export the electricity to Poland in order to help it avoid blackouts. What caused the shortage in Poland? Low wind and shutdowns at some power plants.

The premature shift to relying on wind and solar is leaving countries vulnerable to the weather and effectively increasing their dependence on fossil fuels. Perhaps the current crunch will teach some important lessons to those willing to learn. Otherwise, the scenario outlined by Aramco's Nasser and IHS's Yergin may well materialize in the not too distant future.

By Irina Slav for Oilprice.com 8^th Dec 2021

Reasons for optimism after a difficult year from the Blog of Bill Gates

2021 was an incredibly hard year for many people, including me, but I’m hopeful that 2022 will be better.

When Paul and I were starting Microsoft, we had a vision that personal computers would one day play a significant role in people’s lives. But I don’t think either of us ever foresaw a future where they would be your only connection to the world. Like many people, there were entire days this year when the only human interaction I had was through a screen.

The result has been the most unusual and difficult year of my life. (I suspect a lot of the people reading this might say the same.) 2020 had a brief period of relative normalcy before COVID-19 upended everything. In 2021, the pandemic has dominated our lives since day one. We’ve all had to adapt to a “new normal,” although what that looks like is different for every person. For me, the result has been a year spent mostly online.

I had stretches of time without any face-to-face social interaction. If I had a break between meetings, I’d walk around my yard just to see something different. After work, I’d play bridge with friends online or hang out with them over video chat. Once I got vaccinated, I started having some small in-person get-togethers, but my social life is still a lot more digital than it used to be.

It’s been a strange and disorienting experience. My personal world has never felt smaller than it did over the last twelve months.

At the same time, this year was a reminder that our world is more connected than ever. 2021 was full of monumental events with global repercussions, including extreme weather events, the ongoing effects of the pandemic, and America’s withdrawal from Afghanistan. Every time you looked at the news, you were reminded of just how significantly something happening on the other side of the world could affect you at home. (Just look at how one container ship stuck in the Suez Canal for a week caused shipping delays around the world.) It’s never been clearer that tackling big problems requires people working together across borders and sectors.

Collaboration has been a constant theme with my work this year. The foundation continues to take up the bulk of my time, and I’m blown away by the amazing progress made by our team and our partners in 2021. Most weeks, we have a virtual get-together with everyone who’s working on our COVID response. Each meeting focuses on a different topic, like disease modelling or vaccine distribution. It’s inspiring to hear how groups are working together to find solutions.

Although COVID-19 has been a huge focus, the foundation continues to make progress in other areas. Our U.S. Program is working with partners to help students and teachers navigate the strange new world of pandemic-era education, and my colleagues working on gender equality are fighting for a more equitable global recovery. The global health and development teams have found creative ways to protect advancements on diseases like polio, TB, and HIV and continue progress in reducing childhood mortality. (This year’s Goalkeepers Report outlines how the pandemic hasn’t set us back as badly as feared.)

One of the most exciting things that happened was WHO approval of the first malaria vaccine. Malaria kills nearly 650,000 people every year—more than half of them children under five—and remains one of the leading causes of death in low-income countries. We funded late-stage clinical development of the vaccine between 2001 and 2015 and continue to support research into how to optimize its effectiveness. This new vaccine is giving us insights into how to develop second-generation vaccines and preventative tools that can be used on all ages, are even more effective, and can help us reach the goal of eradication.

“One of the most exciting things that happened was WHO approval of the first malaria vaccine.”

This year also saw the start of a new chapter in my climate work. I released my book How to Avoid a Climate Disaster and launched the Breakthrough Energy Catalyst and Fellows programs to support financing, producing, and buying new clean-energy technologies. The reason I felt confident enough to expand our efforts so significantly was the incredible progress I’ve seen from Breakthrough Energy Ventures, where we are now supporting over 70 amazing companies.

I’ve been working on climate and energy issues for a long time, but the area has become a bigger part of my focus over the last twelve months. I also found time to work on some non-foundation and non-climate related areas, like Alzheimer’s research and expanding free educational resources for teachers.

Even though I think the things I’ve been working on are by far the most interesting part of my year, I know a lot of people are curious about a subject closer to home: my divorce. Melinda and I continue to run our foundation together and have found a good new working rhythm, but I can’t deny that it’s been a year of great personal sadness for me. Adapting to change is never easy, no matter what it is. I’ve been impressed by how resilient my loved ones—especially my kids—have been in this challenging time.

My family also experienced a lot of changes beyond what you probably saw in the news. My oldest daughter, Jenn, got married this fall, and her wedding was the highlight of my year. Our youngest, Phoebe, graduated from high school and went off to college. Since my son Rory is also away at school, that means I’m officially an empty nester. The house is a lot quieter without a bunch of teenagers hanging around all the time. I miss having them at home, even if it is easier to focus on reading a book or getting work done these days.

2021 has been a year of big transitions for me, but it hasn’t changed why I love the work I do. As it comes to a close, I wanted to sit down and write about four things that are top of mind heading into 2022: the latest progress toward ending the COVID-19 pandemic, why decreased trust in institutions might be the biggest obstacle standing in our way, what the climate conversation can teach us about making progress, and how the rapid digitization brought on by the pandemic will shape our future.

Why I’m hopeful the end of the COVID-19 pandemic is finally in sight

In my previous end-of-year post, I wrote that I thought we’d be able to look back and say that 2021 was an improvement on 2020. While I do think that’s true in some ways—billions of people have been vaccinated against COVID-19, and the world is somewhat closer to normal—the improvement hasn’t been as dramatic as I hoped. More people died from COVID in 2021 than in 2020. If you’re one of the millions of people who lost a loved one to the virus over the last twelve months, you certainly don’t think this year was any better than last.

Because of the Delta variant and challenges with vaccine uptake, we’re not as close to the end of the pandemic as I hoped by now. I didn’t foresee that such a highly transmissible variant would come along, and I underestimated how tough it would be to convince people to take the vaccine and continue to use masks.

I am hopeful, though, that the end is finally in sight. It might be foolish to make another prediction, but I think the acute phase of the pandemic will come to a close some time in 2022.

There’s no question that the Omicron variant is concerning. Researchers—including a network called GIISER that is supported by our foundation—are working urgently to learn more about it, and we’ll have a lot more information (like how well vaccines or previous infection protect you against it) soon. But here’s what we do know: The world is better prepared to tackle potentially bad variants than at any other point in the pandemic so far. We caught this variant earlier than we discovered Delta because South Africa has invested heavily in genomic sequencing capabilities, and we’re in a much better position to create updated vaccines if they’re needed.

It’s troubling any time a new variant of concern emerges, but I’m still hopeful that, at some point next year, COVID-19 will become an endemic disease in most places. Although it is currently about 10 times more lethal than flu, vaccines and antivirals could cut that number by half or more. Communities will still see occasional outbreaks, but new drugs will be available that could take care of most cases and hospitals will be able to handle the rest. Your individual risk level will be low enough that you won’t need to factor it into your decision-making as much. It won’t be primary when deciding whether to work from the office or let your kids go to their soccer game or watch a movie in a theater. In a couple years, my hope is that the only time you will really have to think about the virus is when you get your joint COVID and flu vaccine every fall.

Now that we’re starting to move towards the end of this pandemic, I’ve been spending a lot of time thinking about what went right and what went wrong over the last two years. We can learn important lessons from the world’s COVID-19 response that will make us better prepared next time.

Even though the pandemic has dragged on longer than anticipated, a lot has gone well. To start, the progress we’ve made on vaccines is remarkable. The world has never made and distributed a vaccine for a disease faster than it did for COVID-19. The fact that we had one—let alone multiple!—vaccines during the first year of the pandemic is miraculous. That success is a tribute to how many candidates the world had in the pipeline. Vaccine development relies on a little bit of luck, and we hedged our bets by trying so many different approaches.

I think mRNA vaccines will ultimately be seen as the most consequential breakthrough of the pandemic. Proving that mRNA works as a vaccine platform has been a massive gamechanger—not just for this pandemic, but for the next one too. Now that mRNA is well-established, we’ll be able to develop safe and effective vaccines super-fast in the future.

We also learned a lot about non-pharmaceutical interventions (or NPIs) that will inform disease response moving forward. NPIs include things like mask mandates, quarantine procedures, and travel restrictions. The last two years have given us the opportunity to see how effective different strategies are against a respiratory disease like COVID. Next time, the world will be ready to deploy cheap and easy tools like masks much quicker, and governments will have a greater understanding of when and how to deploy more burdensome strategies like lockdowns.

Although stopping a pandemic is something that ultimately falls on systems and governments, the last two years have shown us that individuals can make a real impact. We’ve seen incredible people from around the world step up to do heroic work protecting their communities—from teachers who took time to drop off class materials on their students’ doorsteps to health workers who went house to house making sure everyone had the opportunity to get vaccinated. I wrote a separate post profiling several of those heroes from the African continent. You can read about them here.

One area that’s been a mixed bag is therapeutics. Up until the last couple of months, I was disappointed by the lack of progress we’d made on the treatment front. Remdesivir is expensive, and it just didn’t have that big an effect. Dexamethasone is cheaper and helped a bit, but not enough to make a huge dent in stopping disease early. Monoclonal antibodies—which I was quite optimistic about at one point—were too complicated logistically to get out and save that many people earlier in the pandemic, and they weren’t very effective against variants.

The reason I’m now feeling much better about therapeutics is the recent news about two new antiviral drugs. These are the therapeutics we needed in 2020. One of them—a drug called molnupiravir from Merck—just got the seal of approval from the FDA for people at high-risk last week. It significantly reduces your chances of being hospitalized or dying from COVID-19 (although not as much as we’d initially hoped), it’s relatively cheap to make, and it’s an oral medication that’s easy to distribute.

Earlier this year, before we knew the drug worked, the foundation supported an effort to streamline the process of producing molnupiravir in order to bring costs down. Merck is letting generic manufacturers make this simplified formulation, which will make the drug accessible to a lot more people. We also recently committed $120 million to making sure the drug is available in lower-income countries where it will save a lot of lives. I just wish it had come along sooner.

The area I see as the biggest disappointment is the inequity of vaccine allocation. This is something I’ve written about at length and something I’m going to keep talking about any chance I get, because it didn’t have to be this way. The world has done an outstanding job manufacturing and distributing billions of doses of vaccine, but the fact that so few people at high risk in low-income countries have received them is unacceptable. It just doesn’t make sense that so many low-risk people got vaccinated before we reached everyone who’s older or had an underlying medical condition. Moving forward, we need to change how the world allocates doses and find ways to ramp up manufacturing even faster, including by expanding global vaccine-making capacity and helping more countries develop, manufacture, and approve vaccines themselves.

The other area where there is huge room for improvement is in finding ways to combat disinformation. As I mentioned, I thought demand for vaccines would be way higher than it has been in places like the United States. It’s clear that disinformation (including conspiracy theories that unfortunately involve me) is having a substantial impact on people’s willingness to get vaccinated. This is part of a larger trend toward distrust in institutions, and it’s one of the issues I’m most worried about heading into 2022.

Declining trust makes it harder to tackle big challenges

I’ve had a lot of people ask me recently if I’m still optimistic about the future. While the answer is yes, being an optimist doesn’t mean ignoring problems. I am deeply troubled by one challenge in particular.

The pandemic has been a massive test of governance. When the pandemic finally comes to an end, it will be a tribute to the power of global cooperation and innovation. At the same time, this era has shown us how declining trust in public institutions is creating tangible problems and complicating our efforts to respond to challenges. Based on what I’ve seen over the last couple of years, I’m more worried than I’ve ever been about the ability of governments to get big things done.

We need governments to take action if we’re going to make progress on challenges like avoiding a climate disaster or preventing the next pandemic. But declining trust makes it harder for them to be effective. If your people don’t trust you, they’re not going to support major new initiatives. And when a major crisis emerges, they’re less likely to follow guidance necessary to weather the storm.

This decline in trust is happening all over the world. The 2021 Edelman Trust Index shows worrying drops across the globe. Part of it is understandable: Any time you have a really big crisis like a pandemic, people look for someone to blame. Governments are an obvious target.

But this trend toward less trust in government didn’t start in 2020. The pandemic only made clearer what had already been happening.

So, who or what is to blame? It’s clear that increased polarization is a significant driver. This is especially evident here in the United States, although we’re far from alone. Americans are becoming more divided and more deeply entrenched in their political beliefs. The gap between the left and the right is becoming a gulf that’s harder and harder to bridge.

There are many reasons for this growing divide, including a 24-hour news cycle, a political climate that rewards headline generation over substantive debate, and the rise of social media. I’m especially interested in understanding the latter, since it’s the most technologically driven.

Digital communication has profound benefits in terms of helping people collaborate, stay in touch, and share things with each other. But social media has played a huge role in spreading misinformation that makes people suspicious of their governments. Social media feeds have become so personalized that you don't see factual information if it doesn't align with your profile.

I believe that governments need to regulate what you can and can’t use social media for. In the United States, this topic has raised a lot of free speech questions. But the reality is that our government already has all sorts of norms around communication.

You can’t slander someone or trick them out of their money by promising something you don’t deliver on. Network TV shows can’t show explicit sex scenes or use certain profane language before 10 p.m. in case children are watching. These rules exist to protect people. So why couldn’t our government create new rules to protect them from the most tangible harms created by social media? They wouldn’t be easy to enforce, and we’d need public debate about exactly where the lines should be, but this is doable and really important to get done. A video falsely claiming that the COVID-19 vaccine makes you infertile should not be allowed to spread widely under the guise of being news.

As people become more polarized on both sides of the aisle, politicians are incentivized to take increasingly extreme positions. In the past, if you didn’t like the way a government agency was operating, you’d run on a platform of fixing it. Today, we’re seeing more people get elected on the promise of abandoning institutions and norms outright.

When your government leaders are the ones telling you not to trust government, who are you supposed to believe? This creates a compounding effect where people lose confidence in government, elect politicians who share their distrust, and then become even more disillusioned as their leaders tell them how bad the institutions they now run are.

This is usually where I’d lay out my ideas for how we fix the problem. The truth is, I don’t have the answers. I plan to keep seeking out and reading others’ ideas, especially from young people. I’m hopeful that the generations who grew up online will have fresh ideas about how to tackle a problem that is so deeply rooted in the Internet.

“This is usually where I’d lay out my ideas for how we fix the problem. The truth is, I don’t have the answers. I plan to keep seeking out and reading others’ ideas, especially from young people.”

This problem requires more than just innovation to solve, although there are some steps we can take (especially around e-governance and making data more available to the public) to make modest improvements. There are all sorts of ways that great scientific ideas get published and tested. For great political ideas, the pathways are not as clear. Thinktanks and academics can point in the right direction, but at the end of the day—in a democracy at least—it seems to me like you need to pick the right leaders and give them the space to try new ideas.

What we can learn about progress from the climate conversation

There’s a phrase we like to use at the foundation: Progress is possible, but not inevitable. Change happens because groups of people get together and decide to make things better. It might not happen as quickly as you want or need it. But if you have enough smart, thoughtful, and passionate people pushing for it, progress will eventually come.

I was reminded of this at the recent COP26 climate conference in Glasgow, Scotland. The climate conversation is often singled out as an area stymied by disagreement. In the past, there was a lot of debate about whether we had all the tools we needed to solve this problem. Now, there's a lot more agreement that we have some of what we need, but not all of it—and that we need to prioritize closing that gap if we’re going to avoid a climate disaster.

I was blown away by the enthusiasm and intense engagement in Glasgow, especially compared to the last major COP conference in 2015. Everywhere you looked, you saw leaders from around the world—including lots of government officials and CEOs—eager to make real commitments.

The biggest change I saw compared to 2015 was the focus on innovation. There is now a broad understanding that innovation needs to be at the forefront of any plan to get to zero emissions by 2050. The private sector is playing a central and necessary role alongside governments and nonprofits. It was encouraging to hear leaders from various industries that need to be part of the transition—including shipping, mining, and financial services—talk about their practical plans to decarbonize and to support innovation.

I spent a lot of time at the conference talking to people about how new green technologies need to be affordable enough for the whole world to use them. If we’re going to scale the innovations that get us to zero, we need to reduce the cost difference between things that emit greenhouse gases and things that don’t. I call this difference the Green Premium, and addressing it needs to be an essential part of any climate plan.

I was also excited to see so much attention paid to adaptation. We will lose the global fight against poverty if we don’t help the world’s poorest adapt to climate change, especially subsistence farmers who rely on the food they grow to feed their families and are the most at risk. Even if the world hits its goal of net-zero by 2050, we’ll still experience significant warming. That will create huge problems for people in low- and middle-income countries unless we take steps now to help them, such as developing new crops that are more productive and can withstand weather changes.

In short, this conference made it clear that the world is engaged and making progress. The result was a number of important concrete steps, like new commitments to investing in clean technologies, pledges to cut methane emissions and end deforestation by the end of the decade, and the creation of a coalition that will help farmers adapt.

None of this happened by accident. The improvements made over recent years are a testament to the activists, elected officials, business leaders, philanthropists, and engaged citizens fighting to move climate change up the global agenda. We still have a lot more work to do—even if every commitment made at the COP is fulfilled, we still won’t hit our target of limiting global warming to less than 2 degrees—and I hope the world builds on the progress made in Glasgow. But I’m optimistic that we have the momentum necessary to avoid a climate disaster.

2021 gave us a preview of our more digitized future

Even after this pandemic ends, it’s clear that much of the digitization it brought on is here to stay. The last two years have led to monumental leaps forward in how we use technology, accelerating changes that would’ve taken years—if not a decade or longer—otherwise. We’ve seen rapid, widespread adoption of services that already existed, like ordering groceries online or having meetings over video chat. And we’ve seen the creation of new innovations that I think only represent the tip of the iceberg of what’s to come in the years ahead.

Digitization is here to stay, but the technologies we’re using will continue to get better over time. We’re just at the start of how software will enable innovation. The more we use digital tools, the more feedback we get about how to make them better. It’ll take at least a decade to understand the full scope of the pandemic’s impact on digitization, but I predict we’ll see big changes in three areas.

The first and perhaps most significant is office work.

The pandemic has revolutionized how companies think about productivity and presence in the workplace. The boundaries between once-discrete areas of work—brainstorming, team meetings, casual conversations in the hallway—are collapsing. We’re starting to see structures evolve that we thought were essential to office culture, and those changes will only intensify in the years to come as businesses and employees settle into new permanent ways of working.

I’m really excited about the potential for experimentation. Expectations around what productivity looks like have been upended. I see lots of opportunity to rethink things and find out what is working and what isn’t.

“I’m really excited about the potential for experimentation. Expectations around what productivity looks like have been upended. I see lots of opportunity to rethink things and find out what is working and what isn’t.”

For example, there has been a lot of debate about whether companies should stay completely remote, plan a full return to the office, or find some compromise between the two. Although most companies will likely opt for the hybrid approach, there’s a good deal of flexibility around what exactly that approach might look like. What if your employees set their own schedule? Do you have people work from the office on Mondays and Fridays, or do you ask them to work remotely on those days knowing that traffic might be worse around the weekend?

I don’t see any reason why companies need to make firm decisions right away. As the pandemic ends and things start to become more normal, this is a great time to take an A/B testing approach to remote work. Maybe you have one team try one configuration while a different team tries another, so that you can compare the results and find the right balance for everyone.

(It’s worth repeating that I’m talking about office jobs. The pandemic disrupted work in virtually every industry. There are huge sectors of the economy where things won’t change as much or will change in different ways from what I’m describing here.)

I’m also really interested in how technology can create more spontaneity with remote work moving forward.

This is the biggest thing you lose when you’re not in the office. Let’s say you used to work in an open space with six other people. You could look up at any time and see what they were up to. You could tell whether they felt like talking, giving you advice, or just taking a break to chat about non-work stuff. That kind of spontaneous interaction stopped when many of us began working from home—you aren’t exactly going to have an unplanned conversation with a colleague about your last meeting in your living room. But there are a lot of innovations in the pipeline to replicate that experience at home.

If you had a second screen that was very cheap and a physical place to put it, you could have a feed of all six of you sitting in your home offices working. You could look at the screen to see what everyone is doing (except when someone wants privacy and turns the camera off). When someone seems like they’re free to talk, you could just click on their video, zoom in, and start chatting. This isn’t radically different from how collaboration tools work today, and it’s something we have the bandwidth and software power to do now.

I think we’ll soon start to see an even bigger shift. People shouldn’t assume that the quality of the software that lets you have virtual experiences will stay the same. The acceleration of innovation is just starting.

Within the next two or three years, I predict most virtual meetings will move from 2D camera image grids—which I call the Hollywood Squares model, although I know that probably dates me—to the metaverse, a 3D space with digital avatars. Both Facebook and Microsoft recently unveiled their visions for this, which gave most people their first view of what it will look like.

The idea is that you will eventually use your avatar to meet with people in a virtual space that replicates the feeling of being in an actual room with them. To do this, you’ll need something like VR goggles and motion capture gloves to accurately capture your expressions, body language, and the quality of your voice. Most people don’t own these tools yet, which will slow adoption somewhat. (One of the things that enabled the rapid change to video meetings was the fact that many people already had PCs or phones with cameras.) Microsoft plans to roll out an interim version next year, which uses your webcam to animate an avatar that’s used in the current 2D set-up.

There are a ton of companies working on 3D avatars, and I recently had the opportunity to test out some of their prototypes. I was super impressed by what I saw. One of the biggest improvements over what we use now is the use of spatial audio, where speech sounds like it’s actually coming from the direction of the person talking. You don’t realize how unusual it is to have meeting audio only coming from your computer’s speaker until you try something else. There’s still some work to do, but we’re approaching a threshold where the technology begins to truly replicate the experience of being together in the office.

The second area where we’ll see the lasting effects of digitization is education.

Unlike offices, schools will go back to only in-person instruction except maybe for some limited remote options for older high school students. What will change, though, is how we use digital tools to enhance the way kids learn.

The ability of new digital education tools to transform the classroom is, of course, dependent on kids having access to technology at home. The access gap has narrowed since the start of the pandemic and will continue to narrow, but a lot of kids still don’t have a decent computer or reliable, fast internet at home. Finding ways to expand access is just as important as the development of new innovations.

The pandemic accelerated the development of dynamic curricula, as more teachers had to rely on digital tools to give students assignments during the periods when schools were closed. We’re starting to see that curriculum become more responsive as demand goes up, and it will only become more tailored to the individual needs of students and teachers in the years ahead. The intention is that these new tools will supplement classroom learning rather than replace it. (If there’s one thing the last two years made clear, it’s that many kids—especially younger ones—don’t do well sitting in front of a screen doing classwork all day.)

If you’re a student, you’ll be able to get feedback from the software while you do your homework online. The content will be more interactive and personalized to you, helping you focus on areas where you need a bit more help while boosting your confidence by giving you problems you’re more comfortable solving.

If you’re a teacher, you’ll gain a deeper understanding of how your students are doing. A simple button click will show you that student X might need more help on a particular type of question while telling you that student Y is ready to take on a more advanced reading assignment.

The foundation has been working on innovative new tools like this for years, and it’s been great to see so much progress made over the last two years in response to the pandemic.

Some of the biggest leaps forward have been in math curricula. A lot of kids develop a self-image of not being good at math. They struggle with problem sets that are perhaps too hard for their current skill level, and they never catch up as classes become more advanced. It’s a big problem that I’m optimistic we can solve with technology.

The foundation is working with partners on new curricula that help kids become more confident in their math skills. I’m so excited about this work—and have so much to say about it—that I wrote a separate post detailing some of the most promising examples. You can read it here.

The final area where digitization is here to stay is in health care.

Telehealth isn’t new, but its popularity during the pandemic was. Over the last two years, we’ve seen more people opting for virtual appointments instead of in-person care. The technologies that facilitate these appointments are already getting much better, and I expect huge improvements over time.

Although some medical fields have gone back to mostly in-person visits, one area that I predict is forever changed is behavioral health. Virtual appointments have so many upsides that I think the new model is here to stay.

Seeing your therapist is a lot less time-consuming and easier to fit in your day when you only have to turn your laptop on. Sessions can be as long or as short as needed—a 15-minute session might not feel worth it if you have to go to a doctor’s office, but it makes a lot more sense from home. Plus, many people feel more comfortable in their own spaces than in a clinical setting.

Other types of doctor’s visits might become more flexible as new tools emerge, too. Right now, when it’s time for your annual physical, you probably need to go into your doctor’s office to get your vitals taken and your blood drawn. But what if you had a device at home that your doctor could control remotely to test your blood pressure? What if he or she could look at data collected from your smart watch to see how you’re sleeping and what your active heart rate is? What if you could get your blood tested at a convenient place in your neighborhood—maybe at your local pharmacy—that sends the results directly to your doctor? What if you could keep seeing a primary care physician you like even if you moved to another state?

These are all real possibilities in the future, and I’m curious to see how they transform health care. Beyond the technology and privacy limits, there are also regulatory hurdles we need to figure out before digital health care becomes truly mainstream. Some states still make it hard to see patients virtually in a different state because of how licensing currently works.

As unbelievable as it sounds, we’re only starting to see how digitization is going to change our lives. There is so much potential for technology to create more flexibility and options for people. I’m hesitant to suggest that anything about the COVID-19 pandemic has been positive. But when we look back at this period, I suspect history will view it as a time of terrible devastation and loss that also sparked lots of massive changes for the better.

Reasons for optimism in 2022

My work has always been driven by a simple idea: The world can get better. A big setback like the pandemic makes it harder to believe that progress is possible. I’m still optimistic, though, about our ability to build a world where everyone has the chance to live a healthy and productive life.

But that ability is dependent on whether we can stop the next pandemic. We can’t afford to repeat the suffering of the last two years. The world had a chance to invest in the tools and systems that could’ve prevented the COVID-19 pandemic, and we didn’t take it. Now is the time to learn from our mistakes and take steps to prevent this terrible experience from ever happening again.

The good news is that the world no longer needs to be persuaded that stopping a pandemic is important. I’m hopeful that we’ll see broad support for pandemic preparedness efforts, and I plan on spending a lot of time advocating for them. This is the biggest and most important thing I’m going to work on in 2022. I’m currently writing a book that will come out some time next year, which lays out my plan for making sure that COVID-19 is the last pandemic.

“The good news is that the world no longer needs to be persuaded that stopping a pandemic is important. I’m hopeful that we’ll see broad support for pandemic preparedness efforts, and I plan on spending a lot of time advocating for them.”

I think we’ll see plenty of other reasons for optimism in 2022 as well, especially on the innovation front. I expect lots of progress as R&D that was put on hold by the pandemic picks up steam.

One of the things I’m most excited to track is the clinical trials for a promising new HIV preventative called islatravir. Today, you can reduce your risk of getting infected by either taking a pill every day or what’s called “on-demand prophylaxis.” Although both current options provide terrific protection, the former relies on the ability to take it regularly, and the latter requires planning ahead.

Islatravir is a pill that you take just once a month. The first results from the Phase II trials were released this summer, and they’re terrific so far. I look forward to seeing more next year, as well as following progress on Phase III trials. Our foundation helped fund a Phase III trial of the drug in Africa, which started in early 2021 and will study how effective the drug is for young women for the next several years.

Another area to watch for in 2022 is Alzheimer’s diagnostics. Huge progress has been made on this front recently, and there’s a decent chance that the first affordable, accessible blood test for Alzheimer’s will get approved next year. Although this won’t be a gamechanger yet for people who have the disease—which currently has no cure or even a way to slow it down—this test will accelerate progress in the quest for a treatment breakthrough.

I’m also looking forward to continuing the work of Breakthrough Energy Ventures, Catalyst, and Fellows to make clean-energy innovations more available and affordable for everyone. They’re enabling breakthroughs across a broad range of areas, many of which are still years away. One area where we might see some real progress soon is in making green hydrogen fuels more affordable. This would be a huge step forward, because hydrogen fuels would enable long-duration energy storage and could be used to run things like large planes and industrial processes.  

Settling into a new normal

I’ve never been a big New Year’s resolution person. I don’t have any specific goal in mind for 2022 (although I guess I still have a couple more weeks to think of one). But what I do hope is that next year is a lot more settled than this one.

Human beings are naturally resistant to change. Whether it’s the massive global upheaval of the last two years or transitions closer to home, it’s never easy to adjust to new ways of living.

I think 2022 will be a year when many of us finally settle into a post-pandemic new normal. For me, that will mean going into the office a bit more as COVID cases hopefully go down. I want to find a new rhythm at home now that all three of my kids have moved away and my day isn’t as structured around finding time to spend with them. I’m looking forward to spending more time engaging with people through my blog and other channels. I’d like to keep up my COVID-era habit of watching lots of educational videos on YouTube and subscription services like Wondrium, because they’re a really great way to learn about obscure topics. (I now know more about glassmaking, birdwatching, and the history of American Samoa than I ever expected.)

I hope you and your loved ones also find a way to create new routines. There’s no question that the pandemic will create huge, lasting changes that will take years to fully understand, which can feel scary. One of my favorite authors, Yuval Noah Harari, once wrote that, “people are usually afraid of change because they fear the unknown. But the single greatest constant of history is that everything changes.”

The world has adapted to big disruptions before, and we’ll do it again. In the meantime, I wish you a very happy holiday season.

By Bill Gates 7th December 2021

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

Last month’s oil market report can be found here:

Monthly Oil Market update Nov 2021. - Goff Petroleum

Oil Market, Exchange Rate and Heating Oil Price Information November 2021.

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $84.74                Price at End of Month: $74.90

Highest Price in Month: $84.77                Lowest Price in Month: $74.90

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.3677                              End of Month: 1.323

Kerosene (Heating Oil) Cargo Price $ per tonne  

Start of Month: $746.75                                           End of Month: $619.50

Highest Price in Month: $746.75                            Lowest Price in Month: $619.50

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 6.88 ppl

Market Commentary on the Newsfeeds:

Oil Prices Bounce Back After ‘Black Friday’ Collapse

- Oil market participants appear to agree that the price collapse on Friday was an overreaction, with the prices climbing by more than 5% on Monday morning

- While there is a renewed threat of demand destruction due to the Omicron variant of Covid, OPEC could counter that threat by pausing its production increases

- Brent crude is back above $75 while WTI has climbed back above $70 as panic eased

Oil prices gained over 5% early on Monday, as traders were assessing the threat to demand from the Omicron Covid variant and the potential pause of monthly increases in production from the OPEC+ group.

As of 9:57 a.m. EST on Monday, WTI Crude was back to above $70 per barrel, at $72.28, up 6.25% on the day. The U.S. benchmark slumped to $69 on Friday when the market was panicking over Omicron, the new heavily mutated coronavirus variant detected in South Africa, which the WHO classified as a “variant of concern.”

On Monday, Brent Crude was trading at $76.29, up 4.91%, as of 9:57 a.m.

Panic over whether the still little-researched new variant will escape vaccine protection led to a crash on all markets on Friday, and crude oil led the plunge as countries started to announce bans on flights from African countries. The low liquidity on the oil market in the festive period in the U.S. also contributed to the collapse in prices, which was the largest one-day crash since April 2020.

On Monday, the markets were rebounding as traders, investors, and speculators are awaiting scientific evidence of whether Omicron should be as feared as the oil market appeared to fear on Friday.

The World Health Organization (WHO) said on Sunday that it was not clear yet if Omicron is more transmissible or if infection with Omicron causes more severe disease compared to infections with other variants, including Delta.

Oil market participants are also weighing the possibility that the OPEC+ group will decide later this week to pause the monthly increases in its oil production. Some analysts believe that the alliance could scrap a January increase in production, although Russia and Saudi Arabia hinted on Monday that there is no need to rush to hasty decisions.

“We believe the group could take a pause in its current supply increases,” due to a potential hit to demand from Omicron, ING strategists Warren Patterson and Wenyu Yao said on Monday.

“The group may decide to postpone the January production increase or if necessary, temporary cut production into a period that was already expected to see the return of a balanced market,” said Ole Hansen, Head of Commodity Strategy at Saxo Bank. 

By Charles Kennedy for Oilprice.com 29^TH Nov 2021

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

Last month’s oil market report can be found here:

Goff Heating Oil Price Information October 2021 - Goff Petroleum

Top up your tank today!

What's up with my oil fired domestic heating system?

What is this boiler lockout light and why is it on?

We get so used to turning on the hot tap and having hot water come out that it comes as a shock when the hot is cold and your house is too.

When you only have cold water from the hot tap, or you come home to a cold house in winter, there is a high probablility that you will find the lockout light on your boiler illuminated.

What is ‘boiler lockout’ and why does it occur?

When a boiler recognises a fault, most commonly through its flame sensor, it has a safety mechanism to automatically lock-down to prevent further damage. This safeguard is referred to as lockout in oil fired boilers. As well as recognising a problem, the safeguard is designed to prevent additional problems, and one part of the lockout is the interruption of your oil supply. If your oil fired boiler is in lockout then it will need to be reset, to restore function.

If you you’re unsure if your boiler is in lockout mode, check for:

An error code on the digital boiler display or boiler control panel.

A flashing red or green light, or an illuminated orange light.

The causes of an oil boiler lockout vary. Older boilers can be more prone to boiler lockout due to general wear and tear and neglected boilers can lockout because they have not been adequately serviced or maintained . Having your boiler serviced regularly can increase reliablilty and performance.

Another cause could be a blockage or restriction in the system that disrupts the oil feed pressure. A blocked filter on your tank, or a failing fuel pump can reduce the required fuel pressure for efficient safe atomisation and burning. Sometimes you may have simply run out of oil!

You can take your own steps to restart a boiler, if you have adequate oil in your tank, and many boiler manuals list these. But remember: Do not exceed your own ability. A persistent problem will probably require a professional solution.

Restart procedure:

1. Check the fault code

This will help clarify the problem, and confirm whether you are experiencing boiler lockout or if there is another fault/problem present.

2. Check your oil level

This is best done manually, e.g. dipping the tank with a garden cane, as both electronic and manual gauges can develop faults and give incorrect readings.

3. Reset your boiler

Once you have confirmed a boiler lockout, you can try pressing the reset button. This is usually found near the light or on the control panel. If you are unsure check your boiler manual to find its location.

4. Hire a professional

If your heating oil tank isn’t running low or has run out we’d recommend booking a repair service with an OFTEC registered technician. They can resolve a host of common problems such as blocked nozzles, dirty filters, or air locks, without leaving you with a large bill.

Goff’s two top tips for preventing boiler lockout.

1. Service your boiler annually.

All oil boiler manufacturers, and OFTEC recommend that your oil boiler should be serviced at least once a year. An OFTEC certified engineer will examine the boiler, check that the nozzles are clean and replace any dirty or faulty filters, and ensure your oil tank is in good condition.

2. Keep an eye on you oil supply.

Your boiler will automatically lockout if you run out of oil, so the best way to prevent this is to monitor your oil use and order in good time for the weather conditions.

EACH (East Anglia's Children's Hospices)

who support families and care for children and young people with life-threatening conditions across East Anglian from their three hospices; Milton in Cambridgeshire, The Nook in Norfolk and The Treehouse in Suffolk.

We will be holding more draws through 2022 so keep your eyes peeled for announcements on Facebook and Twitter and if you have not registered your good cause yet then visit our Good Causes Page.

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $78.62               Price at End of Month: $83.47

Highest Price in Month: $86.16                Lowest Price in Month: $78.62

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.3539                              End of Month: 1.3708

Kerosene (Heating Oil) Cargo Price $ per tonne  

Start of Month: $699.25                                           End of Month: $752.50

Highest Price in Month: $778.00                            Lowest Price in Month: $699.25

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 3.89 ppl

Market Commentary on the Newsfeeds:

The Energy Transition Will Take Decades Not Years 

- With natural gas, coal, and oil prices all soaring this summer, it is clear that a successful energy transition will take decades not years

- Some energy transition proponents may have confused Covid energy demand destruction with a change in consumer behavior

- The truth is that an energy transition can only occur when clean energy can be provided both cheaply and reliably 

This year’s global demand for all three fossil fuels has sent a message to overly enthusiastic proponents of the energy transition - hold your horses.

Those who predicted last year the demise of oil, gas, and coal after the pandemic and those who said that peak oil demand was already behind us because lasting changes in consumer behavior would reduce the use of crude are now facing reality.  

Global oil demand is just a few months away from reaching pre-pandemic levels, while natural gas and coal demand have already exceeded the 2019 volumes.

Sure, international airline travel is still struggling because of COVID-related travel restrictions in place in many countries. But economies are bouncing back, industries are growing, and the world needs a lot of energy, once again.

Fossil Fuels Support Economic Growth

And fossil fuels continue to supply most of that energy and will do so for years to come. Last year’s slump in fossil fuel consumption is being erased, and those who expected oil, gas, and coal demand to never return to pre-COVID levels now know they were wrong.  

Also wrong were all those who hoped the ‘build back greener’ policies that governments pledged last year would suddenly lead to solar, wind, biofuels, sustainable aviation fuels, and hydrogen displacing fossil fuel-generated energy overnight.

Economies are recovering post-COVID, and consumer habits haven’t changed all that much: consumers still want a warm home, power, the latest tech gadgets, and to be able to freely travel and spend money.

Apart from a share of renewables for power generation, solar and wind, for example, are not really providing the energy and all the stuff consumers buy. Fossil fuels do. And they will continue to do so for at least another decade until the energy transition - including in industries other than power generation - accelerates.   

The share of renewable energy sources in electricity generation continues to rise, but renewables are incapable of meeting the rebounding power demand, the International Energy Agency (IEA) said in July.

The IEA also says that if the world were to meet a net-zero target in 2050, it should stop investing in new oil, gas, and coal supply now.  

Yet, these days, both the most developed economies in Europe and the fastest-growing developing economies in Asia - China and India - are experiencing first-hand what undersupplied coal and gas markets mean: very high prices of energy commodities and power supply, and industries halting factories because of shortage of electricity or gas.

Coal And Gas Demand Back Above Pre-Covid Levels

The post-COVID economic recovery drove demand for oil, coal, and gas, with coal and gas consumption already exceeding pre-pandemic levels. As a result, the record slump in global emissions from 2020 is also being erased, posing another conundrum to the global fight against climate change.

On average, coal demand declined by 4 percent last year - the steepest drop since World War II - but it was already back to pre-pandemic levels by the end of 2020, the IEA says. 

“Coal use in the fourth quarter was 3.5% higher than in the same period in 2019, contributing to a resurgence in global CO2 emissions,” Carlos Fernández Alvarez, Senior Energy Analyst at the IEA, wrote in a commentary in March.

This year, coal demand is rebounding strongly in 2021, driven by the power sector, the agency said in its Global Energy Review 2021 in April. Natural gas demand is also bouncing back and is expected to erase the 2020 loss and push demand 1.3 percent above 2019 levels, as per IEA estimates in the same review.  

Oil Demand Set To Reach 2019 Levels Within A Few Months

Oil demand is also on track to soon reach 2019 levels and exceed them. Many analysts and oil companies see global oil demand returning to the pre-crisis levels of 2019 as early as the start of next year, if not earlier, by the end of 2021. According to OPEC’s latest estimate, global oil demand in 2022 will average 100.8 million bpd and exceed pre-COVID levels.

The current gas, coal, and power crisis in Europe and Asia is also set to accelerate oil demand recovery in the winter if gas-to-oil switching becomes more widespread.

By early 2022, demand for all fossil fuels is expected to have reached or exceeded pre-pandemic levels, highlighting the challenges of the energy transition to secure reliable - and preferably affordable - energy for the world.

“The energy transition and decarbonisation are decade-long strategies and do not happen overnight,” Cuneyt Kazokoglu, head of oil demand analysis at consultancy FGE, told Reuters.

Last year’s slump in fossil fuel demand had nothing to do with the energy transition: it had everything to do with the lockdowns and economic decline, Kazokoglu said.

A rushed transition without considering the still enormous role that fossil fuels play in the economy and consumers’ lifestyle risks exposing the global energy market to supply crunches and price spikes.

“Prices for fossil fuels will remain volatile, perhaps more so than today since the risk of a supply-demand imbalance is greater in a market that is shrinking where the case for further investment is weak, which could produce short-term rallies,” Nikos Tsafos, the James R. Schlesinger Chair for Energy and Geopolitics with at Washington-based Center for Strategic and International Studies (CSIS), wrote in a commentary last month.

The price of commodities critical for the energy transition - such as the key metals lithium, cobalt, nickel, or copper - are also prone to volatility, Tsafos notes.

The energy transition will not be smooth sailing and will take decades. In the meantime, fossil fuels will continue to support the global economy and the security of the energy supply.

Even the IEA, while saying that well-managed energy transitions would be the solution - not the problem - in the current gas and power crises, acknowledged that “The links between electricity and gas markets are not going to go away anytime soon. Gas remains an important tool for balancing electricity markets in many regions today.”  

By Tsvetana Paraskova for Oilprice.com 5^th Oct 21

A Cold Winter Could Send Oil Prices Soaring Past $100

- Meteorologists are predicting a cold winter, and it could send energy prices even higher.

- Record-high natural gas prices forced some utilities to switch to oil derivatives instead, boosting demand for crude.

- Though oil prices might break $100, they are unlikely to stay there for long.

The spike in oil prices to the highest in years after OPEC+ said it will not add more barrels than the initially agreed 400,000 bpd monthly was expected. The forecasts by bank analysts that oil could go higher before the year is over were also expected. Now, some are expecting a further climb towards $100. The good news is that even if it happens, it won’t last. Goldman Sachs recently updated its oil price forecast for the final quarter, saying it now expected Brent crude to reach $90 per barrel by the end of December. Before that, the bank said oil demand could jump by 900,000 bpd if the winter was colder.

“While we have long held a bullish oil view, the current global supply-demand deficit is larger than we expected, with the recovery in global demand from the Delta impact even faster than our above-consensus forecast and with global supply remaining short of our below consensus forecasts,” the bank’s commodity analysts said in late September.

Then Bank of America said oil could hit $100 per barrel because of the energy crunch that has now gone global, with U.S. Energy Secretary Jennifer Granholm saying this week the department could release oil from the country’s emergency reserve to lower gasoline prices. The bank went on to warn that this could make the global economic recovery stumble badly.

The bank pointed to the record-high natural gas prices that forced some utilities to switch to oil derivatives instead, boosting demand for crude and, like Goldman, noted the prospect of a cold winter as another bullish factor for oil.

“If all these factors come together, oil prices could spike and lead to a second round of inflationary pressures around the world,” BofA analysts wrote in a note. “Put differently, we may just be one storm away from the next macro hurricane.”

Yet even if Brent hits $100 per barrel, it is unlikely to stay there for long, according to John Driscoll, chief strategist at JTD Energy Services. And it would take a lot of things to happen for the benchmark to reach this price level.

“I see that as kind of a lower probability scenario. That is, if everything goes wrong, if we have Arctic weather, if we’ve got glitches, breakdowns in the deliverability, the supply chains. That is a possible scenario but I don’t see that likely to be sustainable,” Driscoll told CNBC this week.

It will all depend on the weather, it seems. All forecasters mention a cold winter as a key factor for all energy prices, and all seem to expect it.

“You could see an off-the-charts spike — that is one scenario out there,” Driscoll went on to tell CNBC. “I don’t really hear anybody talking about the prospects of a mild subdued winter. I think, given all the uncertainty over weather and climate change, we could be in for a wild ride here.”

Yet the weather is impossible to predict with any accuracy over longer periods of time, and indeed, current forecasts for the winter season differ dramatically among meteorologists, as Bloomberg reported earlier this month. 

The rational thing to do, of course, is to plan for the worst possible scenario, which would be a very cold winter. Indeed, this was what Europe and China tried to do and what became one big reason for the gas price spike. Yet some of that spike, at least, was the result of speculation rather than fundamentals. The fact that gas prices dropped by $50 after Russian President Vladimir Putin effectively said the country will supply additional gas to Europe is quite telling.

By Irina Slav for Oilprice.com 7^TH Oct 21

UK Government Needs To Do More To Combat Energy Crisis: Industry Leaders

Heavy industry bosses in the UK have been piling pressure on the government to provide emergency cash to manufacturers struggling to cope with surging energy costs.

Business secretary Kwasi Kwarteng said he was in talks with the Treasury to provide emergency funding to heavy industry firms, but the claim was quickly slapped down by anonymous sources at the Treasury.

A Treasury source said Kwarteng had “made up” the talks, although Number 10 said, “Treasury officials are working with Beis (the Department for Business, Energy and Industrial Strategy) as the lead department and Beis is working with a number of different departments on this”.

The row has left industry bodies desperate for clarity around whether the government will come to the rescue of manufacturers that are being driven to the brink by surging energy costs.

Gas prices have risen by more than 250 percent since January, which has seen 12 challenger UK energy firms go bust this year.

This has put serious pressure on many industrial firms that are high energy users as they do not benefit from the energy price cap afforded to households.

Director general of UK Steel Gareth Stace today told Times Radio that Boris Johnson needs to “bang ministerial heads together, and take control himself as the Prime Minister”.

He is calling for the government to cut “policy costs” around “carbon costs, renewables, capacity, and network charges”.

“The government could press a button, pull a lever, and address those additional costs that our competitors don’t pay,” Stace said. 

“And then secondly, address the wholesale price. And that is in the short term, temporary, saying to government, provide us with a certain amount of capacity at a competitive price in that short term that will get us over this energy crisis now.”

“If you don’t do this now, then what is an energy crisis today could turn into a steel industry crisis in the future.”

Speaking to journalists today, Johnson’s official spokesman said: “It’s a piece of work across government – Treasury officials are working with Beis as the lead department and Beis is working with a number of different departments on this. It’s right we have those discussions in the industry.”

By City AM 11^th Oct 21

Why $80 Oil Won't Destroy Demand

- Global oil demand is on course to recover to pre-pandemic levels by the end of the year

- U.S. demand is leading the way, with petroleum product demand approaching all-time highs this summer

- The rollout of vaccines across Asia is only going to speed up the  recovery of global oil demand

The $80 per barrel threshold may not be the limit for oil prices in the coming months as global demand recovery continues and record natural gas prices spur more demand for oil products for power generation and heating. 

Despite the still lingering concerns over the Delta variant in many countries, mobility in developed economies continues to narrow the gap with 2019 levels amid higher vaccination rates and strong economic recovery. Although developing economies in South and Southeast Asia are still imposing intermittent localized lockdowns, oil demand globally continues to grow and is set to reach pre-pandemic levels within a few months.  

So, 2019 was not the year of peak oil demand, as some analysts predicted in the first half of 2020 when COVID had most of the world on lockdown.  

In addition, the skyrocketing natural gas and power prices are boosting the overall energy market rally and are set to result in more oil product demand in a gas-to-oil switch, especially in parts of Asia. 

On Friday, the U.S. benchmark, WTI Crude, broke above $80 per barrel for the first time since 2014 as the world scrambles for energy supplies for the winter. Early on Monday, oil continued to rise in Asian trade, with Brent Crude topping $84 and WTI at $82. 

The rally in prices is not only the result of the energy supply crisis in Europe and Asia. 

Global oil demand continues to recover at a healthy pace, although the pandemic is still with us, Ed Crooks, Wood Mackenzie’s Vice-Chair, Americas, notes. 

The pandemic is still a factor on the global oil market, but “its impact on the world economy and on energy demand is fading,” Crooks wrote in a commentary on Friday. 

WoodMac - like many other consultancies, analysts, and oil majors - expects global demand worldwide, even at its uneven pace across regions, to reach pre-COVID levels by the third quarter of 2022. 

This quarter, global oil demand is forecast to grow to around 99 million barrels per day (bpd), up from 97 million bpd in the third quarter, when demand rose by 6 percent compared to the third quarter of 2020, according to Wood Mackenzie.

Oil demand globally is recovering from the summer Delta variant spike faster than some observers had expected. Then, soaring prices of natural gas and coal in Europe and Asia are forcing more gas-to-oil switching at power generating units globally, further pushing up demand for oil. 

Many analysts and oil companies see global oil demand returning to the pre-crisis levels of 2019 as early as the start of next year, if not earlier, by the end of 2021. 

Oil demand in the United States is at the forefront of recovery, with petroleum product demand over the summer approaching its all-time highs at about 21 million bpd, Wood Mackenzie’s Crooks notes. 

“Mobility data show that even as the Delta variant of Covid-19 caused a surge in US infections, people kept driving,” he added. 

The rollout of vaccines in developing economies in Asia will likely ease the pressure for intermittent lockdowns in the region. The countries with slower demand recovery than the U.S. can be expected to catch up, according to Suzanne Danforth, Wood Mackenzie’s Americas markets lead for downstream oil. 

“The rebound in high-income countries with high vaccination rates is giving an indication of what other countries can look forward to,” WoodMac says. 

As demand recovery continues, the supply side is also putting upward pressure on oil prices, after OPEC+ decided last week to keep plans for easing the cuts unchanged, despite calls for more supply from consuming countries, including the United States. OPEC+ will increase supply in November by 400,000 bpd - the minimum the market was expecting ahead of the meeting.  

Tightening oil and other energy commodity markets have rekindled speculation about how high oil prices could go and whether they could reach $100 a barrel, especially if this winter in the northern hemisphere turns out colder than usual. 

The $80 a barrel threshold is typically seen as the trigger of demand destruction, but with tight natural gas and coal markets globally, this winter’s demand-destruction price point could be higher. 

By Tsvetana Paraskova 11^th Oct 21

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

Last month’s oil market report can be found here:

Goff Heating Oil Price Information September 2021 - Goff Petroleum

If you have less than a third of a tank left we’d recommend you order now to ensure you don’t run out.

You can request a quote online or call our friendly sales team on 01953 713555

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $72.45               Price at End of Month: $78.88

Highest Price in Month: $79.40                Lowest Price in Month: $72.45

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.3786                              End of Month: 1.3483

Kerosene (Heating Oil) Cargo Price $ per tonne       

Start of Month: $617.50                                           End of Month: $701.75

Highest Price in Month: $701.75                            Lowest Price in Month: $617.50

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 5.8 ppl

Market Commentary on the Newsfeeds:

World’s Third-Largest Oil Importer Sees Rebound In Demand

India's crude oil demand has been on the mend since mid-summer. It is likely to continue along this same vein for quite a while, with at least one refiner planning to boost refining capacity considerably.

India, the world's third-largest oil importer, has become a key factor for oil prices because of its overwhelming dependence on imported crude. During the latest wave of Covid-19 infections in the country, oil demand suffered an expected slump. But now things are looking up.

Reuters reported last month that in July, Indian refiners increased run rates to the highest in three months in response to strong fuel demand that followed the relaxation of movement restrictions after the worst of the wave. The outlook for demand remains upbeat, too. Gasoline demand in the country is expected to hit a record high during the current fiscal year because of the pandemic. As in other places, people in India are shunning public transport in favor of personal vehicles to reduce their risk of infection.

Sales of passenger vehicles in India soared by as much as 45 percent on the year in July, according to a Reuters report from earlier this month. The report attributed the boom to pent-up demand. Still, it must have also had something to do with the shift to personal transportation at the expense of public transportation.

The resulting surge in gasoline demand could be so strong as to require additional imports, an industry insider from a state-owned refiner told Reuters. Boosting local gasoline production was not an option because Indian refiners were drowning in unsold diesel and had no space for throughput increases until these inventories went down.

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The diesel problem is not confined to India, by the way. Asian refiners are struggling with an inventory overhang seen at 600,000 bpd as of August, per a recent Bloomberg report. Despite lower diesel exports from China, margins for the fuel remain slim, the report said, quoting an Energy Aspects analyst, and prices remain subdued, which is "really telling of how bearish the situation is."

Yet gasoline demand is booming, and refiners are planning capacity increases for the coming years. Indian Oil Corp., for instance, said in August that it planned to boost its refining capacity by 25 percent, or 350,000 bpd, over the next four years. This will bring the total to 1.76 million bpd, Argus reported last month.

The IOC expansion is part of a bigger plan to expand India's oil refining capacity to 6 million bpd in 2025 from 5 million bpd, Argus also reported, citing a junior oil minister. The combined investment in the expansion would come in at $27 billion, the official said.

"Forecasts by various agencies see Indian fuel demand climbing to 400-450 million tonne by 2040 from the present 250 million tonne. This offers enough legroom for all forms of energy to co-exist," IOC's chairman, Shrikant Madhav Vaidya, told Indian media in late August. Demand is already back to pre-pandemic levels, the executive noted.

This fast rebound in oil demand after India became the epicenter of one of the worst infection waves since the start of the coronavirus pandemic suggests it might gain even more importance as a key export market for big oil producers. The suggestion is supported by Saudi Arabia's recent price cut for Asian clients.

On the one hand, the cut could be interpreted as a response to sluggish demand recovery trends in the continent. On the other, however, based on the latest data from India, it may be an attempt to boost market share in one of the biggest consumers of oil, whose thirst for the fossil fuel most expect to continue growing in the coming years and decades.

By Irina Slav 7^th Sept 2021 for Oilprice.com

UK's Lindsey refinery joins Humber carbon capture plans

UK-based Prax Group has joined a project seeking to reduce carbon emissions from energy intensive industries in the Humber region of northeast England. As part of the initiative, the firm is targeting the capture of 1.1mn t/yr of CO2 from its 109,000 b/d Lindsey refinery in Lincolnshire by 2027-29.

The project, known as the V Net Zero Humber Cluster, is led by North Sea-focused oil and gas producer Harbour Energy. Besides Prax, its other members comprise US firm Phillips 66's 230,000 b/d Killingholme refinery, which is close to Lindsey, as well as trading firm Vitol's 1.2GW combined heat and power plant in nearby Immingham and power generation firm EP UK Investments.

The V Net Zero Humber Cluster seeks to transport the CO2 emitted at the various facilities by pipeline for storage in the depleted Viking gas field complex in the North Sea off the Lincolnshire coast. Production at Viking stopped in 2016 and Harbour Energy is in the final stages of decommissioning the field.

Prax's initial target is to capture 1.1mn/yr of CO2 from the Lindsey refinery's heaters and process units, with Harbour Energy in charge of transportation and storage. "This project is likely to be implemented in two phases — the first in 2027 and the second phase will follow in 2029," Prax said.

The move is part of Prax's commitment to develop sustainable strategies for Lindsey. The firm completed the acquisition of the refinery from TotalEnergies earlier this year.

The UK government in March this year announced the allocation of £171mn ($236mn) of funding from its industrial decarbonisation challenge scheme as part of its overall industrial decarbonisation strategy. Some £12mn of that was awarded to Humber Zero, a partnership between the Killingholme refinery and the Immingham power plant. A further £21mn went to the Zero Carbon Humber Partnership project, which includes a hydrogen plant and hydrogen and CO2 pipelines.

By Caroline Varin 7^th Sept 2021

UK Power Prices Soar To Records On High Gas Price, Lack Of Wind

High natural gas prices and low wind speeds have created a perfect storm for the day-ahead power prices in the UK, which hit a new record on Wednesday, beating the one set earlier this week.

Natural gas still accounts for around 30 percent of the UK’s power generation, and with gas prices surging in recent weeks, power prices have also shot up. In addition, low wind speeds are making wind power generation less efficient, further straining the power supply.

With surging natural gas prices and warm and still weather in the UK in recent days, the country fired up on Monday an old coal plant that was on standby in order to meet its electricity demand, the BBC reports. UK fires up coal power plant as gas prices soar - BBC News

The UK has pledged to phase out coal-fired power generation by October 2024. Coal provided 3 percent of the UK’s power on Monday, compared to 2 percent averages in recent months. The UK has relied on some coal-fired power generation every day since mid-August, when there was a three-day run of coal-free electricity supply, a spokesman for National Grid ESO told the BBC.

The UK, as well as the rest of Europe, are bracing for further spikes in power prices when the heating season begins. The natural gas levels in storage in Europe are significantly below normal because of a cold snap in the spring and surging prices of natural gas amid lower shipments from Gazprom and soaring prices for liquefied natural gas (LNG).

For European consumers, energy prices are a pain point, and this year’s surging prices feed into inflation and the cost of goods.

In Germany, Europe’s biggest economy, higher energy prices pushed the annual inflation to a 13-year high in August, as household energy, motor fuels, and food prices jumped. Spain also saw a jump in inflation to the highest in several years due to surging electricity prices.

By Charles Kennedy for Oilprice.com 9^th Sept 2021

Oil Demand Set To Grow Even After 2050, Energy Expert Says 

Even after 2050, global oil demand is set to continue to rise because renewables cannot entirely replace fossil fuels, energy markets expert Anas Alhajji said during a recent energy conference hosted by Nigeria.

 “The impact of climate change policies on oil demand are highly exaggerated – The impact is mostly on demand growth, not on demand itself,” Alhajji said during a keynote speech at the event focused on the impact of the energy transition on oil-dependent economies, as carried by Nigerian outlet Energy Frontier.

The world will need all energy sources even in three decades, the expert said. While technology will be a key enabler of the energy transition, it has its limits, Alhajji noted.

“African countries can reduce their carbon footprint by focusing on energy efficiency and the low hanging fruits, save oil & gas for exports or value added industries and place solar and wind projects strategically.”

Many analysts and forecasters expect global oil demand to peak at some point in the 2030s, or even earlier.

Last year, even OPEC put a timeline to peak oil demand. In its World Oil Outlook 2020 in October, OPEC said it expects global oil demand to exceed the pre-pandemic levels in 2022 and grow steadily until the late 2030s, when it will begin to plateau, in a major shift in its forecast that put a timeline to peak oil demand.

This year, the energy transition and the fight against climate change have become even more topical than during last year’s crisis. Analysts and forecasters are trying to understand and predict how the world’s still significant need of oil would reconcile with the net-zero targets that many countries have already set for 2050, or 2060 in China’s case.

Global primary energy demand is set to only grow in the future.

This higher energy consumption will need greater efforts to reach net-zero emissions, especially considering the fact even surging renewables capacity is unable to meet rising electricity demand. That’s an assessment of the International Energy Agency (IEA), which suggested in the bombshell report in May that net-zero 2050 wouldn’t need any new oil, gas, and coal investments after 2021.

By Charles Kennedy for Oilprice.com 20^th Sept 2021

The Energy Crisis Is Sending Oil, Gas, And Coal Prices Soaring

 - The European energy crisis is going global as the lack of natural gas supply begins to influence oil and coal markets

 - Oil prices are set to break the $80 market as gas-to-oil switching increases oil demand amid continued supply outages

 - Coal prices have hit a 13-year high in Europe and record levels in Asia as more coal is called upon

Just ahead of the winter season, Europe’s natural gas crunch created a snowball effect in global energy markets. What started as very low gas inventories in Europe during the summer is now spilling over into oil, natural gas, and coal prices all over the world, with no quick fix or signs of a major short-term correction in sight. 

Brent Crude Prices Near $80

Brent Crude prices topped $79 per barrel early on Monday - the highest level in three years. Prices are now headed for $80 - a level which some analysts had forecast in the summer, but which not many market participants believed would happen because of the Delta variant depressing prices and demand in some parts of the world in July and August.

However, as the winter heating season in the northern hemisphere approaches, gas and power prices in Europe are surging, driving up coal demand and prices in Europe and globally as more coal is used in the power sector. At the same time, economies are rebounding from last year’s COVID-inflicted slump, with energy-intensive industries growing. But as demand rises, supply stays muted due to underinvestment in new energy supply in the past 18 months, the OPEC+ cuts, and weather-related outages such as Hurricane Ida at the end of August, which constrained U.S. Gulf of Mexico oil and gas supply throughout September.

Because the supply of oil, gas, and coal is struggling to catch up with recovering demand, energy prices are rallying around the world.

Consumers and industries in Europe have already started to feel the pinch from record gas and power prices. Industries across Europe are scaling back operations due to record natural gas and power prices, threatening to deal a blow to the post-COVID recovery. Utilities are firing up more coal-powered electricity generation, pushing demand for coal higher, despite the record carbon prices in Europe and the European Union’s pledges to be a net-zero bloc by 2050.

European coal prices have hit a 13-year high as coal supply to Europe remains constrained and utilities fire up more coal power plants amid surging natural gas prices.

The rally in natural gas prices is also spurring on global demand for coal. China and India are replenishing low stocks of coal, driving coal prices in Asia to records.

Goldman Sachs Doubles Coal Price Prediction

Goldman Sachs has recently nearly doubled its price projection for coal prices in Asia, expecting the benchmark Newcastle thermal coal to average $190 a ton in the fourth quarter, up from a previous forecast of $100 per ton, due to sky-high gas prices ahead of the winter heating season.

In China, a power supply crunch may be looming amid soaring coal and gas prices and electricity demand. Chinese authorities are ordering some factories in the heavy industries to curtail operations or shut down to avoid a power supply crisis, Bloomberg reports.

The gas and coal price spikes globally are set to raise demand for crude oil in the winter as a substitute fuel, analysts and OPEC itself say. A gas-to-oil switch and continued recovery in global oil demand have analysts and major oil trading houses predicting that oil will hit $80 and even $90 this winter - and potentially $100 a barrel at the end of 2022.

“Broader concern over tightness in energy markets, particularly for natural gas, is spilling over into the oil market. The Asian LNG market is trading at an equivalent of over US$150/bbl, while European gas prices are not too far off an equivalent of US$140/bbl. These higher gas prices will lead to some gas to oil switching, which would be supportive of oil demand,” ING strategists Warren Patterson and Wenyu Yao said early on Monday.

Oil price hitting $80 a barrel, however, would be a pain point for many crude importers, including large Asian customers such as China and India.

If the current price strength continues, the OPEC+ monthly meeting on October 4 could see the alliance easing the cuts for November by more than the 400,000-bpd supply increase each month, ING noted.

By Tsvetana Paraskova for Oilprice.com 27th Sept 2021

Are Carbon Taxes To Blame For Europe’s Energy Crisis?

 - Europe’s energy crisis was, in part, caused by the desire of governments to make fossil fuels ‘prohibitively expensive’

 - The common claim that energy can be clean, reliable, and cheap has fallen flat, teaching policymakers a painful lesson

 - The harsh reality about carbon taxes is that they increase the cost of living and likely reduce quality of life

The European energy crisis seems to be the only thing anyone is talking about these days. Analysts opine over why it happened and how likely it is to spread globally (very, is the answer). The focus of most analysis has been overwhelmingly on the supply and demand gap that caused the crisis. In contrast, the underlying reason for the crunch hasn’t received nearly as much attention.

The fact is, Europe has been producing a lot less gas of its own in its drive to ‘go green’. It has made sure nobody really wants to produce gas because carbon taxes make fossil fuel production a lot more expensive. And there are more of these taxes coming, taxes which will only exacerbate this problem.

“Europe’s decarbonisation agenda requires making fossil energy use more expensive. That was always going to be a tough sell. Now that higher prices are suddenly here, it is going to be harder still.” This is what FT’s European Economics Commentator Martin Sandbu wrote in a recent article.

Indeed, the price aspect of the energy transition has been kept out of the public eye by government officials and environmentalist organizations who have all been hard at work hammering home the notion of falling costs for wind turbines and solar panels. As the current energy crunch shows, it’s not all about the falling costs of turbines or panels: even if those costs fall to zero, without sun or wind they cannot generate any electricity.

The harsh truth about a global energy transition

Only a few voices have dared warn that the energy transition will be anything but cheap. One of the big reasons for this would be the strategy of making fossil fuel production and use prohibitively expensive.

The noble idea behind this strategy is to discourage fossil fuel use, which would automatically lower emissions. It’s no wonder that carbon taxes are a popular measure for controlling emissions. They are simple and straightforward, and their effect is immediate. However, there are also side effects; these include higher electricity bills and, eventually, higher prices for everything.

“Gone will be that £19 London-Mallorca return flight on Ryanair,” wrote the FT’s Simon Kuper in an article about “real carbon taxes.” “Our clothes, petrol, meat and coffee will all get pricier. We’ll need to send an army of workers around the rich world’s houses ripping out boilers, installing heat pumps and insulating attics.”

According to Kuper, the current carbon taxes in Europe are more virtue-signaling than climate action. Carbon, he wrote, needs to become a lot more expensive to make a difference in emissions. But with it, everything else will become expensive. Politicians are aware of this, and it is the reason why they have not pushed for much higher taxes, especially after European businesses started complaining about the current carbon prices on the European emissions market.

One could look at this as a classic carriage-before-the-horse situation, in which authorities are pushing for what will effectively be a radical change in people’s way of life before they have ensured this change will be affordable for everyone - instead, European governments followed the Paris Agreement blindly.

On the other hand, the situation could be seen as unavoidable, as many critics have argued. The reason it was inevitable is that renewable energy and related technology has simply not been around long enough to become as dirt cheap as coal used to be before demand caused prices to skyrocket despite, one might note, carbon taxes. There is also the uncomfortable fact that renewable energy generation depends on the weather, which adds a substantial cost in terms of alternative backup sources of energy, which is what we are currently seeing in Britain and Europe.

Carbon taxes, according to pretty much everyone, are the only way to make sure our species reduces its carbon footprint. The higher these are, the better, proponents say, because high carbon taxes would speed up the transition to low-carbon energy. What they don’t say, including all those asset managers making net-zero commitments and urging governments to act more aggressively on emissions, is that this transition to low-carbon energy also means a transition to a lower standard of life.

Politicians like to advertise the energy transition as clean, reliable, and cheap. Yet this, as anyone who has ever worked in manufacturing or services knows, is the equivalent of fast, cheap, and good. You can never have all three at once.

You could therefore have clean and reliable, but it wouldn’t be cheap. Or you can have clean and cheap but, as we can see, it’s unreliable. As for reliable and cheap - these would be the detested fossil fuels that some governments are trying so hard to get rid of that they are willing to shoot themselves in the leg with carbon taxes.

By Irina Slav for Oilprice.com 27^th Sept 2021

Additional Oil Market commentary & Market Data available from BBC Market Data

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

Last month’s oil market report can be found here:

Goff Heating Oil Market Price Information August 2021 - Goff Petroleum

1) Oil Seeps

A fair amount of the oil floating around in the ocean got there honestly, by a natural phenomenon known as oil seeps. No one wants oil companies leaking or spilling oil into the ocean, but according to a 2003 report from the National Research Council, 160,000 tonnes are leaked into North American waters each year through these seeps. The area most susceptible happens to be eco-friendly California, where seeps leak 5 million gallons of oil into the ocean each year. Some slicks caused by these seeps are even visible via satellite and can form miles-long lines of oil.

2) Stop sneezing

Oil and gas have thousands of uses other than transportation and energy. There are about 6,000 different products that are made with oil and gas. Kevlar and Velcro, toilet seats and shower curtains are all made with oil and gas. But without oil, you also wouldn’t have antihistamines, which would make the world a miserable place. Soap, aspirin, hearing aids, contact lenses, and hair dye are just a few more products that rely on oil and gas. 

3) Caped Crusader

Number 3 on our list was not inspired by DC Comics, but did you know there is a Batman refinery. It gets its name not from the Caped Crusader, but because of its location in Batman, Turkey. Batman in Turkish means “sunken”, and the town was named that because it often floods.

4) 18 quintillion litres!

If you know your oil producers, you probably already knew that Venezuela is home to the biggest oil reserves of any country. But did you know that their reserves of 304 billion barrels of oil are enough to supply the entire world with oil for 8.5 years? That’s over 18 quintillion litres of oil, which could fill the Baltic Sea more than twice over.

5) Standard Oil

In 1911 the oil business in the United States was changed forever when antitrust issues caused the goliath that was Standard Oil was broken up into many different companies. But it might surprise you to learn that many of those companies have since merged among themselves, with almost all now part of either BP, Chevron or ExxonMobil. 

6) More Popcorn

According to the Energy Information Administration (EIA), each 42-gallon barrel of crude oil actually yields 45 gallons of petroleum products due to “processing gain”. This is also called the “popcorn phenomenon” as it gets bigger when you pop it.

7) Bamboo Poles

China might be scouring the rest of the world for oil as its own resources are tricky to get to, but China has been in the oil-search game for more than a millennium. The first known wells ever were drilled in China. In 347 AD, oil wells in China were drilled using bamboo poles. Some of those wells were nearly 800 feet deep!

8) Supply and Demand

OPEC manipulates world oil prices by restricting supply because it produces nearly 40% of the world’s oil. And whether you refer to them as an oil cartel or merely as a group, OPEC undeniably plays a pivotal role in moving the oil markets on a global scale. It might be shocking to consider just how much of the world’s oil OPEC members have found. Of the 20 largest oilfields in the history of the world, OPEC members are responsible for 14 of them. Of the world’s top 5 largest oilfields, all are in the hands of OPEC members, from Saudi Arabia to Kuwait, from Iran to Venezuela. The only non OPEC member that has one of the top 10 oilfields is Kazakhstan.

9) Who Killed J.R.? Why Dallas Texas is important.... 

The U.S. states of Texas and North Dakota, combined, produce more crude oil than any other country on the planet except the United States, Russia, and Saudi Arabia. If Texas were a country, it would be the world’s 4th largest oil producer, excluding the United States. In 2020, Texas singlehandedly produced an average of 4.869 million bpd--more crude oil than every country except Saudi Arabia, Russia, Canada. China (and of course the United States).

10) What's with Barrels?

Despite the common measurement in barrels, no one moves oil in physical barrels, but they used to! Measuring oil in terms of barrels comes from the United States. In Pennsylvania in the 1800s, oil was initally stored in whatever was handy, like jars, but as the industry began to take off, it needed something bigger to store, sell and cart the oil around in. They settled on the 42 gallon barrel merely because, at the time, whisky was stored in barrels and the barrel seemed like a perfect fit for the valuable liquid the oil industry produced too. And the seemingly random 42-gallon volume was picked because sellers would base the sale on 40 gallons and add an extra two gallons in for good measure to compensate for what would spill during transit.  

Oil Market, Exchange Rate and Heating Oil Price Information August 2021.

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $73.90              Price at End of Month: $72.45

Highest Price in Month: $73.90                Lowest Price in Month: $66.52

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.3898                              End of Month: 1.3763

Kerosene (Heating Oil) Cargo (CIF) Price $ per tonne       

Start of Month: $624.50                                           End of Month: $624.00

Highest Price in Month: $625.50                            Lowest Price in Month: $588.00

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 2.96 ppl

Market Commentary on the Newsfeeds:

From Bloomberg

Oil buckles to lowest since May as Fed signals intent to taper

Oil tumbled again, dropping to the lowest level since May as the U.S. Federal Reserve signaled it was set to start tapering asset purchases within months, hurting commodities and lifting the dollar.

West Texas Intermediate futures fell 3.7%, declining for a sixth straight day and sinking in tandem with equities and other commodities like copper and iron ore. The Fed delivered a fresh blow to crude, which had already been weakening as the delta virus variant hits demand in Asia. A surprise jump in U.S. gasoline stockpiles underscored the risks.

Oil’s impressive rally in the first half of the year has lost momentum in July and August amid the threat to demand posed by spread of delta, including in key importer China. Gains in the dollar in recent weeks have also acted as a brake on prices, making commodities priced in the U.S. currency more expensive. At the same time, OPEC+ has pushed ahead with gradually restoring supplies.

“Economic growth concerns, stronger dollar and a risk-off environment are not helping oil,” said Giovanni Staunovo, an analyst at UBS Group AG. “Demand will continue to recover in an uneven way over the coming weeks and the oil market remains undersupplied. So that should still support prices down the road.”

To cushion the U.S. economy from the blow inflicted by the pandemic, the Fed has been buying $120 billion of assets every month, buoying commodities and stocks. The minutes of the meeting showed that most participants now judged it could be appropriate to start reducing them.

“The overall environment was fragile to begin with, so I think the Fed minutes yesterday just added another layer of fragility to that,” said Howie Lee, an economist at Oversea-Chinese Banking Corp. “It’s just broad risk aversion across markets.” 

Source Bloomberg 19 Aug 21

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

Last month’s oil market report can be found here:

Goff Heating Oil Market Price Information for July 2021 - Goff Petroleum

Oil Market, Exchange Rate and Heating Oil Price Information July 2021.

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $77.32              Price at End of Month: $76.38

Highest Price in Month: $78.42                Lowest Price in Month: $69.24

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.378                                 End of Month: 1.390

Kerosene (Heating Oil) Cargo Price $ per tonne       

Start of Month: $626.25                                           End of Month: $642.25

Highest Price in Month: $642.25                            Lowest Price in Month: $587.00

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 2.42 ppl

Market Commentary on the Newsfeeds:

Oil Has Become The Hottest Commodity On Wall Street

Crude oil has been having a great 2021 so far—a very different situation to last year’s when the pandemic devastated demand for all commodities fuelling a price rout that lasted well into 2020. Now, commodities are back with a vengeance, and nowhere is this vengeance clearer than in oil. Crude has become the hottest commodity for traders in the past few weeks as surging demand has topped all expectations, sparking a run on oil futures. According to a recent Wall Street Journal report, in mid-June, the ratio of bullish to bearish bets on oil in New York stood at a staggering 23 to 1. This compares with a ratio of 6 to 1 at the beginning of the year.

This is the speculative component of the price rally, and it is certainly a big component. But the fundamental component is a big one, too. OPEC+ stunned everyone earlier this month when it failed to reach an agreement on how to proceed with its production control beyond the current month. The UAE, a dissenter who had already criticized some aspects of the production cut deal, this time really dug its heels in and refused to make any concessions until concessions were made to it.

The latest update from this front is that the members of the oil-producing cartel have yet to make progress on the deal, according to unnamed sources familiar with the situation, who spoke to Reuters this week. The sources said Russia had been trying to bring the UAE and Saudi Arabia together to the negotiations table but was apparently having trouble succeeding, so a new meeting of OPEC+ was unlikely this week.

Meanwhile, however, there have been headwinds at play, too, namely fresh worry that the delta variant of the coronavirus could reverse the global economic recovery that has driven the surge in oil demand that few expected. Because of this worry, Reuters reported Monday, oil started the week with a loss, although a minor one, at less than a percentage point for both Brent crude and West Texas Intermediate.

On the stock market, oil traders have been taking profits. This has weighed on oil prices as well. Per Reuters’ John Kemp, last week hedge funds sold a total 34 million barrels of WTI and 5 million barrels of Brent as well as 14 million barrels of U.S. gasoline. The selloff, Kemp noted, came from the closing of bulling positions to the tune of 55 million barrels—and not the opening of bearish ones, suggesting sentiment remained upbeat on the whole.

According to the Wall Street Journal, however, there may be a ticking bomb hiding among all these oil bets. That ticking bomb would be the option that many traders have been using to bet on oil reaching $100 by the end of 2022. Analysts are concerned that a reversal of oil’s fortunes would lead to an options selloff, which, due to the size of the options market in oil right now, would send ripples across financial markets.

In all fairness, the chances of a sudden drop in oil prices are slimmer than they would normally be during a rally caused mostly by tightening supply. Normally, higher prices lead to greater production. This time, however, higher production is not coming. U.S. shale producers are being extra-careful and are not in a hurry to bring back too many barrels. Supermajors are being targeted by activist shareholders to reduce their output rather than boost it. There’s Iranian oil that a couple of months ago many expected to quickly return to legal global markets, but it appears that it will take a while yet for Iran and the United States to seal a deal that would make this possible. Wild price swings are likely to continue as speculators try to make the best of the oil rally.

By Irina Slav 13th July 21 Oilprice.com

The Refining Industry Is Struggling To Adapt To The Future

The upstream oil and gas business is recovering from one of the worst slumps in recent memory as oil prices sit at around $75 per barrel and global demand rises. The expectation now is that prices will reach pre-crisis levels in just a few quarters.

However, the downstream segment's suffering is set to linger—and not only in the short term. Lower refining margins and structural overcapacity are the near-term challenges ahead for the oil refining industry. But there are two other challenges that refiners need to overcome if they want to remain relevant despite the energy transition and pledges for net-zero emissions, energy consultancy Wood Mackenzie says.

Persistently Low Refining Margins

Global refining margins are now higher than at this time last year, but they are still well below five-year averages and below the margins of the last 'normal' year for demand, 2019.

"[T]he refining margin is higher than the fourth quarter but still quite low. And then the marketing business from a volume perspective also not as strong as we've had certainly on a steady-state basis," Royal Dutch Shell's chief financial officer Jessica Uhl said on the supermajor's Q1 earnings call at the end of April.

So far this year, margins have somewhat improved with recovering gasoline demand in China and the United States. But recovery has been uneven across various refined products. Global jet fuel demand is still trailing the demand recovery in gasoline, forcing refiners to blend jet fuel with diesel, thus increasing diesel supply and depressing the margin, according to Wood Mackenzie.

Refinery Overcapacity

Refining margins also come under pressure from more facilities stating up, especially in the Middle East and Asia. This exacerbates the overcapacity in the industry, which had started to become evident even before the pandemic-inflicted crash in fuel demand.

"Wood Mackenzie's global composite margin averages US$1.8/bbl this year so far, less than half the US$4.25/bbl five-year average. With new refineries in the Middle East and Asia coming online, we don't expect refining margins to recover further next year," says Alan Gelder, Vice President Refining Analysis at WoodMac.

The overcapacity in the industry is driving down global utilization rates. Wood Mackenzie expects this key metric of profitability in the industry to average slightly over 75 percent in 2021. While this would be up from the 68 percent from the second quarter of 2020, it is still below the some 80 percent average in the five years prior to the 2020 downturn.

If the global refinery industry doesn't see extensive further rationalization, the sector may never return to 80 percent capacity utilization, WoodMac noted.

The current crisis is an existential threat to smaller and less efficient refineries in Europe and Asia that were struggling to turn profits even before the pandemic. Even oil majors acknowledge that some sites have become permanently uneconomical amid depressed refining margins, fierce regional competition, and expectations of declining road fuel demand in the long term. For example, ExxonMobil and BP announced in the span of just a few months closures of their respective refineries in Australia. They now plan to convert them into fuel import terminals. 

In Europe, 1.4 million bpd of refining capacity is under serious threat of closure by 2023 at the latest, according to a Wood Mackenzie analysis from the middle of last year.

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Refiners around the world announced permanent closures of refinery capacity last year after the pandemic crushed fuel demand worldwide, the International Energy Agency (IEA) said in November 2020. Yet, even after the announced closures, "there remains significant structural overcapacity," the Paris-based agency added.

How to turn in consistent profits amid industry overcapacity is the key short-term challenge to the sector. How to decarbonize operations and how much oil demand electric vehicles (EVs) would eliminate are the major longer-term challenges for refiners.

In a world where pledges for net-zero emissions are now the norm, the refining industry needs to show it is trying to clean up its act and reduce emissions from operations. This can be done through electrification of processes, low-carbon hydrogen, and carbon capture and storage (CCS), Wood Mackenzie says. 

Some integrated majors have already started to think along this line of business. For example, TotalEnergies, in cooperation with a unit of ExxonMobil and chemicals companies, has just announced it would explore the development of a CO2 infrastructure, including capture and storage, to help decarbonize the industrial basin located in the Normandy region in France.

Emissions from operations would be easier to tackle despite the potentially high costs and years of development and implementation of projects. The issue with emissions generated from the use of refined oil products, Scope 3 emissions, is still a major issue.

"[T]he industry's restrained commitments beyond a handful of companies to reduce Scope 3 emissions reflect differences of opinion as to whether the responsibility lies with producers or consumers," WoodMac said.

EV Threat To Oil Demand

Finally, there is the big question that will differentiate winners and losers in the refining sector in the energy transition: how much fuel demand will EVs erase?

If the world were to get on the 2-degree pathway in an accelerated energy transition scenario, an aggressive EV market penetration would result in global oil demand falling to just 35 million barrels per day (bpd) in 2050, according to Wood Mackenzie.

This scenario may be overly optimistic about electrification in transport, but there will surely be some oil demand that would come off the market in the next decades.

To survive in a world where oil demand is not growing every year, the refining industry would need further rationalization. The winners will be the most competitive assets, such as coastal integrated petrochemical facilities processing not only crude but also waste and biomass, WoodMac notes.

By Tsvetana Paraskova for Oilprice.com July 21

Oil steady near 2018 high as report points to falling stockpiles – Bloomberg

Oil was steady near the highest close since October 2018 after an industry report pointed to a further decline in US crude stockpiles, adding to signs of a rapidly tightening global market. Futures in New York traded near $75 a barrel after rising 1.6 percent on Tuesday. The American Petroleum Institute said crude inventories slid by more than 4 million barrels last week. That would be an eighth straight weekly draw.

Some uncertainty looms over the market, however. Indonesia posted a record number of new virus cases, while Sydney extended a lockdown as the delta variant continues to sweep the globe. Still, oil has rallied more than 50 percent this year as the vaccine rollout lifts demand in major economies such as the US, and the IEA is warning that the market will tighten significantly if OPEC+ doesn't resolve its standoff and boost production.

Prices:

West Texas Intermediate for August dipped 0.2 percent to $75.09 a barrel on the New York Mercantile Exchange at 7:50am in London.

Brent for September settlement slipped 0.1 percent to $76.42 on the ICE Futures Europe exchange after climbing 1.8 percent on Tuesday.

The market remains in a bullish structure, however, although it's eased somewhat. The prompt timespread for Brent was 79 cents a barrel in backwardation. That compares with 88 cents a week earlier.

Oil Eases From 2 1/2-Year High as Virus Clouds Tightening Market - 19th July 21 Bloomberg

Oil eased from its highest closing level since October 2018 as signs of a strong U.S. crude market were offset by fears over the delta variant’s threat to demand.

Futures in New York traded near $75 a barrel, after climbing 1.6% on Tuesday. American crude inventories declined substantially again last week, according to an industry report published ahead of government data due later on Wednesday. The nation’s oil demand has soared to new heights, with gasoline and diesel returning to pre-pandemic levels.

Yet the global outlook faces a growing threat from the spread of the coronavirus variant. Indonesia posted a record number of positive cases, while Sydney extended a lockdown.

“Trouble is brewing for the oil market,” said Stephen Brennock, an analyst at PVM Oil Associates Ltd. “Fears are mounting that rising Covid-19 Delta cases could delay a full economic recovery. This, in turn, poses a significant threat to oil demand growth in the near-to-medium-term.”

Oil caught between tightening supply and virus fears

Oil has rallied more than 50% this year as the vaccine rollout lifts demand in major economies such as the U.S. and China, and fosters a recovery in Europe. Futures prices are showing a premium on nearer-term contracts, known as backwardation, which usually indicates tightness.

The International Energy Agency is warning that the market will tighten significantly if the OPEC+ alliance doesn’t resolve a standoff that’s preventing the group from reviving production.

PRICES:

• West Texas Intermediate for August dipped 0.6% to $74.77 a barrel on the New York Mercantile Exchange at 10:34 a.m. in London.

• It settled on Tuesday at $75.25, the highest since Oct. 3, 2018

• Brent for September settlement slipped 0.7% to $75.99 on the ICE Futures Europe exchange after climbing 1.8% on Tuesday.

• The prompt timespread for Brent was 78 cents a barrel in backwardation, compared with 88 cents a week earlier.

The American Petroleum Institute said crude inventories slid by more than 4 million barrels last week, according to people familiar with the data. The Energy Information Administration is expected to report a similar reduction later on Wednesday, according to a Bloomberg survey.

That would be an eighth straight weekly draw, the longest run of declines since January 2018. A surge in petroleum use for products such as plastic, asphalt, lubricants and other industrial needs is helping to propel the recovery.

Oil retreats on OPEC+ deal to ramp up output, threat from delta – Bloomberg

Oil declined after OPEC+ agreed to boost production into 2022, resolving a bitter internal dispute that had shaken the alliance with a pledge to restore millions of barrels of crude output to the energy market. Global benchmark Brent and West Texas Intermediate each shed 1 percent. The deal gives Saudi Arabia, the UAE, Iraq, Kuwait and Russia higher baselines against which cuts are measured from May 2022. At the same time, a surge in virus cases from the US to Asia threatens to set back the demand recovery. After soaring 45 percent in the first half, Brent hit a turbulent patch this month. Brent for September settlement was 1 percent lower at $72.87 a barrel on the ICE Futures Europe exchange at 7:33am in London. WTI for August delivery fell 1 percent to $71.06 a barrel on the New York Mercantile Exchange. Brent's prompt time spread eased to 62 cents a barrel in backwardation. While that's a bullish pattern, with near-dated prices trading above those further out, it's down from 74 cents a week ago. The delta variant is still on the ascendant, especially among the unvaccinated, with some countries re-imposing curbs. US infections are set to surge 65 percent in the week to Sunday, outpacing a 19 percent global rise in cases, while on Saturday the UK reported the most cases since January.

Oil prices won't fall below $60

The price of a barrel of Brent crude oil won't fall below $60, according to analysts. They pin the recent price drop not on the OPEC+ decision to ramp up production quotas, but rather on the mounting fears that a rise in Covid-19 cases—particularly the Delta variant—will stall an economic recovery and hence oil demand. Brent slid more than 7 percent on Monday, but has since rebounded. According to the analysts, Brent will hover in the $60-$70 range and will likely not fall below that threshold because additional lockdowns are unlikely despite the Delta variant. Vasily Tanurkov, director of corporate ratings group at Arca, said that the price drop-off was due to a variety of events that came to a head on Monday.  "If you look at what basically happened on Monday in the financial markets, then almost everything collapsed: Stock markets, Asian, European, almost all raw materials fell. This was more due to fears about a new wave of coronavirus. Accordingly, this could lead to stagnation in global demand, including for oil," Tanurkov said.

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

Last month’s oil market report can be found here:

Goff Heating Oil Market Price Information for June 2021 - Goff Petroleum

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Oil Market, Exchange Rate and Heating Oil Price Information June 2021.

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $69.37                Price at End of Month: $76.12

Highest Price in Month: $76.12                Lowest Price in Month: $69.37

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.4172                              End of Month: 1.3814

Kerosene (Heating Oil) Cargo Price $ per tonne       

Start of Month: $590.75                                           End of Month: $616.25

Highest Price in Month: $627.75                            Lowest Price in Month: $590.75

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 3.23 ppl

Market Commentary on the Newsfeeds:

EIA: Brent Oil To Average $68 In Q3 2021

Brent Crude prices are expected to average $68 a barrel in the third quarter this year, the U.S. Energy Information Administration (EIA) said in its latest monthly outlook, raising the forecast by as much as $5 per barrel from the previous projection.

In the June Short-Term Energy Outlook (STEO), the EIA also raised its Brent Crude forecast for June by $4 a barrel from the May STEO and now sees the international benchmark averaging $69 per barrel this month.

Despite the COVID crisis in India, global oil demand remained higher than supply in May, which extended the global inventory drawdown of crude and fuels, although the withdrawal is estimated by the EIA at 1.2 million barrels per day (bpd) last month, compared with average monthly withdrawals of 2.1 million bpd since June 2020.

EIA’s latest price outlook is close or slightly below current levels and “incorporates the recent price increases and our forecast of mostly balanced oil markets in the coming months,” the administration said.

Global production is set to increase more rapidly in the second half of this year to catch up with rising demand, according to the EIA.

Rising production from OPEC+, as well as growth in non-OPEC supply, including from the United States, is set to exert downward pressure on oil prices next year when Brent Crude is expected to average $60 per barrel.

Referring to the U.S. oil price and rig counts, the EIA believes the rig count is likely to continue to increase in response to WTI Crude prices rising from less than $50 a barrel in late 2020 to a monthly average of $65 a barrel in May.

“Although U.S. crude oil producers have some incentive to remain cautious about deploying rigs and increasing production because of overall market uncertainty, if WTI crude oil prices remain near $65/b in the coming months, as we forecast, prices will continue to provide an incentive for producers to deploy additional rigs and resume production,”

the EIA noted.

Onshore U.S. crude oil production in the Lower 48 is set to reach almost 9.3 million bpd by December 2021 – from an estimated 8.9 million bpd in May – with further increases into 2022. Yet, those forecasts are lower than in recent STEOs because of relatively fewer rig deployments at existing price levels, particularly in the Permian, the EIA said.  

By Tsvetana Paraskova for Oilprice.com 9^th June 2021

OPEC Sees Strong Oil Demand Recovery This Autumn

Global oil demand will rise by 6 million barrels per day (bpd) this year from the lows of 2020, led by strong consumption in China and the United States, especially in the second half of 2021 with growing economies and border reopenings, OPEC said on Thursday.

In its Monthly Oil Market Report (MOMR), the organization continues to expect total global oil demand to average 96.58 million bpd this year, up from 90.63 million bpd in 2020, despite the COVID resurgence and renewed lockdowns in key economies, including the Eurozone, Japan, and India.

“However, the ongoing vaccination efforts, growing share of recovered cases leading to increasing herd immunity, and the easing of lockdown restrictions lend optimism that the pandemic could be contained in the few months to come,”

OPEC said in its report.

The global economic rebound will benefit from stimulus measures, high savings rates in advanced economies, and pent-up demand following the lockdowns, the cartel noted.

The economic momentum and reopenings are set to accelerate the oil demand rebound in the second half of the year, when total demand worldwide is expected to reach 99.0 million bpd, up from an estimated 94.1 million bpd for the first half of 2021. Improving mobility in major economies support gasoline and diesel demand, while seasonal summer demand will also add to higher consumption. The ongoing vaccination is also a bullish factor in OPEC’s outlook for the second half of the year.

“OECD Americas, led by the US, is projected to be the largest contributor to oil demand growth in 2021, supported by rebounding transportation fuels, mainly gasoline, and healthy light- and middle-distillate requirements,”

OPEC said.

Despite this, oil demand in North America is not expected to return to pre-pandemic levels this year, the cartel noted. 

In developing economies, China will lead the demand growth, followed by India and other markets in Asia, according to OPEC.

By Tsvetana Paraskova for Oilprice.com 10^th June 2021

$100 Oil Is Now A Distinct Possibility

$100 Oil Is Now A Distinct Possibility | OilPrice.com

Although oil may not be headed to a new supercycle, prices still have room to rise from current levels because of a strong demand rebound and expected tightness in supply, some of the world's largest commodity trading groups say.

There is a chance for $100 oil, Jeremy Weir, chief executive officer at commodity trader Trafigura, told the FT Commodities Global Summit on Tuesday.

"You need higher prices to incentivize… and also maybe to build on the cost of carbon in the future as well. You also need to attract capital in the business," Weir told the online debate.

The largest commodity traders are bullish on oil in the near term, too.

Brent Crude traded at over $73.50 a barrel early on Tuesday, but the top executives of the trading houses see further upsides.

"Higher from here" for the next six months, Glencore's Head of Oil Marketing, Alex Sanna, told the same event today. According to Sanna, better news about vaccination programs, inflation bringing in investor cash, and the demand recovery will all contribute to rising oil prices.

Russell Hardy, the chief executive officer of the world's biggest independent oil trader Vitol, also said that $100 per barrel oil is "of course a possibility," but warned the overenthusiastic bulls that "we're in a slightly artificial market at the moment," as the OPEC+ group still has around 5.5 million barrels per day (bpd) to bring back to the market, by April 2022 per current plans.

According to Hardy, diesel demand globally is now back to pre-pandemic levels, gasoline demand will return to pre-crisis levels in the fourth quarter, petrochemical demand is already ahead of 2019 levels, while jet fuel consumption is still a long way behind, as summed up by Financial Times Energy Editor David Sheppard.

Global oil demand will not peak until "around 2030," while a faster decline is to be expected only after 2040, Hardy told the FT summit.

Despite the decisively bullish oil price forecasts, Vitol's CEO doesn't see a new supercycle in oil. "It's a more contained situation than 2008," he said.

By Tsvetana Paraskova 16^th June 2021 Oilprice.com

Emerging Economies Face An Impossible Challenge In The Energy Transition

Climate concerns are driving an acceleration in the global transition towards environmentally sustainable energy sources, with significant implications for emerging markets as they seek to keep pace with high demand growth over the long term.  In a sign of the growing influence of environmental, social, and governance (ESG) standards on the energy industry, three of the world’s energy majors recently experienced significant developments that could dramatically change the way they do business.

In a landmark ruling, on May 26 a Dutch court ordered Royal Dutch Shell (-5.26%) to reduce its carbon emissions by 45% – as measured against 2019 levels – by 2030.

The lawsuit was filed by seven groups, including environmental organizations Greenpeace and Friends of the Earth Netherlands, on behalf of 17,000 Dutch citizens, and claimed that the company was threatening their human rights by continuing to invest in fossil fuels.

Although Shell, which had previously unveiled a carbon reduction plan, has pledged to appeal the ruling, the decision is nevertheless indicative of the growing pressure on energy majors to improve their climate credentials.

On the same day as the court ruling, shareholders of US energy giant Chevron (-3.77%) voted in favor of a proposal to cut emissions generated by the use of the company’s products, while one day later, on May 27, the hedge fund Engine No.1 was successful in unseating two of Exxon Mobil’s board members as part of a bid to change the company’s efforts towards climate change.

While these latter two developments do not contain concrete steps towards decarbonization, they do highlight investor appetite for more stringent ESG standards and a faster transition to renewable sources.

Indeed, many financial analysts believe that banks will face new capital requirements in the future based on how exposed their loans are to climate change. While regulators have not yet released binding rules, European Central Bank guidelines released in November last year instructed banks to factor in climate risks when assessing capital requirements.

Furthermore, in an example of governmental developments, on May 25 G7 climate and environment ministers agreed to end direct government support for coal power generation by the end of this year and pledged to ban fossil fuel subsidies by 2025.

The path to net-zero:

These efforts to improve sustainability come amid the release of detailed carbon-neutral climate plans for the energy industry, which accounts for around three quarters of global greenhouse gas emissions.

In mid-May, the International Energy Agency (IEA), a Paris-based intergovernmental organization, released the “Net Zero by 2050” report, the first comprehensive energy roadmap detailing how the energy sector can achieve net-zero carbon emissions by 2050.

Featuring 400 milestones to achieve the target, the report calls for an immediate ban on investment in new fossil fuel projects globally, along with the prevention of sales of new internal combustion engine passenger cars from 2035.

To meet demand, it foresees a massive rollout of renewable energy, which, according to the roadmap, would account for almost 90% of electricity generation by 2050. For example, it outlines a 20 fold increase in solar capacity between now and 2050 and an 11 fold expansion for wind power.

While solar would become the single largest source of energy under the plan, fossil fuels would fall from current levels of almost four-fifths of global energy supply to slightly more than one-fifth.

Acknowledging that the roadmap is ambitious, the IEA places a huge responsibility on governments to promote environmentally sustainable technologies and forms of energy to meet the net-zero goal.

“Making net zero emissions a reality hinges on a singular, unwavering focus from all governments – working together with one another, and with businesses, investors and citizens,” the report states. “All stakeholders need to play their part. The wide-ranging measures adopted by governments at all levels in the net-zero pathway help to frame, influence and incentivise the purchase by consumers and investment by businesses.”

Emerging markets’ challenges and opportunities

This push for carbon neutrality and improved environmental sustainability places a unique set of pressures on emerging markets.

For example, the IEA report states that emerging markets will account for the majority of electricity demand over the coming decades as economies industrialize and grow. Perhaps equally as challenging is the fact that many of the world’s large oil and gas producers are emerging markets in the Middle East and Africa.

In an indication that oil producers are adapting to the new demands, in early May Qatar and Saudi Arabia joined Canada, Norway, and the US in establishing the Net-Zero Producers Forum, a body designed to come up with long-term strategies to reach global net-zero emissions.

Saudi Arabia, the world’s largest oil producer, has particularly ambitious plans to become a leader in the energy transition. The country aims to derive 50% of its electricity from renewable sources by 2030, a dramatic increase from 0.05% in 2018.

Towards this end, in April it unveiled the 300-MW Sakaka solar plant, the country’s first utility-scale renewables project, which was followed by the announcement that deals for seven new solar projects – with a combined capacity of 3.7 GW – had been signed.

While the energy transition will undoubtedly require significant economic restructuring from countries that derive large portions of GDP from oil and gas, there are also considerable economic benefits to be gained.

The IEA estimates that while some 5m jobs will be lost globally in the shift away from fossil fuels, some 14m are set to be created as a result of the development of and investment in renewables.

By Oxford Business Group 20th June 2021

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

Last month’s oil market report can be found here:

Goff Heating Oil Market Price Information for May 2021 - Goff Petroleum

Ordering a fill over the summer months, to take advantage of summer prices, without checking the condition of your tank  first, could substantially increase the risk of, and damage from, leaks. The danger this poses to the environment and wildlife must not be underestimated.

The Environment Agency is urging anyone with a domestic heating oil tank to check their tank is in a good state of repair before getting heating oil delivered and this is especially important as many tanks will be full for most of the summer months.

Leaks and spills from a domestic heating tank can be difficult and expensive to clean up; leaked oil can end up in groundwater supplies and drains, many of which lead directly into rivers, streams, lakes and even garden ponds.

If oil does get into drains it could pollute watercourses; harming livestock, wildlife and plants.

Our vital drinking water can also come from the same surface and groundwater supplies so protection is important.

Oil is poisonous to fish, other wildlife and smothers plants - just two litres of oil could seriously pollute the volume of fresh water needed to fill an Olympic-size swimming pool.

Helen Wakeham, Deputy Director of Water Quality for the Environment Agency said:

“With people storing more oil than normal over the summer months, the risk of leaks is ever greater, and the danger these pose to the environment and wildlife must not be underestimated.

“The clean-up costs of a leaking tank can also cost tens of thousands of pounds, and land contamination caused by a leak can severely affect the value of your property.

“It is vital both the tank and pipes are regularly inspected and for people to never buy more oil than they can safely store.

“If anyone does find a spill, please contact us straight away so we can reduce the impact on the environment.”

To report an oil spill people should contact the Environment Agency’s 24-hour incident hotline on 0800 80 70 60.

Visit Gov.uk for guidance on the regulations that apply to storing oil: https://www.gov.uk/oil-storage-regulations-and-safety and visit the Oil Care Campaign for website for further guidance: http://oilcare.org.uk/

According to their tweet

"If you use #oil in a condensing #boiler to #heat your #home ~ your #heating costs are down by between 28% & 39% when compared to last January"

Oil heating for the average three bedroom house in the UK now costs just £747 according to Sutherland Tables, the recognised independent source of data on comparative domestic heating prices in the UK. This makes oil £54 cheaper than mains gas, the second cheapest option with an annual average heating bill of £801.

When oil is compared with the other main heating methods used by rural homes, called off grid because they are not connected to the gas pipeline network, the savings are even greater. Oil is more than 1/2 the price LPG (Liquid Petroleum Gas) and 1/3 of the cost of night storage heaters.

With the cost of heating an average three bedroom home in Great Britain with an oil condensing boiler being only £747 it now means oil fired central heating systems are:

• 7% cheaper than mains gas.
• 1/3 cost of electric night storage heaters. 
• Half the price of wood pellet systems.
• Over £1000 cheaper than Air Source Heat Pumps.
• Making oil substantially cheaper to run than any traditional or renewable heating option.

The fact that Heating Oil still offers reliable, efficient and most importantly cost effective domestic heating is great news for the UK’s 1.5 million oil using households.

With prices forecast to remain low for the foreseeable future, we suggest that households currently using LPG or electricity should consider a switch to oil as, even allowing for the cost of a new oil boiler and tank, the move would provide considerable savings over the lifespan of the installation.

Whilst renewables and alternative fuels are often promoted as "cost effective solutions for a clean green future", the true costs of green fuels for the domestic user are substantially higher than suggested by these renewable heating solution providers.

Goff Petroleum continues to ensure its customers get the best possible heating oil price and delivery service, from an experienced team with a wealth of product and technical knowledge. 

We want to support this goal and we are one of 45 key players in the liquid fuel heating industry, who have signed up to support the Future Ready Fuels campaign.

Below we expand on why distributors, suppliers, refiners and equipment manufacturers have combined to demonstrate to Government that we can all work together to provide a solution to achieve net zero, but we need you, our customers, to understand that we need you to partner with us so we can all do so cost effectively.

What options are UK Govt currently exploring?

Decarbonising heat from off-the-grid homes and commercial buildings has been highlighted by the government as a priority towards achieving net zero due to its considerably high level of emissions.

In 2017 the government’s “Clean Growth Strategy” set out plans to eradicate the installation of high carbon fossil fuel heating in new and existing off-the-grid homes. Likewise, in 2019 the “Future Homes Standard” proposed that all new buildings from 2025 must be fitted with low carbon heating to produce 75-80% lower carbon emissions.

Currently, heat pumps (and biomass where heat pumps are not practical) are the routes being explored by the government’s Climate Change Committee. But despite them incentivising these low carbon technologies, there has been little uptake over the last year.

The 2020 roadmap to net zero carbon emissions set out in the “Ten Point Plan” recognises the requirement to “avoid the need for costly retrofit” in new homes but doesn’t consider the high costs needed to modify existing homes. 

These modern solutions currently supported by the government aren’t suitable for the average off-the-grid homeowner. When compared to properties on the gas grid, oil heated homes are much more diverse in character, age, design, and construction and collectively pose a unique and difficult decarbonisation challenge.

The cost of replacing oil burning boilers with the cheapest of the heat pump or biomass technologies is over £10,000 per home but these low-temperature technologies will also require a home to meet or exceed an EPC C standard rating before they can provide a viable heat source. The diverse nature of rural housing means that more than half of oil heated homes in the UK would require an additional £15,000 to be spent on upgrading the fabric of buildings including insulation etc to reach the minimum C standard.

So the upgrades required to the home, along with the cost of a new “decarbonised” heating system to replace an oil boiler will mean that the bill for the homeowner will be a minimum of at least £10,000, and could for many be more than £25,000, just to achieve a similar standard of space and water heating.

So, what solution is the “heating oil” sector suggesting to reduce emissions?

Increasing evidence suggests there is a more cost-effective, practical option that has so far been overlooked in the government’s roadmap to net zero.

Renewable liquid fuels, such as a bio fuel that performs like traditional heating oil in current boilers and can be stored in existing domestic tanks, could provide a quick and easy solution to overcome many of the current barriers to decarbonisation.

Currently UKIFDA and Oftec have been trialling a clean green fuel called HVO, to prove to Government that we can provide a cost-effective, more pragmatic solution to decarbonising oil heated homes.

Why a Green Heating Oil alternative?

For the purposes of the trial HVO had already been officially certified as a sustainable fuel by the ISCC (International Sustainability & Carbon Certification) and is already in widespread use in diesel engines and machinery. By using this certified green fuel the results of the trial were able to prove that:

HVO in boilers results in significantly reduced CO2 emissions.

The green alternative produced a cleaner burn compared to kerosene.

It had zero aromatics making it less harmful to health and the environment when stored and handled.

HVO was sustainable & renewable as it was made from certified sustainable waste materials.

It is a drop-in alternative which required only a minor modification to an existing boiler – simple, low cost (£100) changes that could be undertaken by existing OFTEC service engineers.

Overall HVO in test was found to achieve up to a 90% reduction in net CO2 emissions and the trial proved that a green fuel could be a key contender against the emissions of modern renewable heating technologies and works well in all existing oil heating systems once burners and tanks have been inspected.

In simple terms this meant that huge reductions in emissions could be achieved by simply switching from fossil to green fuel, and such a switch would avoid the considerable costs (up to £25k per home) of a new heating system and the support energy efficiency upgrades.

So what now?

UKIFDA and OFTEC have launched a ‘Future Ready Fuels’ campaign to “fight” the shift to heat pumps. They have called out to us as one of the 45 key players in the liquid fuel heating industry to share the message that we all believe liquid fuel has a future and asked us to call on you, our customers to get involved by registering your interest on their website.

The Future Ready Fuels campaign team will then take these figures to the government and call on them to consider that a green heating oil alternative is both a more cost-effective and pragmatic solution to decarbonising oil heated homes over the current options being backed.

This is only part of the journey for us at Goff. Here you can find out more about the steps to sustainability that Goff Petroleum are making.

Oil Market, Exchange Rate and Heating Oil Price Information May 2021.

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $66.93                Price at End of Month: $69.58

Highest Price in Month: $69.58                Lowest Price in Month: $66.37

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.3884                              End of Month: 1.4179

Kerosene (Heating Oil) Cargo Price $ per tonne       

Start of Month: $574.50                                           End of Month: $591.00

Highest Price in Month: $587.50                            Lowest Price in Month: $563.00

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 1.50 ppl

Market Commentary on the Newsfeeds:

Hedge Funds Bet On Higher Oil Prices

Money managers intimate a growing confidence that oil prices have room to run higher this year, thanks to expectations of a robust economic rebound and rising global demand for crude.

Last week, hedge funds added the most bullish positions in the oil complex in more than two and a half months, with the net long in crude oil futures jumping to the highest in six weeks.

Rising mobility, the reopening of the economies, and the stimulus packages all point to strong economic growth and consequently, strong oil demand growth. The low-interest rates and the tolerance of the Fed to let inflation run at a moderately above-2-percent level for some time also suggest that investors and speculators will buy more commodities, including oil, as a hedge against inflation.

Hedge funds are looking beyond the immediate COVID crisis in India toward economic recovery in the coming months. This has prompted them to add bullish bets on oil for a third consecutive week in the week to April 27.

During that week, portfolio managers added the equivalent of 30 million barrels in the six most important petroleum futures and options contracts, according to data from exchanges compiled by Reuters columnist John Kemp. This was the biggest weekly bullish wage on oil prices since the start of February.

The combined net long in crude oil reached a six-week high, with WTI Crude leading the increase, while speculators kept an almost unchanged position in Brent Crude, primarily due to an increased amount of naked short selling, Ole Hansen, Head of Commodity Strategy at Saxo Bank, wrote in his commentary on the Commitment of Traders reports for the week to April 27.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Overall, commodities are at their highest in ten years. The Bloomberg Commodity Spot Index tracking prices for 23 different commodities, including oil, hit on Tuesday the highest since 2011. The index has rallied by over 70 percent since it hit a four-year low in March 2020.

Although talk of a supercycle in oil has subsided in recent weeks, major investment banks such as Goldman Sachs continue to be very bullish on oil and commodities as a whole, expecting strong economic growth and easy monetary policy to help oil demand to realize its biggest jump ever over the next six months. Goldman sees oil prices hitting $80 a barrel this summer and expects the entire commodity complex to rally by another 13.5 percent over the next six months.

Economies reopening and increased travel this summer are set to boost demand for all major fuels globally, including gasoline, diesel, and even jet fuel, which has shown the slowest recovery so far.

“For the first time in my life, I think traffic jams are beautiful,” Jim Teague, Director and Co-Chief Executive Officer at Enterprise Products Partners, said on the Q1 earnings call earlier this week.

“While economic recoveries aren’t uniform, when you look at the world’s largest economies, demand has moved up, and all indications are that even Europe isn’t far behind,” he added.

Optimism that demand will rebound strongly seem to be shared by hedge fund managers, who have shown with their bullish bets in recent weeks that oil consumption will rise despite the setbacks in large developing economies such as India and Brazil.

Inflationary expectations are also likely to attract more buyers into oil contracts as investors are set to buy more commodities to hedge against inflation risks in their portfolios.

“With inflation running persistently below this longer-run goal, the Committee will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer?term inflation expectations remain well anchored at 2 percent,” the Fed said in its Federal Open Market Committee (FOMC) statement last week.

Oil demand recovery is uneven across economies, but most of those, including the United States, China, and now Europe, are showing signs that they are on track for a major rebound this year, rekindling confidence among money managers that oil prices still have room to rise beyond $70 a barrel.

By Tsvetana Paraskova for Oilprice.com 5^th May 2021

Leaked EU Report Reveals Ambitious Renewables Agenda

The European Commission intends to ask EU Member States to make an additional effort to increase their share of renewable energy in the power mix, according to a leaked draft of an official document revealed by Euractiv on May 4th. Brussels wants to upgrade its current 32% renewable energy target for 2030 to at least 38%, the document says.  By the same deadline, the Commission aims to have 55% less greenhouse gas emissions compared to 1990 levels, and a 32.5% improvement in energy efficiency. Hence, increasing the renewable energy target is logical as energy is one of the main contributors to GHG emissions on the continent. But Europe is already on the right path, as its energy-related CO2 emissions decreased by 8% during the first quarter of 2020 (compared to 2019 levels).

This revision comes as the European Commission is examining its Sustainable Investment Taxonomy, and is expected to come up with an updated version of the Renewable Energy Directive (RED II) by July 2021.

As renewable sources currently meet 20% of European energy needs, achieving the new target set by the Commission would mean doubling this proportion in only ten years. It currently has an installed solar capacity of 137 GW, of which 19 GW were added in 2020

However, this goal appears ambitious while some countries struggle with their current renewable energy targets. France, for example, has not succeeded in achieving its goal of 23% renewable electricity which it set in 2009. Instead, it displayed a modest 19%, mainly driven by hydroelectricity generation, and failing at making its offshore wind industry take off.

In January 2021, a report by the International Energy Agency and the French utility RTE, titled “Conditions and requirements for the technical feasibility of a power system with a high share of renewables in France towards 2050”, shook the French nuclear industry. It envisioned the possibility of a 100% renewable energy mix by 2050, throwing nuclear out of the game.

Next to this, it is worth noting that EU countries present high discrepancies in terms of renewables potential. Denmark is leading the race with a massive wind industry, providing over 47% of its electricity in 2019. On the other hand, countries like Poland and Hungary are still very reliant on coal, and are rather planning to replace it by switching to natural gas, and nuclear energy. The latter displays higher capacity factors than renewables, and solves their intermittency issue. Following that intent, several Ministers of Eastern European countries wrote a letter in February 2021 calling for the European Commission not to discriminate against nuclear over renewables.

An emphasis on transportation and heating sectors

Among the concrete options brought by the Commission for the achievement of the new target, there is an increase of clean energy use in the heating and cooling sectors: the policy options suggest that the share of renewables in those sectors should increase by 1,1 percentage point every year. An emphasis is also put on decarbonized transportation, based on the forecast of growing EV sales and the proliferation of biofuels. A system of certifications will be implemented to guarantee those fuels’ low carbon intensity, and more stringent rules will be imposed on the aviation sector. This last measure is only a continuation of a trend that has been going on for the past year, with companies such as Total actively investing into bio aviation fuels. 

Another bone of contention is the status of biomass in the Taxonomy, which currently draws a lot of criticism. In fact, wood biomass is a strategic energy resource for Nordic countries such as Sweden and Finland, which have been actively lobbying for looser criteria on its sustainability. Addressing that issue, the leaked document says it will consider implementing national caps on the use of stem wood.

Finally, to facilitate the process of investment into renewables, the European Commission is also reconsidering the rules for corporate renewable PPA’s, according to Montel News reports.

Cost-effectiveness and networks adaptation

This increase in targets was however deemed insufficient by renewable industry players. SolarPower Europe and Wind Europe told Euractiv that more could be done to enhance the European renewable competitiveness.

The cost-effectiveness of this new ambition also remains questionable. In fact, a substantial adaptation of electricity networks will be required to provide an adequate response to the variability of renewable energy sources, and the EU has not yet provided detailed sources of funding. Europe will also have to develop a regional supply chain for battery manufacturing, of which components are mostly imported from carbon-intensive China.

By Tatiana Serova for Oilprice.com 9^th May 2021

Oil Markets Optimistic As Brent Flirts With $70

There was a slight pullback in oil prices following Wednesday’s highs, but the rally is still very much on and bullish sentiment is palpable as summer driving season nears.

Brent tested $70 per barrel on Wednesday 5th May but fell back on Thursday 6th. Oil “had a great run, but it got a little bit ahead of itself,” Phil Streible, chief market strategist at Blue Line Futures LLC in Chicago, told Bloomberg. “We’ve hit resistance and prices pulled back,” but it’s hard to see a summer demand boost “being derailed,” he said. Oil is still set to close out the week with another gain.

Sempra to delay Port Arthur LNG. Sempra Energy (NYSE: SRE) said on Wednesday that it would delay its proposed Port Arthur LNG project until 2022 instead of this year, citing global energy markets and a focus on greenhouse gas reductions. 

Exxon to take $200 million charge related to job cuts. ExxonMobil (NYSE: XOM)expects a $200 million charge related to severance costs for laid-off workers. 

Copper hits record high. Copper price hit a record high on Thursday as Chinese investors unleashed fresh demand following a five-day holiday.

Pioneer says consolidation needed. Pioneer Natural Resources (NYSE: PXD)CEO Scott Sheffield said that the shale industry needs even more consolidation. “I hope other privates are taken out that are growing too much,” Sheffield told investors on an earnings call,” Sheffield said. 

Wind costs rise due to the commodity boom. The rising cost of steel is forcing Vestas (CHP: VWS) to hike its prices for wind turbines.

Exxon and Chevron cautious in Permian. Neither ExxonMobil (NYSE: XOM) nor Chevron (NYSE: CVX) are rushing to boost production in the biggest American shale play, the Permian, despite the oil price rally this year that has sent WTI prices to above $60 per barrel.

Winners of Texas freeze. Among the biggest winners of the Texas crisis in February were commodity trading major Vitol, pipeline operators including Kinder Morgan, Enterprise Products Partners, and Energy transfer, and lenders including Goldman Sachs, Bank of America, and Macquarie Group.

Energy Transfer made $2.4 billion in Texas crisis. Energy Transfer (NYSE: ETP) took in $2.4 billion from the Texas grid crisis, and the stock jumped nearly 5% on Thursday.

India to import more Saudi oil. After Saudi Aramco cut oil prices for June, Indian state refiners added more orders.

Peak LNG? The viability of LNG import terminals in Europe has dimmed and utilities are looking for alternative uses, according to Bloomberg. Last month, for example, Uniper SE said waning demand for new LNG led it to switch a project to a hydrogen hub. In Ireland, another project has been transformed into an offshore wind project.

LNG market to see deficit. Rystad Energy said that the global LNG market could see a supply deficit in the coming years due to inadequate investment, made worse by the delays in Total’s (NYSE: TOT) massive LNG project in Mozambique.

Commodity boom adds inflation risk. Tight inventories for a long list of commodities are pushing up prices, which is increasing the odds of rising inflation. U.S. Treasury Secretary Janet Yellen rattled markets on Tuesday when she said that interest rates might need to rise. 

IEA: metals shortage poses transition risk. The IEA came out with a new report warning that a shortage of critical minerals used in green technologies could slow the pace of energy transition and make it more expensive. The agency urged faster investment in new mining projects. 

U.S. shale pre-hedge revenue hits record high. If WTI futures continue their strong run and average at $60 per barrel this year and natural gas and NGL prices remain steady, producers can expect a record-high hydrocarbon revenue of $195 billion before factoring in hedges, a Rystad Energy analysis shows. The previous record of $191 billion was set in 2019.

UN: World needs to cut 40-45% methane. A new report from the UN finds that the global increase in methane emissions since 2010 is “primarily attributable” to the surge in oil and gas drilling – i.e., the U.S. shale boom. The report said cuts to methane emissions are actually inexpensive and achievable. 

Marathon Oil returns to Oklahoma drilling. Marathon Oil (NYSE: MRO) is returning to limited operations in Oklahoma and the Permian Basin's western Delaware Basin in New Mexico before ramping up next year.

Michigan’s May 12 deadline for Line 5. Michigan has ordered Enbridge’s (NYSE: ENB) Line 5 pipeline shut down by May 12 – next week – but the company said it would defy the order. 

TC Energy takes $1.8 billion impairment on KXL. TC Energy (NYSE: TRP)announced a C$2.2 billion ($1.8 billion) impairment related to the suspension of the Keystone XL project. 

Half of Equinor’s profits came from renewables. Equinor (NYSE: EQNR) reported$2.6 billion in first-quarter earnings, and 49% came from renewables. 

Mining majors earn more than oil majors. The top five iron ore miners are on track to earn $65 billion this year, or about 13% more than the top five oil majors, according to Bloomberg. A big reason for this is the soaring price of iron ore, which has climbed to around $200 per ton, a record set a decade ago.

EQT to buy Alta Resources for $3 billion. EQT (NYSE: EQT) said it would purchase Appalachian rival Alta Resources for $2.93 billion in cash and stock. EQT is already the nation’s largest natural gas producer, and a giant in Appalachia, but the acquisition expands its footprint. 

Germany accelerates climate targets. In the wake of a court decision ordering tougher action, the German government increased its 2030 emissions reduction target from 55% to 65% and moved up its net-zero target by five years to 2045.

Biden admin considers nuclear subsidy. The White House is considering a subsidy to keep existing nuclear power plants online to avoid a setback in its decarbonization goals if nuclear plants were to shut down.

By Tom Kool for Oilprice.com 7^th May 21

Clean Power Push Set To Upend The Geopolitics Of Energy

The global push for clean power generation and increased electrification in transportation is creating a new world order in energy where new winners and losers may emerge.

If the world moves toward predominantly renewable energy sources, the influence of a small number of oil-producing petrostates concentrated in a conflict-prone region is set to wane. At the same time, new power players will emerge, analysts say. These will be the countries holding reserves of the key energy transition minerals or hosting sites for the production of batteries, solar panels, and such with interconnectors for export and import of electricity.

In a world described by the International Energy Agency’s bombshell report from last week—in which it was explained that no new investment in oil and gas is needed, ever, if we are to achieve net-zero emissions in 2050—the energy warfare and the war for resources could shift from large-scale conflicts about oil to potential conflicts about electricity supply, including via cyber warfare.

Cyberattacks On Electricity Grids Could Intensify

America just got a glimpse of what a cyberattack could do to its energy supply. Although no electricity grids were targeted in the ransomware attack on Colonial Pipeline, the cyberattack on computer systems cut off supply of the main fossil-fuel product used in the United States as it stopped gasoline shipments to the Eastern Seaboard.

As the share of electricity in the global energy mix is set to grow exponentially in the coming decades, along with digitalization of operations and asset monitoring, the new threat to energy supply may not be a skirmish or a full-blown conflict near the Strait of Hormuz in the Middle East. It could be state-sponsored cyberattacks on electricity grids, Amy Myers Jaffe, a research professor at Tufts University’s Fletcher School, argues in an article in The Wall Street Journal.

The higher the digitalization and the adoption of the Internet of Things and Industrial Internet of Things in electricity grids and supply, the more chances hackers—including such backed by governments—could get to target parts of the networks, Myers Jaffe says.

To protect themselves against such threats, countries and companies may not only need to boost investment and defenses against cyber threats, but they may also need to show they are ready to retaliate if need be, Myers Jaffe notes.

Will The Energy Transition Lead To A More Peaceful World?

Some analysts argue that increased electrification and the rising share of renewable sources will lead to a more even distribution of energy resources as many countries either have wind or solar resources. This would compare to the current influential energy players—several oil producers in the Middle East, as well as Russia and Venezuela, which even today are managing global oil supply via the OPEC+ alliance to “ensure market stability.”

Researchers at the Norwegian Institute of International Affairs (NUPI) published last year a review of the existing research on the geopolitical consequences of the energy transition. 

“We can distinguish between two camps: the “renewed conflict” camp and the “reduced conflict” camp. The first holds that renewables will not change the extent and frequency of energy conflicts and that they will just come in new forms. By contrast, people in the second camp think that renewable energy will increase energy independence and thereby reduce the level of conflict in the world,” Senior Research Fellow Roman Vakulchuk says.

Increased renewable energy use is likely to lead to increased ‘democratization’ of countries and could make the geopolitics of energy “less conflictual,” Vakulchuk and NUPI Research Professor Indra Øverland argue.

At any rate, the geopolitics of renewable energy will be much different from the geopolitics of oil and gas, where the key weapon is the importing countries’ “fear of resource scarcity”, they say.

Most analyses reviewed by NUPI conclude that big oil exporters will be especially hard hit in a new energy world order, and the oil reserves of Saudi Arabia, Russia, Venezuela, Brazil, and Nigeria could become “stranded geopolitical assets.” 

“Countries that have historically enjoyed geopolitical influence because they supply fossil fuels are likely to see a decline in their global reach and influence unless they can reinvent their economy for a new energy era,” a 2019 report from The Global Commission on the Geopolitics of Energy Transformation, an independent initiative launched by the International Renewable Energy Agency (IRENA), concluded.

The Gulf countries such as Saudi Arabia, Kuwait, the UAE, and Qatar are highly exposed to changes in global energy influence, but they are also highly resilient with financial resources “to reinvent themselves and adapt to the energy transition,” the report said.

The question is, will those Middle Eastern oil and gas producers will move to “reinvent themselves” as fast as to willingly lose the still large geopolitical clout that comes from being the world’s major oil-exporting region.

Renewables Transition To Create New Energy Powerhouses

According to IRENA’s report, “No country has put itself in a better position to become the world’s renewable energy superpower than China.”

China, the world’s single largest oil importer, has made early moves into solar panels production, extraction of the key metals of the energy transition, and battery-grade minerals production, also with a view to reduce its reliance on oil and gas imports.

China, as well as countries like the Democratic Republic of Congo, which holds cobalt and copper resources, are set to increase their relevance in the supply chains. This fact is not sitting well with the United States as both the previous Trump Administration and the Biden Administration were and are working to reduce the risks in the supply chain for critical minerals.

The energy transition would shift the fear of resource scarcity away from the Strait of Hormuz and onto the resource holders of lithium, cobalt, copper, and nickel, as well as the security of electricity grids and interconnectors. 

By Tsvetana Paraskova 25^th May 2021 for Oilprice.com

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

Last month’s oil market report can be found here: Goff Heating Oil Market Price Information April 2021 - Goff Petroleum

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

Oil Market, Exchange Rate and Heating Oil Price Information April 2021.

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $62.11                Price at End of Month: $66.93

Highest Price in Month: $68.22                Lowest Price in Month: $60.95

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.3821                              End of Month: 1.3845

Kerosene (Heating Oil) Cargo Price $ per tonne       

Start of Month: $516.25                                           End of Month: $557.25

Highest Price in Month: $568.00                            Lowest Price in Month: $515.50

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 2.76 ppl

Market Commentary on the Newsfeeds:

Oil prices appear to have found a temporary equilibrium in recent weeks

Oil prices appear to have found a temporary equilibrium in recent weeks, with OPEC+ planning to add just enough extra production to prevent prices rising further and draw in more output from U.S. shale firms.

Brent’s six-month calendar spread remains in a steep backwardation, implying traders expect the market to remain somewhat tight, with continued downward pressure on global inventories, in the second half of the year.

OECD commercial petroleum inventories have fallen back in line with the pre-epidemic five-year average, according to estimates prepared by the U.S. Energy Information Administration.

But front-month Brent prices have been broadly stable since mid-February, implying traders also expect OPEC+ to raise production enough to offset rebounding consumption, ensuring the market does not tighten further.

Brent’s six-month spread is trading in a backwardation of $2.50 per barrel (the 82nd percentile for all trading days since 1990), down from $4.20 (96th percentile) on March 5.

But the front-month futures price has increased just 4% over the last two months (58th percentile), down from a 24% increase (96th percentile) in the two months to March 5.

Prices appear to have reached a temporary peak after rallying strongly for more than three months between the start of November and the middle of February.

The oil market is likely to remain adequately supplied for the remainder of the year if prices stay around $65 per barrel, which would be very close to the long-term average over the last two or three decades in real terms.

Prices at this level would continue to encourage a modest increase in drilling by shale firms and a rise in production through the rest of 2021 and into early 2022.

But U.S. output increases would likely remain gradual and should be absorbed by the return of consumption as the epidemic passes and travel controls are relaxed, posing little threat to the market share of OPEC+.

If prices rise much above this level, the production response from the shale sector is likely to accelerate, posing a threat to OPEC+ share, something the group appears keen to avoid.

Iran, not currently subject to the OPEC+ production limits because it is under U.S. sanctions, has already been adding extra barrels to the market since the start of the year through covert sales to refiners in China.

Rising covert exports helped ensure the market remained well-supplied during the first quarter, off-setting some of the production restraint by the other members of the group.

Provided restrictions on passenger aviation are gradually eased in the second half of the year, there should be enough consumption growth to absorb increases from U.S. shale, Iran and the rest of OPEC+.

However, that delicate equilibrium depends on travel curbs being substantially eased in the next six months, and prices remaining close to current levels so as not to kindle a third shale boom.

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

Last month’s oil market report can be found here: Goff Heating Oil Market Price Information for March 2021 - Goff Petroleum

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

Why deal direct with Goff?

Goff Petroleum is not a virtual distributor or online only business, nor is it a comparison website, oil order aggregator, buying agent, farming group or oil club. We are a real oil business with storage depots throughout East Anglia and South East England and we have been delivering kerosene to domestic oil tanks for over 50 years

We have a well-earned reputation for offering an exceptional, friendly, and efficient fuel delivery service from our local depots, whether you choose to order your heating oil through goffpetroleum.co.uk, or by speaking to your local depot team.

If you’re looking to order heating oil online through a website such as BoilerJuice, Fueltool, HomeFuelsDirect, Value Oils, or Oil Club, it’s worth knowing that these are NOT heating oil distributors. They are companies, or agents, who advertise a service that they then outsource to real oil distributors.

Before you order your heating oil it might be both cheaper and better to order direct with Goff rather than order online via a price comparison website such as BoilerJuice or and order aggregator such as Oil Club:

Brokers & Agents - a few points to consider:

• Commission

You will pay a premium in the cost of the fuel to cover the commission charged by the order taking website platform. The largest brokers, such as Boilerjuice, are also adding platform and service charges of at least £3.99 per order hidden in the order process; all for passing your order to a real distributor. So it is often cheaper to buy directly from your local distributor which you can do either over the phone, or online (when our offices are closed) with Goff. In early 2022 BoilerJuice increased their service charge again to nearly £10 per order.

• Middlemen

You should be aware that price comparison websites are not oil suppliers. They do not actually own any fuel, hold any stock, or have drivers or tankers to make a delivery to your home. If they use cartoon images of tankers and people on their website it's because they do not have any real tankers, delivery drivers, or depot staff to complete your order.

• Confidence

If you have a tricky heating oil delivery, or you are placing your order in times of high demand you may not receive your brokered delivery in good time or on occasions, at all. If you place your order direct; you are a Goff customer not a 3rd party one. At Goff we understand the importance of customer loyalty and making your delivery our priority.

• Relationship

At Goff, we strive to build long lasting relationships with all of our local customers, from all our depots, throughout our delivery areas. All our staff pride themselves on being able to offer consistently competitive prices whilst delivering a premium quality product coupled with a friendly and professional service. This focus has earned us a 5* Trustpilot rating and #1 Heating Oil Supplier ranking.  

By dealing direct you cut out costly middleman and complexity to gain confidence and control. 

For a better price and better service,

you are better to buy direct.

Goff are here to deliver a great heating oil price and professional service direct to you.

Oil Market, Exchange Rate and Heating Oil Price Information March 2021.

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $65.57                Price at End of Month: $63.58

Highest Price in Month: $69.36                Lowest Price in Month: $61.17

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.3938                              End of Month: 1.3797

Kerosene (Heating Oil) Cargo Price $ per tonne       

Start of Month: $539.00                                           End of Month: $521.75

Highest Price in Month: $568.50                            Lowest Price in Month: $513.00

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 3.36 ppl

Market Commentary on the Newsfeeds:

World oil prices rose over 7% in the first few days of the first week of March, as Opec countries agreed to not increase their oil output.

Saudi Surprise Cut May Have Lasting Effect On Oil Prices

The OPEC+ decision to roll over current cuts till the end of March has come as a surprise to the oil markets as it is different from the group's plan announced last December which has sent oil prices above $60.

Crude prices rallied last week to end in the $65-$70 range. Concerns about the speed of recovery of the global economy seemed to be one of the major drivers for OPEC+ to keep production increases to a minimum. The Saudi Energy Minister already voiced his ongoing concerns about the global economy two weeks before the OPEC+ meeting, and he pointed out that producers need not be complacent under current prices.

Another factor to consider is the fact that almost 5 million bpd of OPEC production has been off the markets since May last year. Bringing any of these barrels back could have triggered prices to fall below $60, reducing cash flows for its members, and resulting in losing the opportunity to compensate for losses made during the pandemic.

One of the key pillars of support is the rollover of the Saudi million bpd surprise cut in April, and the exemption of Russia to raise production by 130,000 bpd which may have supported the group to reach a consensus.

Furthermore, OPEC+ is not expecting US shale to boost production as prices continue to rise, giving producers an opportunity to compensate for lost revenues while preserving their market share. For shale oil to come back we need (1) to have oil demand returning to pre-pandemic levels, and (2) a sustained level of current prices over an extended period of time. This will be essential to restoring confidence in investing into the shale industry while minimizing risks. Last week’s EIA report showed the US production at 10 million bpd, 3.1 million bpd below its level a year ago. Under the current production scenarios, prices are expected to trade above $70 in March supported by prospects of market over-tightening, the increasing rate of global vaccination, and the increasing likelihood of certain countries returning to pre-crisis normality. Fuel demand in the US is currently improving, especially gasoline and kerosene whose demand rose by 942,000 bpd and 305,000 bpd w/w, respectively, to stand at 8.15 million bpd and 1.29 million bpd, respectively.

US oil imports are also rising, while exports are almost unchanged, suggesting rising demand amid decreasing national production. The impact of the freeze is still observed on the refining side, as the crude input to refineries was last reported to be 9.9 million bpd, reflecting a drop of 5.7 million bpd below its normal level last year. Most of the rise in gasoline demand was met using gasoline stocks which declined by 13.6 million barrels w/w. These numbers should improve in the weeks ahead as refineries on the Gulf of Mexico restart their operations.

Last weekend, the US senate has approved a $1.9 trillion relief package which is expected to increase speculation-driven price inflation. It seems price levels and even forward curves do not seem sufficient to drive an OPEC decision on easing cuts, and perhaps as we see a greater opening of global economies, an uptick in flight movements, and advancing vaccination campaigns, then OPEC+ will likely be easing cuts to meet demand growth which may happen at some point in Q-2 2021.

Last week, the OPEC+ meeting saw some unexpected results, and it is very hard to predict the next move in April and beyond. Now we have two drivers, the OPEC+ cuts and equally important the Saudi voluntary cuts. Generally, we would expect suppliers to be willing to increase production as prices continue to grow, yet when OPEC suppliers will be convinced to do so remains highly uncertain.

Even if OPEC+ agrees on a production hike in April, Saudi Arabia will likely still not be in a hurry to ease Its voluntary cuts immediately. Statements from the Saudi Energy Minister did confirm that at the last press conference, suggesting that these cuts may continue throughout Q-2 2021, and that these barrels will be brought back in a phased manner. This suggests that prices will be supported by not only the OPEC+ cuts, but also by Saudi voluntary cuts during Q-2 2021. This week, Brent has briefly traded above $70, as a result of rising tensions in the Middle East, caused by Houthi attacks on Saudi Aramco's Ras Tanura facilities over the weekend. It seems then that the geopolitical risk premium in oil is back as oil markets are growing tighter once again.

By Yousef Alshammari for Oilprice.com 8^th March 2021

$70 Oil May Cause Slowdown In Demand Recovery

While the unexpected rollover of the OPEC+ production cuts sent Brent Crude prices up to $70 a barrel, the highest oil prices in more than a year could dampen global oil demand recovery, which the OPEC+ group itself still sees as fragile.

After the surprise OPEC+ move last week, crude oil prices rallied faster and higher than many forecasters had predicted just a week ago as the market expects supply shortages amid recovering demand.     

Oil at $70 a barrel is good for oil bulls, oil companies, and the oil-dependent budgets of most OPEC+ producers, but it is not good news for prices at the pump or oil-importing nations, including the key demand growth drivers China and India.

In addition, higher oil prices will put additional inflationary pressure on economies recovering from the pandemic slump, and raise the prices of many goods and services, including airplane tickets and imported goods in the United States, Dion Rabouin of Axios notes.

The immediate result of OPEC+ keeping production basically unchanged in April—with small exemptions for Russia and Kazakhstan totaling 150,000 bpd—will be higher gasoline prices everywhere, from the United States to India.

The upward pressure on gasoline prices had already begun even before the OPEC+ group surprised the market by rolling over production levels and Saudi Arabia keeping its extra 1-million-bpd cut into April. The alliance's delayed easing of the cuts, however, puts $3 a gallon national U.S. average price within sight.

Recovering fuel demand in the United States on the one hand, and the rallying crude oil prices, on the other hand, could push the national average to above $3 a gallon by Memorial Day, GasBuddy said after the OPEC+ meeting last week

The last time the U.S. national average hit $3 per gallon was in October 2014. Three years ago, in 2018, the national average came close to the $3 threshold, at $2.97 per gallon.

"Extending the production cuts maintains a growing imbalance between demand and supply, and puts more pressure on oil prices to rise, should global demand continue to recover. A continued recovery seems likely, led by American motorists filling their tanks at the fastest pace since the pandemic began. I predict the national average now has 70% odds of reaching $3 per gallon, a level not seen since 2014, primarily due to OPEC's opposition to raising oil production," said Patrick De Haan, head of petroleum analysis at GasBuddy.

According to Pay with GasBuddy data, U.S. gasoline demand increased on Friday by 4.9 percent week over week, to its highest level since the pandemic began. U.S. gasoline demand hasn't seen a daily week-on-week drop since February 20, De Haan tweeted on Saturday.  

Consumers in India are also hit with high prices at the pump as the world's third-largest oil importer directly warned OPEC+ that its unexpected decision last week has the "potential to undermine consumption-led recovery and more so hurt consumers."

India and the world's top oil importer China—key global demand growth drivers—could slow down oil purchases at $70 a barrel in coming weeks and months, potentially underminingthe recovery in demand

"The risk is these higher prices will dampen the tentative global recovery. But the Saudi Energy Minister, Prince Abdulaziz, is adamant OPEC+ must watch for concrete signs of a demand rise before he moves on production," Ann-Louise Hittle, vice president, Macro Oils, at Wood Mackenzie, said, commenting on the OPEC+ rollover.

The high oil prices are also expected to put strong upward pressure on inflation which could accelerate beyond the Fed's targets and the targets of other monetary policy decision-makers around the world.

With the surprise OPEC+ move, OPEC's de facto leader and top global oil exporter Saudi Arabia is betting on overtightening the market to reap higher oil revenues in the short term, gambling on expectations that U.S. shale will look at higher profits instead of production this time, unlike in any of the previous oil price spikes in recent years.

"The kingdom might be pushing its luck if it pursues the hawkish path for too long," Vandana Hari, founder of Vanda Insights, told Bloomberg over the weekend. 

The highest oil prices in more than 14 months could hurt global oil demand recovery, the very indicator that the Saudis want significantly improved before moving to ease the production cuts.

By Tsvetana Paraskova for Oilprice.com 8^th March 2021

Oil Sees Biggest Single-Day Loss Since April 2020 

WTI slid 8.68% to $58.99 per barrel by 4:04pm ET, while Brent had slipped 8.01% to $62.55 per barrel. It is the biggest drop in absolute terms since April 2020, when oil slipped into negative territory.

Analysts have been volleying predictions during the recent price rally, with bulls signaling there is more room to run, making proclamations of a coming super-cycle. Others, more cautious in their outlooks, have warned for a couple of weeks that the optimism present in the oil markets were unjustified.

The recent rally was largely on the back of OPEC+ production cuts—or rather, the fact that they agreed to hold production steady in April, instead of ramping up production as the market had anticipated. The passing of the 3^rd round of stimulus in the United States had also bolstered oil market sentiment.

But a rising dollar, increased crude inventories in the U.S., growing fears of a resurgence in coronavirus cases and vaccine safety concerns in Europe have proven worthy adversaries.

Those concerns are linked directly to oil demand resurgence. And markets are viewing this demand picture as less favourable today, as shown by crude futures which show the market backwardation is waning.

WTI’s front-month contract is once again trading at a discount to the following month. 

Crude oil WTI April contract is now trading at $59.46 per barrel, while the May contract is trading at $59.57. WTI’s April contract is now down $5.14 on the day.

This is the fifth day in a row for oil price declines and the biggest drop in absolute terms since Apr 2020

By Julianne Geiger for Oilprice.com 18^th March 21

Fossil Fuels Will Continue To Dominate For Decades To Come

The stone age didn’t end due to a lack of stones, and the oil age will end long before the “world runs out of oil”. This quote, often attributed to Saudi Oil Minister Shiekh Yamani, highlights a vital and frequently misunderstood fact about the oil industry. Oil supplies are not going to run out, but oil will eventually be replaced by cheaper, cleaner, and more efficient energy sources. This misunderstanding has led many analysts to predict the death of the oil industry. The Paris Agreement has set a global goal to control climate change and reduce the temperature of the earth. That goal will not be achievable until the world shifts from fossil fuels to clean and renewable energy. These ambitious targets are sure to accelerate the global energy transition away from fossil fuels, but it remains unclear just how long that transition will take.

On his very first day in office, President Biden cancelled the Keystone XL Pipeline. China has vowed to be carbon neutral by 2060 and recently launched the world’s largest carbon trading market. Meanwhile, both Japan and the European Union have promised to eliminate carbon emissions by 2050 and the EU aims to be carbon neutral by 2050. The Biden administration has promised to set aside $2 trillion for decarbonization and plans to re-join the Paris Agreement. All of these commitments are certainly impressive in theory, but in reality, they are going to run into two major problems. The first is achieving the adoption of renewable energy at an incredibly unrealistic speed, the second is ensuring that the system that we are transitioning to does what it needs to do. It is important to note that we do not currently have many of the technologies that we will need if we are to reduce carbon emissions by the levels set out in the Paris Climate Agreement.

In most energy transition plans, Carbon, Capture, and Storage (CCS) systems are one of the key technologies that will help curb CO2 emissions by capturing carbon from the environment and storing it in subsea facilities. However, as of 2020, only 26 facilities were working globally, capturing 40 million tons of carbon dioxide. Meanwhile, in 2019 the world emitted more than 35 billion tons of carbon. Closing that gap requires serious technological breakthroughs, which may be why Elon Musk is offering $100 million to the best carbon capture technology in his new competition.

Another challenge to this transition is the sheer size and influence of the oil and gas industry. The oil and gas industry has a gargantuan infrastructure, and an elaborate network of pipelines, wells, and other facilities. This is the infrastructure that our current energy grids are based upon. According to Czech-Canadian scientist and policy analyst Vaclav Smil, the U.S. would have to dedicate 25–50 percent of its landmass to solar, wind, and biofuels if it hopes to satiate U.S. energy consumption with renewables. Such a drastic change will come up against plenty of resistance from the oil and gas industry and will take significant time and investment.

The next big problem with the energy transition is the inherent limitations of renewable energy sources. One of these is power density i.e. amount of power per unit volume, denominated as Watt per square mile (W/m2). The power density of an energy system running on fossil fuels is “two to three orders of magnitude” above that of a wind or hydro-generation system according to Smil. Closely related to this concept is the element of spatial constraints. Renewable energy systems, due to their low power density, require vast swathes of land. An study by MIT predicts that 33,000 square kilometers of land would be required in order to power U.S. electricity demand with solar energy. Similarly, it would require using half of the UK landmass for wind turbines if the country were to use wind for all its energy needs.

While the ambitious pledges from various international bodies and governments would suggest the energy transition is near, the gap between theory and reality here is vast. Fossil fuels supplied 84% of global energy needs in 2020, which is a worrying number for those eager to reduce CO2 emissions. According to Climate Action Network., the EU will need to increase its use of renewables by 50 percent by 2030 and 100 percent by 2040 in order to adhere to the Paris Agreement’s climate goals.

Source: Our World In Data

But it isn’t all doom and gloom for energy transition proponents. The focus on Environmental, Social, and Governance (ESG) investing is influencing how private companies act. BlackRock, the largest asset manager on earth with over $7 trillion under management, has stressed that companies need to take climate change seriously. These moves in the private sector could significantly accelerate the energy transition.

While optimism has helped to galvanize support for a global energy transition, a degree of realism is necessary as well. It will likely be decades before a full global energy transition can take place, and in the meantime, the most effective way to reduce emissions would be to control consumption. This is a process that faces financial, technological, and social hurdles, and predicting how long it will take is a near-impossible task. The energy transition may have begun, but there is a very long way to go before fossil fuel dominance is truly challenged.

By Osama Rizvi for Oilprice.com

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

Many thanks to all those who supported our most recent good causes campaign, and that support has helped us to donate 1,000 litres of heating oil to two of the Good Causes you had nominated. We are delighted to announce that

St Mary the Virgin Church, Mendlesham

&

East Hoathly Parish Church, East Sussex

will each receive 500 litres of heating oil, which can either be used to heat the church or to support other good causes within the local parish community.

You can also find out more about the Goff Good Causes project and see past winners here.

Voting is open!

Our offices and depots have each selected one church, local to them, from your original nominations. The lucky ten are listed below. 

Now we need your help! 

We will donate 500 litres to each church that receives 1,000 votes of support. So make sure to like, vote and share. 

• If you would like to vote but don't have a Facebook account a friend or family member is more than welcome to vote on your behalf. You can learn more about Goff Good Causes here.

Instead of one church benefitting from 500 litres of heating oil, we will be asking you to help us give away 5,000 litres to 10 different churches which have been selected by our local offices and depots from your original nominations. 

We will donate 500 litres to each church that receives 1,000 votes of support. This can be used to heat the church or distributed to support local parish communities. 

The campaign will start next Thursday so keep your eyes open for our announcement!

Oil Market, Exchange Rate and Heating Oil Price Information February 2021.

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $55.84                Price at End of Month: $65.83

Highest Price in Month: $65.87                Lowest Price in Month: $55.84

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.3663                              End of Month: 1.3981

Kerosene (Heating Oil) Cargo Price $ per tonne       

Start of Month: $473.00                                           End of Month: $473.00

Highest Price in Month: $556.00                            Lowest Price in Month: $544.00

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 3.52 ppl

Market Commentary:

In the UK the news centred on the race to jab verse the spread of new variants, but on the international stage oil supply and fuel demand was back driving the market. Heating Oil prices were supported by massive snow falls on the East Coast of the USA which is the largest heating oil market in the world and the cold that crippled Texas.

Crude oil fundamentals were mixed compared to refined products. Crude demand has fallen due to the refinery outages. However, US shale production has also fallen and according to some producers between 200-500 bpd of production might never return due to the serious damage caused by the ice storm. Attention is also focused on the OPEC+ meeting on 3rd and 4th March. We believe Brent Crude will struggle to post a clear break higher above $65/b. in the near term.

The fundamentals for kero / diesels were mixed but generally supported by the Texan refinery outages following the ice storm two weeks ago. Total distillate stocks fell sharply by 5mb and demand remains up 6.4% on the year when based on a four week average. With demand generally healthy and stocks falling the potential to see a downside for kero / diesel prices is limited.

Market commentary on the Newsfeeds:

Oil Prices Rise As Producers Stick To Supply Curbs

Oil prices hit a one-year high early on Tuesday on the back of improving market fundamentals and a general risk-on market sentiment.

As of 10:08 a.m. ET on Tuesday, WTI Crude was up by 2.45 percent at $54.85, after hitting $55 earlier in the day, and Brent Crude was trading up 2.32 percent at $57.65. 

Oil prices on Tuesday extended their gains from Monday, amid expectations that the oil production curbs by OPEC+ and its leader Saudi Arabia would tighten the market in the first quarter. Saudi Arabia has said it would reduce its crude oil production by an additional 1 million barrels per day (bpd) beyond its quota in the OPEC+ pact.

The members of the alliance were estimated to have complied almost completely with their production cut quotas in January, giving the market hopes that the producers would not over-produce now that the cuts were eased by 500,000 bpd last month.

Russia, the leader of the non-OPEC group in the OPEC+ pact, is estimated to have stayed within its 125,000-bpd allowed production rise in January. According to Reuters estimates, Russian oil production rose last month, but the 120,000-bpd increase in production from December was lower than the 125,000-bpd additional allowed rise.

The futures curve continues to firm into backwardation, the state of the market that points to tighter supplies with the prices of the nearer futures contracts higher than those further out in time.

OPEC Secretary General Mohammad Barkindo was also pleased with the backwardation at the opening of the OPEC+ panel meeting on Tuesday.

“With the crude oil market currently switching into backwardation, we are hopeful that 2021 will be a good year for overall demand,” Barkindo said.

“Boosted by a general increase in risk appetite as seen through stocks together with an improved fundamental outlook. Saudi production cuts combined with strong Asian demand have, despite lockdowns and reduced mobility, started to bite with the backwardation in Brent rising to a one-year high, a sign that large stockpiles are shrinking fast,” Saxo Bank said in market commentary early on Tuesday.

“Also, in China, the recent liquidity squeeze may be over for now thereby reducing demand risks from the world’s biggest importer,” Saxo Bank’s strategy team wrote. 

By Tsvetana Paraskova for Oilprice.com 2^nd Feb 2021

Crude pushes to 1-year highs as OPEC+ cuts tighten supply outlooks

OPEC+ commitment supports prices, with US Dollar tests two-month highs and Brent approaching resistance at $60/b

New York — Crude oil futures pushed to fresh one-year highs Feb. 4 as the market eyed a tightening global supply picture. NYMEX March WTI settled 54 cents higher at $56.23/b, and ICE April Brent climbed 38 cents to $58.84/b.

Oil prices continued to ride a wave of optimism following the Feb. 3 OPEC+ Joint Ministerial Monitoring Committee meeting that highlighted the success of production cuts in lowering global oil inventories and made no recommendations for any changes to the alliance's production cut accord.

The overnight rally stumbled in midmorning US trading amid a rising US dollar, but prices were able to shrug off those headwinds amid tightened supply outlooks. The ICE US Dollar Index climbed above 91.5 in afternoon trading, up from 91.15 on Feb. 3 and on pace for the highest close since late-November.

"OPEC restraint, as well as struggling US oil production, is causing global inventories to tighten," Price Futures Group analyst Phil Flynn said in a note. "So much so that the world is headed towards a substantial supply deficit in the next year as we continue the oil demand vaccine-related recovery pace."

The oil rally may be running out of steam as prices reach levels that would entice producers to ramp up output analysts said.

"The closer we shift towards $60/b [for Brent], one would have to assume it could be a potential faster game-changer and OPEC+ production cut unwinder. Not to mention [that] US shale will be eager to step on the production accelerators," Stephen Innes, chief global markets strategist at Axi, said in a note Feb. 4.

NYMEX March ULSD settled down 1 cent at $1.7005/gal, while March RBOB declined 38 points to $1.6448/gal.

"Crude continues to rise on strong momentum from falling stockpiles and COVID vaccine progress," OANDA senior market analyst Edward Moya said in a note. "It's been quiet on the energy front so far, which is allowing energy traders to focus on the improving supply and demand fundamentals."

The ICE New York Harbor RBOB crack versus Brent fell back to $14.44/b in afternoon trading, down from a Feb. 3 close of $14.73/b.

Where Did The ‘Missing Barrels’ From 2020s Oil Glut Go?

While analysts and industry officials hail the tightening of the oil market and the rebalancing of supply and demand, the huge build of global stocks last year poses the question of what happened to all those barrels of oil accumulated during the COVID-19 shock to demand.

The ‘missing oil barrels’ may be distorting the analysts’ view of how balanced the market really is, Jinjoo Lee of The Wall Street Journal argues.

The ‘missing barrels’ issue tends to resurface on the oil market when there is a large distortion of supply and demand or a shock to the balances, which 2020 undoubtedly has.

The market has to contend with ‘missing barrels’ in nearly every oil cycle, according to the paper ‘The COVID-19 Shock and the Curious Case of Missing Barrels’ by Bassam Fattouh, Andreas Economou, and Michal Meidan of the Oxford Institute for Energy Studies.

The so-called missing barrels are those barrels of oil that are basically unaccounted for by the International Energy Agency (IEA).

These barrels are “the gap between the change in inventory implied by global supply-demand balances on the one hand and the observed change in inventory levels by commercial and government entities (adjusted for floating storage and oil in transit) on the other hand,” the authors of the paper wrote in December.

Based on IEA data, the authors estimated that in the first half of 2020—the worst of the COVID-induced shock—inventories globally increased by 1.39 billion barrels of oil. According to the IEA, out of the total inventory build in that period, OECD stocks accounted for 25 percent of the increase, while floating storage and oil in transit accounted for 8 percent of the rises. But the remaining 940.4 million barrels, or 68 percent of the total increase to balance, is “essentially unaccounted for including changes in non-reported stocks in OECD and non-OECD areas that the IEA labels as “Other & Miscellaneous to balance.”

According to the Oxford Institute for Energy Studies, the volume of missing barrels in the first half of last year was the largest ever recorded gap between observed and implied stocks since at least 1990.

These estimates highlight not only the opaque nature of observed oil stocks in China and other countries in Asia. They also highlight the argument that calling the ‘market rebalancing’ – and therefore, predicting oil price trends – is much more art than science. 

By Tsvetana Paraskova for Oilprice.com 16^th Feb 2021

Is This Oil Rally The Start Of Something Much Bigger?

Commodities have rallied in recent months, outperforming equity indexes amid expectations of an economic recovery, easy monetary policy, and rising inflation. 

The commodity bull run across the board—spearheaded by a 50-percent jump in oil prices over the past three months—isn’t finished running, analysts and investment banks say. Some of the biggest investment banks have even started to call the start of a new commodities supercycle, which by definition, lasts years—typically about a decade.

Yet, not all investment banks and analysts are as convinced that we are in for a commodities supercycle across the board, warning that the term supercycle is too optimistic for a bull run that could fizzle out within a year or two and could still fall victim to negative COVID-related impacts.  

Commodity Rally

As early as in October 2020, a few weeks before the first announcement of an effective vaccine candidate, Goldman Sachs said that commodities were headed toward a bull run in 2021. Hedges against expectations of rising inflation, a weakening U.S. dollar in which most commodities are traded, and signals of “very easy” monetary policy from central banks would be the key drivers of rallying commodities, Goldman Sachs said back then.

Goldman expected the S&P Goldman Sachs Commodity Index (GSCI) to return 42.6 percent for energy over a 12-month period, and 17.9 percent for precious metals.

Over the past three months, the S&P GSCI has outperformed the S&P 500 index, with the commodity index rising by 25 percent, compared to (just) a 9-percent increase in the S&P 500.

Over the same period, oil prices have rallied from the low $40s to above $60 a barrel, driven by vaccine rollouts, OPEC+ production cuts, and expectations of a tight market and rising oil demand later this year when economies return to growth, helped by large stimulus packages.

Some Drivers Of A New Supercycle Are Here…

According to JPMorgan, there are reasons to believe that a new commodity supercycle may have just started.

“We believe that the new commodity upswing, and in particular oil up cycle, has started,” JPMorgan analysts led by Marko Kolanovic said in a note last week, as carried by Bloomberg.

The latest commodity supercycle ended in 2008 after a 12-year run, boosted by the super-spending and economic surge in China. 

JPMorgan now sees several potential factors underpinning a new supercycle: post-pandemic global economic growth, “ultra loose” monetary policies, increased and tolerated inflation, weakening U.S. dollar, financial inflows to hedge inflation, metals for energy transition markets such as batteries and electric vehicles (EVs), and underinvestment in new oil supply.

The International Energy Agency (IEA) warned last year that if investment in oil were to stay at the 2020 levels over the next five years, it would reduce the previously expected level of oil supply in 2025 by nearly 9 million barrels per day (bpd).

This year, global upstream investments will stay low, just like they were in 2020, Wood Mackenzie said in December, expecting upstream oil and gas investment at a 15-year low of just US$300 billion, down by 30 percent from the pre-crisis level of investment in 2019.

“The world may be sleepwalking into a supply crunch, albeit beyond 2021. A recovery in oil demand back to over 100 million b/d by late 2022 increases risk of a material supply gap later this decade, triggering an upward spike in price,” said Simon Flowers, Chairman and Chief Analyst at WoodMac.

Then, “very easy monetary policy” and reflation trade could push oil prices as high as $100 a barrel next year, Amrita Sen, chief oil analyst at Energy Aspects, told Bloomberg earlier this month.  

In the week to February 9, hedge funds increased bullish bets on 24 major commodity futures by 5 percent to a fresh high of 2.7 million lots, representing a nominal value of $143.7 billion, Ole Hansen, Head of Commodity Strategy at Saxo Bank, said, commenting on the latest Commitments of Traders report.

The combined net long position—the difference between bullish and bearish bets—in Brent and WTI has now increased to the highest in 28 months, while the net long in the grain sector in agriculture is not far from the record set in August 2012, Hansen noted.

Post-pandemic growth, tightening supply, and continued demand for reflation hedges pushed the Bloomberg Commodity index to a 27-month high, Hansen said.

But Is This The Start Of The Next Commodities Supercycle?

Although crude oil and other commodities have rallied and signals have emerged to support the call for a new supercycle, some analysts are cautious and say it is a little early to proclaim the beginning of the next commodity supercycle.

What we see in oil and commodities right now is a cyclical recovery, but a supercycle could be “two to three years away,” George Cheveley, portfolio manager at asset management company Ninety One, told Financial Times’ Natural Resources Editor Neil Hume.

This bull run is unlikely to turn into a supercycle for commodities, because while investment may be depressed, “the material is abundant” for many commodities, including crude oil, Ed Morse, managing director and global head of commodities research at Citigroup, told the Financial Post in an interview last week.

Commodities have certainly benefited from the optimism that post-COVID growth and stimulus packages will boost demand and prices, but it may be a little premature to trumpet the next decade-long across-the-board commodities supercycle.   

By Tsvetana Paraskova for Oilprice.com 16th Feb 2021

$100 Oil: Big Banks Believe A New Oil Supercycle Is Beginning 

Some of the world’s biggest names in oil trading and analyzing can’t seem to get on the same page when it comes to predicting what will happen next for the volatile commodity.

Some, like Jeffrey Currie of Goldman Sachs and Christyan Malek of JPMorgan, according to the Financial Times, are confident that oil is ready for the next supercycle—a prolonged rise in the price of oil.

And when they refer to this rise, they’re talking $80, or even $100 per barrel.

Others, like oil analyst Arjun Murti who correctly predicted the last $100+ per barrel achievement seen between 2008 and 2014, say that talk of this next supercycle may be a bit hasty.

For Malek, he sees a situation where demand outstrips supply, before “we don’t need it in the years to come.”

The reason for supercycle predictions is simple: stimulus packages, most notably the stimulus package that the U.S. government is expected to roll out, are expected to boost consumption.

And according to Currie, this stimulus will create a “significant, commodity-intensive consumption” as the stimulus package is mostly targeting lower and middle-income households.

“These people don’t drive Teslas,” Currie explained. “They drive SUVs”.

Murti, on the other hand, thinks that if oil demand were to increase by a half a million barrels per day over the next year, it wouldn’t be enough to outstrip supply.

As a point of reference, global oil demand sank roughly 10 million barrels per day as a result of the pandemic in 2020.

If, however, oil demand were to pick up steam by as much as 1.4 million barrels per day, a supercycle may follow.

Veteran trader Pierre Andurand told the Financial Times that the fate of oil prices rests on OPEC—specifically on how much oil they supply.

Standing in the way of the next supercycle, says Andurand, could be Iran returning to the global oil markets, and OPEC’s production in general.

Retired veteran trader—a particularly successful one that made a not-so-small fortune on oil’s last supercycle—Andy Hall, sees the oil market in “terminal decline” the Financial Times writes, and likened any price rally as a dead cat bounce.

By Julianne Geiger for Oilprice.com 16^th February 2021

Oil Demand Won’t Be Wiped Out By Energy Transition

The COVID-19 crisis has accelerated the timeline of peak oil demand while government policies to build back better and greener are speeding up the energy transition, major oil companies and forecasters say.

Most industry professionals and analysts believe that peak oil demand will occur at some point between the end of this decade and the latter half of next decade—sooner than thought before the pandemic.

Some, like BP, even say that the world may have already passed peak oil demand. Yet, it is also BP’s chief executive Bernard Looney who said at CERAWeek’s India Energy Forum in October that “peaking of oil demand does not mean the end of oil. Oil will be around for a very, very long time.”

Regardless of when peak oil demand occurs, the world will not stop using oil, and any decline will only be very gradual, despite the wishes of environmental activists that Big Oil (and any oil firm) stop pumping oil immediately and leave the world to run on green energy.

The reality is that even the energy transition will need a lot of fossil fuel-powered energy to build out the infrastructure necessary to support a shift to green energy sources, Neal Kimberley, commentator on macroeconomics and financial markets, writes for South China Morning Post.

Demand for oil is here to stay in the coming decades, even if the world is moving irreversibly toward increased electrification in transport and a growing share of renewable energy sources in the power generation mix. ‘Peak oil demand’, after all, means that global demand will stop growing, not the world weaning itself off crude.

In the coming years, the global recovery from the pandemic is set to bolster oil demand and oil prices, on the one hand. On the other hand, the COVID-related crash in investments in new oil supply—necessary to offset declines from maturing oilfields—could create a supply gap amid solid oil demand. And that could result in oil price spikes in as early as two or three years.

BP and Shell, for example, will be reducing their oil production as part of the net-zero pledges and the foray of Europe’s Big Oil into renewable energy, including EV charging, solar and offshore wind power, hydrogen, and carbon capture. But the world will still need oil in 2030 when BP plans to have cut its oil and gas production by 40 percent. Even if oil demand peaks by 2030, global consumption will plateau, not plunge.

If BP isn’t pumping the oil the world needs, someone else will, probably Saudi Aramco, because the world will need at least as much oil as it did in 2019—around 100 million bpd.

Growing emerging economies in Asia will need more and more oil even if fuel demand from light-duty vehicles in developed economies begins to decline due to the growing share of electric vehicles (EVs) in the fleet.

Oil demand for transportation fuel is just one part—a third, to be more precise—of total global oil consumption. Electric vehicles (EVs) are set to displace some oil demand for gasoline and diesel in mature economies.

But the rising preference for non-electric SUVs, which consume on average over 20 percent more energy than a medium-size car for the same distance travelled, completely cancelled the estimated 2020 reduction of oil demand due to higher EV share, the International Energy Agency (IEA) said in an analysis last month. The growth in SUVs in the United States, China, and Europe completely offset the 40,000 bpd reduction in oil demand from higher EV sales.

There is a clear trend for SUVs preferences, and while electric SUVs offerings are certainly not lacking, the share of e-SUVs needs to proliferate to over 35 percent by 2030 if the world is to shift onto a path aligned with the climate goals of the Paris Agreement, the IEA said. Last year, fossil fuel-powered SUV sales accounted for nearly 97 percent of global SUV sales.

While road transportation fuel drove oil demand growth in the past decade, the next decade’s growth will be driven by petrochemicals, the IEA reckons. Emerging economies will continue to need increased volumes of oil, and the economy needed to build out the infrastructure for the energy transition will also need fossil fuels.

Greener economies will eventually start eroding global oil demand, but it will be a prolonged decline in a decade or two from now. At the same time, if low investment to replenish production from maturing oilfields persists, it could open a supply gap, overtighten the market, and lead to oil price spikes.  

By Tsvetana Paraskova for Oilprice.com 24^th Feb 2021

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

But rather than us telling you how great we think we are, we thought we would let you, our customers, give an honest account of our pricing, service and the team that deliver it to you.

Which is why we partner with TrustPilot to allow trusted, independent reviews to be made about Goff Heating Oil.

TrustPilot the world's largest and most trusted review platform aims to give everyone a voice, by offering anyone the opportunity to leave a genuine review, which is published instantly without censoring. This way TrustPilot guarantee to offer an honest voice on the quality of a company.

To date Goff Heating Oil has been reviewed over 9000 times, with an average score of 4.8 out of 5. We have been awarded their Excellent rating and their ranking as the UK's Number 1 Heating Oil Supplier.

We won’t rest on our laurels however.  We read all the feedback we receive and continually try to provide the best service we can to you our valued customers.

As we made plans over a year ago the landscape was quite different at this time and as lockdown 1 came, we decided to shelve this idea for later. However, with the realisation that this was now the new normal and could be with us for some time we decided to push on once more.

After a short tender process, we were delighted to appoint fellow Norfolk Chamber members Trendy Grandad as the production company who we would work with. The brief was simple we wanted to communicate what is involved in bringing heating oil to customers in the East of England, but to do this in a more imaginative way than just a member of Goff team talking to camera.

Goff presents:

A Day in the life of Heating Oil

Working closely with Stokely and Adam we soon had a script and an ambitious storyboard that we were all happy with. What’s more we were also delighted to be allowed access to one of the U.K.’s oil refineries as access to a refinery, for obvious reasons, is highly restricted. To be able to get the permissions in place to film really was an achievement.

The shoot itself was a little more stop start than we had planned with the emergence of lockdown 2 meaning that once again there was a slight pause to proceedings. But with lockdown lifted it was “Action”.

First up was a rude awakening as the team needed to be at the Wymondham Depot for 5 AM, ready to film the first of the fleet of our articulated tankers as they set out on their daily journeys to the refineries across the UK. Our host for the day was experienced driver Gordon and we followed and filmed every move that Gordon takes on this journey too Harwich and back.

The refinery itself was quite something as a mass of pipes and storage tanks take the deliveries of crude oil before refining them into the many different products that customers demand including, diesel, petrol and kerosene or heating oil as it’s known. Once the articulated lorry has taken on a staggering 38000 litres of heating oil, then it’s back to one of Goff’s wet depots where the oil is transfered into storage ready to be delivered to local customers. 

The next morning and at a more leisurely start time of 7am we followed one of the domestic delivery tankers carrying 12500 litres of heating oil set to be delivered to customers across Norfolk. This was a fascinating insight into the challenges that the oil delivery drivers face every day from access issues down tight country lanes, to navigating poor parking in tight cul-de-sac’s, locked oil tanks and the odd lively dog. This was all water of a ducks back to our driver who tirelessly reeled his hose in and out at each of the many drops he made.

Shooting on a scheduled delivery round gave us a number of challenges, but it was essential that the film reflected what really happens. So, no actors or stand ins were used and the customers reactions are totally genuine, trickier to capture but in our opinion, it was definitely worth it. Thank you to all our fabulous customers who were happy to be involved.

With more footage than we knew what to do with the team at Trendy Grandad did what they do best, edit and edit until we had the desired 1 min film and here it is.

We hope you like it, we certainly enjoyed making it and would like to thank all those involved, from Customers, Goff employees, the Harwich refinery and those at Trendy Grandad.

The tanker became stuck in the snow while delivering central heating oil to Aldborough Community Centre, before it was eventually pulled to safety by the 1949 Field Marshall tractor.

Local resident Guy Fiske was woken from his lay-in to find the Goff tanker wheel-spinning on the village's icy roads.

And, when he left his house later on, he could not believe his eyes when he saw the vintage tractor rescuing the tanker.

Our heating oil tanker drivers have found some of the conditions in the rural areas challenging and dangerous. The impact of the snow and conditions experienced varies hugely, with some villages having good accessibility whereas others are cut off for HGV vehicles. Our team have many years experience but none can claim they have 72 years worth. 

Source: EDP

This morning our Heating Oil Tanker drivers have found some of the conditions in the rural areas challenging and dangerous. The impact of the snow and conditions experienced varied hugely, with some villages having good accessibility whereas others are cut off for HGV vehicles.

Today we were attempting to make over 1000 heating oil deliveries across 60 different routes with our deliveries scheduled in the order and service level requested or paid for, at the time of order, prior to this snowfall.

We are continuously reviewing routes and reallocating orders based on the information received by the drivers tackling them. A disruption on a route prior to your delivery may result in work being delayed or reallocated. All our efforts are dependent on weather and road conditions, and we thank customers for their understanding and patience.

We will continue to try to advise our customers with outstanding orders of any change or the intended delivery attempt, by text, email, or phone (where it has been requested). A tanker in your village may not have your order on it.

If you have an order outstanding please keep access to your tank available and please respect our Covid secure delivery procedures.

Oil Market, Exchange Rate and Heating Oil Price Information January 2021.

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $50.29                Price at End of Month: $55.84

Highest Price in Month: $56.17                Lowest Price in Month: $50.29

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.3580                              End of Month: 1.3732

Kerosene (Heating Oil) Cargo Price $ per tonne       

Start of Month: $432.00                                           End of Month: $458.50

Highest Price in Month: $473.50                            Lowest Price in Month: $432.00

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 2.45 ppl

Market Commentary:

Vaccine brings recovery – recovery brings back oil demand!

Why The Last Leg Of The Oil Demand Recovery Is The Hardest

Over the past six months, excess U.S. crude oil and product inventories have declined from their surplus at the start of the summer of 2020. Petroleum inventories have been slowly falling and are now at just single-digit-percent surpluses over five-year averages, compared to 20-30 percent excess over five-year seasonal averages last summer.   Demand for gasoline and other petroleum products in the United States has recovered from multi-year lows in April and May, but the last leg of the recovery to pre-pandemic levels proves to be the most difficult and seems to have stalled at the end of 2020.  

Sure, consumption has recovered from the spring of 2020, and the excess of inventories has been shrinking. This has come, however, at the expense of significantly reduced refinery utilization and crude oil processing since oil prices and demand crashed in March. Refiners are still processing crude at levels below normal, with refinery utilization across the United States at just 80.7 percent in the week ending on January 1, compared to 93-percent utilization for the same week in the previous year, EIA’s weekly petroleum report showed last week. 

This latest report showed a major crude oil draw of 8 million barrels, but substantial inventory builds in gasoline and middle distillates. 

Still, excess stocks of all types have been trending down in recent months, and middle distillate consumption such as diesel are back to pre-crisis level, Reuters market analyst John Kemp writes.

Over the past four weeks, distillate fuel product supplied—the proxy for demand—averaged 3.7 million barrels per day (bpd), down by just 0.3 percent from the same period last year, EIA’s report showed. 

However, the largest component of U.S. oil demand—gasoline consumption—was still down by a double-digit percentage. Over the past four weeks, motor gasoline product supplied averaged 7.9 million bpd, down by 11.8 percent from the same period last year, EIA said. 

This suggests that the last part of the oil demand recovery will be the hardest, with the most recent data pointing to a stall again due to reduced travel amid measures to fight soaring COVID-19 cases. 

In the week to January 1, implied U.S. gasoline demand fell to levels last seen in May 2020, according to Bloomberg estimates of EIA data on motor gasoline product supplied. 

There’s no evidence of a substantial pick-up in gasoline demand in the immediate term, and the still raging pandemic will continue to weigh on travel in coming weeks, analysts told Bloomberg last week. 

In 2020, vehicle travel in the U.S. dropped to multi-year lows, with April vehicle travel the lowest on record dating back to 2000, according to the EIA. Average gasoline prices were also down last year to the lowest annual average since 2016. 

End-December saw the highest U.S. gasoline price for nine months, but not because of high demand. 

“Despite low demand, pump prices are more expensive because crude oil has seen steady gains,” AAA spokesperson Jeanette Casselano McGee said. 

U.S. gasoline demand was at the lowest level for the last week of December in 23 years (since 1998)—at 8.1 million bpd, with holiday travel down by at least 25 percent, AAA said last week. As of January 4, AAA expected gasoline demand to dwindle in coming weeks as the holiday season ended. 

This year, U.S. gasoline prices will rise compared to 2020, to an average of $2.44 per gallon, with a low point in January and a possible high point in July, according to GasBuddy’s Fuel Price Outlook. However, due to the pandemic, the margin for error is 19.8 percent, the highest level of uncertainty in predictions since GasBuddy started its forecasts in 2012. 

“With the coronavirus in the driver’s seat, 2021 looks to be a very uncertain year for gas prices with a wide range of possibilities. Add in President-elect Biden and the potential for new policy adding into the equation, we could see gas prices coming into 2020 like a lamb and leaving like a lion,” said Patrick De Haan, Head of Petroleum Analysis at GasBuddy. 

The biggest unknowns for U.S. gasoline and total oil demand, of course, will be the pandemic, how fast vaccines are being rolled out, and how fast they would allow a return to normality, analysts including GasBuddy say.

At least in the early months of 2021, U.S. gasoline demand will struggle to reach pre-crisis levels.  

By Tsvetana Paraskova for Oilprice.com 11th Jan 2021

OPEC Withheld 1.3 Billion Barrels Of Oil To Prop Up Prices

The Organization of Petroleum Exporting Countries withheld some 1.3 billion barrels of oil supply last year to keep prices from falling even further, the secretary-general of the cartel said.

“I am sure each and every one of us can recall the dire situation the industry was in, which was most dramatically illustrated on 20 April 2020 when the price of WTI went negative. It was a visceral day, and one often described as ‘Black Monday.’” Mohammed Barkindo said, speaking at the S&P Global Platts Americas Petroleum and Energy Conference.

“It was a time when the industry faced a potential crude oversupply of nearly 1.3 billion barrels. There were even deep concerns that some storage hubs could actually reach tank tops. Thankfully, this never came to pass, in part due to the decisive actions of the DoC [the Declaration of Cooperation]. Since then the DoC has shown great courage and flexibility and has adapted as and when necessary to changing market dynamics, particularly with the post-summer advent of second and third waves of COVID-19.”

OPEC+’s intervention into the global oil supply situation was indeed crucial for reversing the oil price decline that saw WTI dive below zero, even though the latter event was as much a result of speculator moves as of oil’s fundamentals, if not more so.

This intervention has reasserted OPEC as a factor to be reckoned with on oil markets after growing doubts about the organization’s relevance amid the rise of U.S. shale. Indeed, Barkindo noted that OPEC’s work is far from done as the pandemic is still around despite the good news about the start of mass vaccinations in most parts of the world.

“Vaccines offer some much-needed light at the end of the tunnel, but the ever-increasing number of COVID-19 cases, and sadly the human loss as well as renewed lockdowns, are a harsh reminder of how delicate the situation remains,” the official said.

By Irina Slav for Oilprice.com 28^th Jan 21

China Continues To Be Main Driver For Oil Demand in 2021

Expanding refining capacity in the world’s largest oil importer, China, continues to support the global oil market and demand, even at times when demand elsewhere is tepid, participants said at the ongoing Argus Crude Live Virtual Conference.

The expansion of refining capacity in China—thanks to new refineries from state oil majors and from independent refiners, which were allowed to import crude oil under government-allocated quotas five years ago—has supported global oil demand, even at the price of exacerbating a fuel oversupply in China and increase Chinese exports to other Asian markets, depressing regional refining margins.

According to Argus and its conference participants, Chinese refining capacity is unlikely to shrink in the near term, because the government has price control to ensure refining margins for local producers.

Chinese authorities are not expected to give up control over the prices of refined oil products, the Argus conference participants said.

The capacity expansions and the guaranteed price for refined products in China supported oil demand in the world’s top oil importer even during the early onset of the pandemic last year, participants at the conference said.

After a pandemic-hit slow start to 2020, China’s refiners boosted production from April, thanks to ultra-low crude oil prices and a rebound in the Chinese economy and fuel demand, setting a new record for crude oil processing volumes. Crude oil throughput at China’s refineries averaged 674.41 million tons, or 13.51 million barrels per day (bpd), in 2020, a 3.2-percent increase over the previous year, according to data from the National Bureau of Statistics cited by Argus.

Last year, when international crude oil prices sank in March, April, and most of May, Chinese refiners took advantage of the lowest prices in years and stocked up on low-priced crude. For several months, China was smashing crude oil import records through the summer, and tankers had to wait for weeks to discharge the crude as port congestion was growing. Several new refining units also contributed to China’s record-high crude processing rates in 2020, as did the higher import quotas given to independent refiners—the so-called teapots—by the government. 

By Charles Kennedy for Oilprice.com 28^th Jan 21

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

Beds for Bullies

the Bull Terrier Rescue centre in Wisbech St Mary, is the winner of our Animal Good Causes vote. 

As the poll was so well supported, with Beds for Bullies taking more than half the votes, we've decided to double the prize to 1,000 litres of heating oil. This should keep more paws warm this winter.

Special Staff Prize

Many of our staff are animal lovers and followed the poll closely. One post in the facebook comments section amazed the team:

"The Suffolk Punch Trust are helping to preserve a native horse to the UK that is rarer than the giant panda!"

And as result of that comment they have awarded the Suffolk Punch Trust a special staff prize of 500 litres of heating oil to assist in the work they do.

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $46.96                Price at End of Month: $50.41

Highest Price in Month: $52.04                Lowest Price in Month: $46.96

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.3363                              End of Month: 1.3669

Kerosene (Heating Oil) Cargo Price $ per tonne       

Start of Month: $403.50                                           End of Month: $440.25

Highest Price in Month: $457.75                            Lowest Price in Month: $403.50

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 2.81 ppl

Market Commentary:

Christmas in chaos – the vaccination program starts but a new strain of the virus and the Brexit negotiations cause chaos in the market. 

The Top 5 Energy Stories Of 2020

Some years there is an energy story so big that there’s no question it belongs at the top of the list. The Deepwater Horizon oil spill in 2010. The Fukushima Daiichi nuclear disaster in 2011. In 2020, that story was the emergence and subsequent consequences of the Covid-19 pandemic.

1. Covid-19 pandemic wreaks havoc on the energy sector

Many of the big energy stories of 2020 are directly attributable to the fallout from the Covid-19 pandemic. Oil demand was crushed beginning in the first quarter as stay-at-home orders were implemented. Airline travel plummeted. Demand for gasoline plunged to a 50-year low. Ethanol demand for gasoline blending fell sharply.

Oil prices fell all the way into negative territory, and U.S. oil production fell in response. Oil companies saw their share values get crushed. All of those are major energy stories, but all were a result of the pandemic.

2. Saudi Arabia/Russia price war

In 2019, global oil prices remained under pressure due to growing U.S. shale oil production. In December 2019, OPEC and Russia attempted to respond to hitting oil prices with new production cuts. But then in January, oil demand also began to be impacted as China took measures to control Covid-19.

OPEC members met with Russia in the hopes of announcing additional production cuts that might stabilize oil’s free fall. This time Russia refused and Saudi Arabia slashed oil prices in response. The result was the beginning of a steep slide in oil prices that worsened as the pandemic gained a foothold in the U.S. In just about any other year, this may have been the top story, but this is another story that is in part a consequence of the pandemic.

3. Natural gas prices fall to the lowest levels in over 20 years

One of my 2020 energy sector predictions — which predated the pandemic — was that we would see the lowest average annual natural gas price in more than 20 years. The previous 20-year low happened in 2016, when natural gas prices averaged $2.52/MMBtu for the year.

Indeed, this year prices have been significantly lower. Through December 15th the average natural gas price for 2020 was $2.00/MMBtu. This is partially a function of the pandemic, but primarily a function of years of expanding U.S. natural gas production.

4. ExxonMobil toppled

ExxonMobil had consistently been the largest publicly-traded energy company by market capitalization for a long time. That changed in early October when NextEra’s market capitalization surpassed ExxonMobil’s to become the largest U.S. energy company. Then, a week later Chevron’s market cap surpassed ExxonMobil’s.

But ExxonMobil has been around for a long time, and they didn’t stay down long. By year-end, the company had rallied and regained its top spot. However, given the trends in recent years away from fossil fuels, it may be just a matter of time before NextEra, buoyed by its strong push into renewable energy, surpasses ExxonMobil permanently.

5. Presidential election

This wouldn’t have been a top story if President Trump had won reelection, but Joe Biden’s victory will signal some sharp changes in energy policy. Biden has already announced that the U.S. will rejoin the Paris Agreement on climate change, and his policies are expected to further discourage the use of fossil fuels and encourage the use of renewables.

Honorable Mention

There were several other stories worth mentioning. Many of them are direct consequences of the Covid-19 pandemic.

As I write this, Congress has agreed upon the most significant piece of energy legislation in more than a decade, but President Trump hasn’t signed it. The legislation is part of the $1.4 trillion omnibus spending bill, and if President Trump signs it before year-end then this will be one of the top energy stories of the year. Update: President Trump has signed the bill.

2020 also saw a return of hydrogen to the energy conversation as a potential alternative to fossil fuels. Hydrogen, which was once hyped by President George W. Bush, has a spotty history as the “fuel of the future.” But the dramatic decline in the cost of renewable power has helped return hydrogen to the mainstream conversation. Hydrogen stories were everywhere in the media in 2020.

Carbon emissions recorded the largest decline on record, as a result of the oil demand destruction brought on by Covid-19.

Royal Dutch Shell cut its dividend for the first time in 75 years.

China successfully initiated a nuclear fusion reactor for the first time.

Covid-19 accelerated the pace at which companies have accepted the remote worker. This had dramatic implications across many sectors. Video conferencing services exploded as demand for gasoline plunged. Utility consumption patterns shifted. People relied more on companies like Amazon to deliver goods to their homes.

I will offer up my predictions for 2021 in a couple of weeks, but my guess is that Covid-19 will once again dominate the energy conversation. Hopefully, we will be discussing the rebound in the economy as the pandemic comes under control.

By Robert Rapier 31st Dec 2020 for oilprice.com

Five things to watch in 2021 after oil’s wild ride this year

Industry expected to recover next year, but Covid trajectory and demand concerns loom.

The oil sector was hit harder than almost any other by the pandemic. Oil consumption in 2021 should be at least 5m b/d below where it would have been without coronavirus.

Crude prices fell from near $70 a barrel at the beginning of the year to below $20 in April as lockdowns slashed fuel demand. Prices even briefly turned negative in the US.

After a short but highly damaging price war, Opec and Russia enacted record supply cuts to stabilise the market. But even then, companies were forced to rip up investment plans while European energy majors started to look to a greener future.

As the industry’s turbulent year draws to a close there are, however, signs of a nascent recovery. Crude has crept back to $50 and some investors are betting that the oil cycle is turning, even as expectations of peak demand loom over the horizon.

Here are the five things to watch in 2021:

1. Oil demand

Average oil demand will probably rise by the most on record in 2021. But that is essentially where the good news on consumption ends for oil bulls, with demand expected to be well below pre-pandemic levels.

The International Energy Agency projects consumption will rise by almost 6m barrels a day in 2021 but will average just 96.9m b/d — still well below the pre-pandemic record of 100m b/d in 2019.

Oil demand was also originally forecast to expand by about 1m b/d in 2020 and 2021. That means consumption in 2021 should be at least 5m b/d below where it would have been without coronavirus. In 2009 — as the world economy was slammed by the financial crisis — oil demand fell by just over 1m b/d.

Demand losses come from three main strands. The biggest is jet fuel, with air travel expected to remain severely depressed, consuming 2.5m b/d less than before the pandemic. Gasoline and diesel demand will fare better, but are expected to be restricted in the first half until vaccines are more widely available and will only reach 97-99 per cent of pre-pandemic levels, according to the IEA.

“The next two quarters may not be meaningfully different to now,” said Amrita Sen at Energy Aspects.

The final hit is from the economic fallout, ranging from less demand from manufacturing companies to fewer goods being shipped by sea.

2. Oil supply

The outlook for oil supply is more complex.

The collapse in prices in 2020 has sucked investment out of the industry while practical issues — such as social distancing on oil rigs — has delayed drilling programmes.

Then there’s the US shale sector. Shale transformed the oil and gas industry and its growth put Opec on the back foot for much of the past five years. 

But this relatively expensive source of supply has been hard hit by the crash in prices with US crude output falling from a record 12.3m b/d in 2019 to 11.3m b/d this year, according to the US Energy Information Administration.

Shale has stabilised in the second half of 2020, but the days of gangbuster growth are behind it for now. The EIA sees US supply slipping to 11.1m b/d in 2021.

However, one of the key variables for oil will be how shale and other producers respond if prices rise much above $50 a barrel — a level where most companies can cover their costs.

Globally, the IEA sees production outside of Opec rising by 500,000 b/d next year after falling 2.6m b/d this year.

“Whether oil prices can remain as high and keep these gains is still questionable,” said Bjornar Tonhaugen at Rystad Energy.

3. Opec and its allies

The mismatch between supply and demand puts a lot of weight on what Opec and allies such as Russia do.

They called off a month-long price war in April and agreed to cut almost 10 per cent of global oil production to rescue the market.

The deal was meant to taper, allowing countries to produce more as demand recovers. But a drawn-out crisis has left them stuck with more than 7m b/d of crude still offline. They are expected to meet again on January 4 to discuss adding back 500,000 b/d.

Tensions have risen within the group as they weigh renewed lockdowns against a desire to rebuild revenues.

The question of long-term demand is a cloud that hangs over the entire expanded Opec+ alliance, which has included Russia and other producers since 2016.

Fears of a renewed price war within the group are weighing on sentiment, analysts at RBC Capital Markets argue.

“Market rebalancing remains heavily dependent upon the output management of Opec+,” RBC said.

4. Geopolitics

The biggest geopolitical shift in 2021 will probably come early for the oil market, as Donald Trump departs the White House. Mr Trump became heavily involved with Opec decisions, pressuring Saudi Arabia to raise or lower production in return for his support.

President-elect Joe Biden is expected to be less hands-on with the cartel, but he may end up being no less influential. The potential revival of the Iran nuclear deal could result in Tehran adding close to 2m b/d of crude back to the market if US sanctions ease.

Tensions in some of the weaker oil producers, in Africa, Latin America and other regions, will also be closely watched. All have been hard hit by the drop in oil prices, threatening political stability.

5. Refining

One of the worst sectors of the oil industry in 2020 was refining. Crude was helped by Opec+ group’s supply management, but refiners have fewer levers to pull when demand crashes.

That has meant low margins for much of the year. Permanent plant shutdowns are widely expected to accelerate in 2021, especially in Europe, with consumption patterns shifting east.

If enough plants close, however, that should ultimately boost margins for those left standing.

Source: David Sheppard, Energy Editor FT.com 29th Dec 2020

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

For a heating oil fired boiler annual servicing prevents many of the problems that commonly cause your system to become inefficient, fail or break down. Some of the main reasons for this are mentioned below:-

Boiler 

• Partially burnt fuel deposits and excessive smoke can cause a build-up of soot in the boiler heat exchanger. This will restrict the amount of heat that can be transferred into the heating system water. The cleaner the heat exchanger, the more efficient the boiler will be.

• Oil nozzles regulate how much heating oil passes through the burner. The nozzles are a consumable item because they wear over time. This wear will affect the combustion rate and lower the burner efficiency. If these are not replaced on a regular basis they could cause “sooting up” in the heat exchanger as too much fuel passes through the burner.

• Photocells can glaze over with deposits. Photocells are an important safety feature which detects whether the boiler has lit. If a photocell is dirty it may not be able to detect the burner flame correctly and can cause the boiler to shut down often randomly. Boilers that frequently switch on and off are less efficient than those constantly running.

• Electrodes can wear and attract soot and deposits. The electrodes produce a spark to light the heating oil. If they are in poor condition the boiler may not light properly which is inefficient, inconvenience and increases the amount of heating oil brunt.

Heating Oil Storage Tank 

Oil storage tanks require maintenance to ensure they are holding and supplying your boiler with filtered usable heating oil. Water has been known to build up in oil storage tanks over time, which can cause frozen pipe work and frozen blocked filters if the temperature gets low enough. It is recommended that water should be extracted from the tank, filter elements should be cleaned and or replaced and fittings and pipework checked for oil leaks. Steel heating oil tanks also require repainting to prevent corrosion. Any sight gauges or contents gauges should be cleaned and checked to ensure they are accurately reporting your tank’s heating oil level. This should also prevent you from running out of fuel unexpectedly.

Servicing the Heating System. What to expect during the engineer’s visit. 

All appliances should be inspected, cleaned and components replaced as required. If your boiler is not serviced annually it is at higher risk of breaking down and costing you more money. Cleaning the boiler enables your engineer to look for tell-tale signs that parts of the boiler may need replacing and an opportunity to inspect the boiler chamber for the condition of the material and welds. Old steel heat exchangers will often leave rust marks, which can give a warning that the boiler will soon need to be replaced. This proactive approach can limit the possibility of water damage occurring and enables replacement work to be planned rather than having the inconvenience of replacing a boiler at short notice when the heat exchanger unexpectedly fails.

Long term damage can also occur if the boiler is not serviced regularly. During the combustion process, deposits will build up on the internal surfaces of the heat exchanger and the baffles which can decrease the boiler efficiency. If left for too long, these deposits can harden and with some designs of heat exchanger render it impossible to remove the baffles without destroying them. A replacement baffle will come at a significant cost on top of the routine service charge.

Carbon Monoxide! 

As with any fossil fuel burning appliance, poor or inadequate servicing can cause the production of carbon monoxide. So it is absolutely vital that your oil boiler is checked and serviced at least annually. Carbon monoxide is a highly toxic poisonous gas. It is odourless, colourless and tasteless and therefor difficult to detect. Some symptoms of carbon monoxide poisoning are:

• Tiredness

• Headaches

• Dizziness

• Nausea

• Vomiting

It is advisable to fit an audible carbon monoxide detector in the same room as the boiler.

Peace of Mind

For safety, peace of mind, to minimise fuel costs and reduce risk of unexpected breakdowns, OFTEC would recommend that oil users contact the services of local OFTEC Registered technicians to service their oil installations at least annually. They can also advise on energy efficiency.

Goff Petroleum recommend Anglia Heating Solutions, your local OFTEC registered company for installation, servicing, and maintenance, of oil fired boilers, and for safe, cost effective tank replacement. We would like to thank the engineers from Anglia Heating Solutions for their help in producing this information sheet.

You can also find a list of Registered Technicians on the OFTEC website and locate your nearest registered technician.

who support families and care for children and young people with life-threatening conditions across Cambridgeshire, Essex, Norfolk and Suffolk.

We'll be holding more draws through 2021 so keep your eyes peeled for announcements on Facebook and Twitter and if you have not registered your good cause yet then visit our Good Causes Page.

Oil Market, Exchange Rate and Heating Oil Price Information November 2020.

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $36.54                Price at End of Month: $46.35

Highest Price in Month: $47.06                Lowest Price in Month: $36.54

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.2910                              End of Month: 1.3350

Kerosene (Heating Oil) Cargo Price $ per tonne       

Start of Month: $309.00                                           End of Month: $401.00

Highest Price in Month: $406.00                            Lowest Price in Month: $309.00

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 4.90 ppl

Market Commentary:

It’s a month of market moves driven by the US Election, a potential vaccine and the debate over the short-term supply and long term future of oil.

Oil Prices Surge 10% On COVID Vaccine Hope

Oil prices soared by 10 percent and WTI Crude topped $40 a barrel on Monday morning, after vaccine developers announced 90-percent efficacy of a COVID-19 vaccine candidate, instilling hopes on the markets that life could soon return to normal. 

As of 9:38 a.m. ET, WTI Crude prices were surging by 10.37% at $40.92 and Brent Crude was soaring by 9.02% on the day, at $43.01.

Oil jumped and followed other markets globally on Monday after Pfizer and BioNTech said that their mRNA-based vaccine candidate, BNT162b2, against SARS-CoV-2 demonstrated evidence of efficacy against COVID-19 in participants without prior evidence of SARS-CoV-2 infection.

The vaccine candidate was found to be more than 90% effective in preventing COVID-19 in participants without evidence of prior SARS-CoV-2 infection in the first interim efficacy analysis, the companies said. Pfizer and BioNTech plan to file for Emergency Use Authorization (EUA) to the U.S. Food and Drug Administration (FDA) soon after the required safety milestone is achieved, which is currently expected to occur in the third week of November.

After months of setbacks on vaccine development by pharmaceutical companies, the markets, including the oil market, cheered the news of the effective vaccine candidate, hoping that a vaccine could soon allow a return to pre-coronavirus way of life and travel.

Oil prices were also supported by a weakening U.S. dollar and Joe Biden’s victory in the U.S. election this weekend, which boosted appetite for riskier assets and removed the election uncertainty from the market.

Saudi Arabia also jawboned oil prices higher earlier on Monday as Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman, said that the current deal could be tweaked, in the clearest signal that OPEC+ is seriously considering such a move.

“I would go and argue it could be a tweak even beyond what the so-called analysts are talking about,” Prince Abdulaziz bin Salman told the ADIPEC conference, as carried by Reuters. 

By Tsvetana Paraskova for Oilprice.com 9th Nov 2020

Vitol CEO: Oil Prices Could Hit $50 In Near Future

Oil may hit $50 over the next few months thanks to a moderate decline in global inventories that will accelerate by mid-2021, the chief executive of Vitol, Russell Hardy said as quoted by Reuters.

Oil prices have trended higher this week after Pfizer announced its vaccine candidate for Covid-19 had shown a 90-percent efficacy rate during late-stage trials. However, the sample of study participants the company looked at for this rate of efficacy is quite limited, at 92, to draw any major conclusions.

Still, the immediate and strong reaction of oil prices to the news shows just how important positive news about the pandemic has become amid surging cases, lockdowns, and a rising death toll.

Crude oil benchmarks added as much as 10 percent following the Pfizer news. Oil prices were also supported by a weakening U.S. dollar and Joe Biden’s victory in the U.S. election this weekend, which boosted the appetite for riskier assets and removed the election uncertainty from the market.

Further support for prices yesterday come from the Energy Minister of Saudi Arabia, Abdulaziz bin Salman, who said the OPEC+ production cut deal could be “tweaked”.

“We did tweak and I believe with consultation with our friends, some of them are present here and some of them are not, but I know how heartily they are committed to the principle of tweaking,” bin Salman said at the ADIPEC conference on Monday.

“I would go and argue it could be a tweak even beyond what the so-called analysts are talking about,” he added.

Vitol’s Hardy’s remarks come after earlier this month he said he expected the second wave of Covid-19 infections to remove about half a million bpd in oil demand in Europe. Hardy said at the time he expected global demand to average some 96 million bpd during the winter.

By Irina Slav for Oilprice.com 10th Nov 2020

An Oil Market Recovery Is On The Horizon

The major participants at ADIPEC 2020’s ADNOC Trading Forum expressed a wide range of sentiment, but the general message was one of caution or even outright pessimism when it came to oil price movements. The Virtual Conference, which was held in Abu Dhabi, was dominated by three main topics, the impact of COVID-19, global oil and gas demand destruction, and the U.S. election results. With a wide range of speakers including representatives from Abu Dhabi’s national oil company ADNOC, the major storage company VITOL, Japanese company ENEOS, Abu Dhabi Global Markets (ADGM), and OMV amongst others, the forecasts for 2021 were plentiful and varied. The main takeaways for observers were that markets may be growing increasingly optimistic about a COVID recovery, but oil prices are unlikely to see a real recovery before the end of 2021. Oil market fundamentals are very weak at the moment and even if a COVID-19 vaccine is produced, the impact on fundamentals will be slow. Furthermore, any oil market recovery could easily be halted by a change in the strategy of OPEC+ or any other supply increase before demand picks back up. According to Energy Intelligence, Platts and Argus, the overall expectation for oil prices in 2021 is in the high $30s to mid $40s per barrel. In a panel with Martin Fraenkel, Euan Craik, and Alex Schindelar, all three industry leaders agreed that they expected a more optimistic situation in 2022. The three oil analysts emphasized that much will depend on the success of tackling COVID globally and the resilience of the market in the face of a possible supply boost.

Russel Hardy, the CEO of Vitol, argued that 2020 has shown how resilient the hydrocarbon sector still is. Despite the major breakdown of demand due to the COVID-19 pandemic, Hardy claimed that Vitol has been able to ride out the storm and is fully prepared for 2021. While a combination of negative prices, demand destruction, and a storage glut means that a return to normal is still a long way away, an industry recovery is well and truly underway. Kajo Fujiwara, the Executive Officer of Crude Trading and Shipping for Japanese company ENEOS emphasized that “work continued even in COVID time”. He said that was particularly difficult as a state of emergency had been put in place in Japan as its refineries were forced to cut, exports decreased and margins were very low. The company’s investment plans were also altered as several projects were delayed. In H2, however, ENEOS saw refinery runs increase and signs of demand recovering. 

When asked about ADNOC Trading, Khaled Salmeen, the Executive Director, stated that the company “has  not stopped doing what we wanted to do….we wanted to go strong on trading and we are as ADNOC Global Trading is going to go live in the coming weeks”. When asked about the impact of COVID on trading, Salmeen stated that for his company it had been an opportunity, as working on risk management and pricing has allowed the company to become more resilient. ADNOC Trading is developing well, with the crude book having gone live in September and the products book via Global Trading set to go live in the coming weeks. ADNOC is now starting to train and support the next generation of traders in the UAE. An ADNOC Trading official added that ADNOC Trading plans to set up representation internationally, including in the U.S. As well as trading, Salmeen confirmed that ADNOC Trading is also looking at entering the shipping space. ADNOC has always been an FOB seller. Shipping is now going to be a major part of the company. The cost of both second hand and new vessels in the current climate is extremely attractive for those with capital.

Overall it was a mixed takeaway from the event. COVID is once again hovering over markets with a second round of lockdowns in the EU, and price volatility has increased. For some, such as Hardy, real optimism could return to markets in H1 2021. There doesn’t seem to be any significant demand increase set to take place in winter and even if a COVID vaccine is produced, the real impact won’t be felt in the market before end H2 2021. At the same time, all participants agreed that the OPEC+ strategy is one of the major factors to watch. Vitol expects normal stock levels by Summer 2021, but even that will depend on OPEC+ strategies. New additional production, such as from Libya or Iran, could set markets back. A return to normal stock levels would see prices rising at the end of 2021. Hardy is cautiously optimistic but admits that it all depends on a continuous flow of “good news”.  The Vitol official expects oil prices to recover to the high 40s or even the 50s in H1 2021, although any demand reduction would hurt that prediction.

When asked about Biden, Hardy said that any U.S. supply response would be price related. He stated that if Biden rejoins JCPOA and Iranian oil flows again, prices will be hit hard. He doesn’t expect the Biden Administration to have much of an impact on U.S. shale production though. While new regulations would impact production by increasing overall costs, the sector itself is largely non-political.

Even the oil and gas situation in Asia remains unclear. According to ENEOS’ Kajo, the COVID impact is still very much being felt. While the economies have suffered less than their western country parts, the impact on demand is still tangible. She said that China’s demand is healthy, but other countries such as Japan and India are still suffering. In Japan, refining margins are still suffering as JET demand is very low, and export markets are yet to recover. When asked about a possible Peak Oil demand scenario in Japan, the ENEOS official said that COVID has moved it forward dramatically.

By Cyril Widdershoven for Oilprice.com 10th Nov 2020

Why A COVID Vaccine Won’t Invigorate The Oil Market

For those who have been transfixed on oil demand forecasts over the last eight months, the recent news that Pfizer’s Covid-19 vaccine is 92% successful likely came with a renewed hope that oil demand will finally tick up and bring the industry out of the doldrums in which it has been languishing since the start of the pandemic.

The lockdowns are to blame for the loss in oil demand. And now, invigorated with the possibility that this new vaccine will allow people to resume their normal way of life - air travel, dining out, and shopping - the price of crude oil is rising.

They are expecting oil demand to recover - and fast - and not even the news of a slew of additional lockdowns that go into effect this week is dampening the bullish oil spirit.

Hold Onto Your Bulls

The reality is, however, Pfizer’s vaccine - which hasn’t yet received FDA approval - won’t be available to the masses for months. Oil bulls may want to strap that truth on.

And while it certainly looks promising, the vaccine needs to undergo a rather rigorous approval process, and it is by no means a sure thing. If it were a sure thing, they’d skip the approval process and move forward.

What to Expect

That’s not to say that things aren’t looking promising in the longer term. But we are most definitely talking about the longer term.

In the short term, we have a new round of lockdowns sweeping the globe that includes Sweden, New Jersey, and New York - all of which have varying degrees of restrictions on activities. Most of those restrictions involve eating out and going to bars. Some include more restrictions on private gatherings.

These most recent restrictions on our way of life are just the latest. Last week, Austria, France, Germany, the UK, and Portugal all began implementing a wide variety of restrictions that will no doubt compound the oil demand problem.

And while a vaccine is looking likely, things may not move as quickly as some are expecting. Below is a rough timetable of how the vaccine is expected to progress.

1) Safety

With efficacy now established, Pfizer must next establish safety, which comes after two months of tracking. This is to establish the likelihood of side effects. That two-month marker will come on November 16.

2) Emergency Use

Next, Pfizer must apply for emergency use authorization from the FDA. This allows Pfizer to skip over some of its study that is required for traditional approval. This isn’t typically a fast process. The FDA will deliberate in a public meeting to determine if the emergency use will be granted. It is very likely that this emergency use will only be granted for high-risk individuals such as those with co-morbidities and perhaps healthcare workers. There is no estimate, really, on how long this will take. The FDA has merely said that it plans to be quick.

3) Emergency Use Rollout

The good news is, Pfizer has already started to manufacture its Covid-19 vaccine, banking on an approval. This saves a lot of time. However, there are still limited quantities available during this stage, and the emergency use authorization does not cover everyone. Therefore, the initial rollout of the vaccine will be to a small number of people, who will then be tracked to ensure there are no other side effects that emerge.

4) The First 25 Million People

Pfizer has stated that by the end of the year, it will have 50 million doses available. It will likely start trickling in at the end of November or the beginning of December. That 50-million figure is good for 25 million people because each person must receive two doses. Whether this 25 million is used up in the emergency use portion of the process or whether some of it is left over for the full rollout is unknown. But either way, at most, 25 million people—worldwide—will receive the vaccine in 2020. At less than 0.3% of the world’s population, this isn’t going to make even the smallest dent in activity levels and hence, oil demand.

5) The next 1.3 billion doses

That brings us to 2021 when Pfizer expects to have 1.3 billion doses available, which means that 650 million additional people will be able to get vaccinated next year. Of course, this does not factor in other vaccine manufacturers such as Moderna, which announced on Wednesday that it was ready to begin analyzing interim data it amassed during its study, although we’re talking about just 53 cases. Other countries, too, may produce a viable vaccine. The U.S., the UK, Canada, Japan, and other European countries have already put their order in for millions of doses from Pfizer. In fact, just this week, it was revealed that the EU made a deal to purchase 300 million doses—for less than the U.S. will pay. This also means that those 650 million people will be spread across the globe—and across 2021—negating the possibility that any single location would be able to return to normal.

Many people likely heard Dr. Fauci say that the rest of the world may have the vaccine in April. But he’s referring to when the vaccine would start to be available to everybody, not that everyone would have it available. In fact, Dr. Fauci has said that it might take well into the second or third quarter of 2021 to even convince people to take it.

In other words, everyone should buckle up because oil demand isn’t going to snap back in January or even in Q1.

When Will Oil Demand Perk Up?

If you’re listening to Reuters market analyst John Kemp, we won’t see oil demand pick up for another six or even twelve months.

“Coronavirus vaccines are expected to boost international passenger transportation and oil consumption, but the first significant impact will not be felt until well into the second half of 2021, based on futures price movements on Monday,” Kemp said in a commentary on Monday.

This view is likely shared by OPEC, which released its MOMR on Wednesday. In it, OPEC forecast that oil demand will fall this year 300,000 bpd more than it thought last month. OPEC also said that this weak demand would continue into next year. Cutting next year’s demand outlook as well, OPEC now sees 2021 oil demand 300,000 bpd lower than it thought last month. This means it sees 2021 oil demand at just 6.2 million bpd over 2020 levels, and still under 2019 levels.

Why So Glum?

“These downward revisions mainly take into account downward adjustments to the economic outlook in OECD economies due to COVID-19 containment measures, with the accompanying adverse impacts on transportation and industrial fuel demand through mid-2021,” OPEC said in its MOMR, adding that the oil demand recovery “will be severely hampered and sluggishness in transportation and industrial fuel demand is now assumed to last until mid-2021.”

Regarding a Covid-19 vaccine, OPEC had few words. “Further support, currently unaccounted for, may come from an effective and widely distributable vaccine as soon as 1H21. However, further downside risks to the current growth outlook may stem from ongoing challenges due to Brexit, rising geopolitical challenges in selective regions, unexpected repercussions from quickly rising global debt levels, and mounting social unrest in some countries as a consequence of COVID-19 and rising inequality.”

In other words, OPEC at least believes that the vaccine may help to boost oil demand at some point in 2021, but there are a whole host of other challenges that may dent the economy - and therefore oil demand - next year.

What Say the IEA?

The IEA on Thursday released its own vaccine-oil-demand bombshell, saying that oil demand is unlikely to see any substantial increase from a new vaccine - even one that starts to be distributed in a limited capacity at the end of this month - until well into 2021.

“It is far too early to know how and when vaccines will allow normal life to resume. For now, our forecasts do not anticipate a significant impact in the first half of 2021,” the IEA said, adding that “The poor outlook for demand and rising production in some countries ... suggest that the current fundamentals are too weak to offer firm support to prices.”

And while the market largely ignored OPEC’s pessimistic view of the vaccine’s effect on oil demand, the IEA’s prognostication did not go unnoticed; in the early morning hours on Thursday, oil prices started to sink.

By Julianne Geiger for Oilprice.com 12th Nov 2020

Why The Vaccine Oil Rally Won't Last

Oil is on the rise after a third company developing a vaccine for Covid-19 announced positive efficacy results this week. They may well continue to rise for a while, but it would pay to be careful with betting on an endless rally. Yesterday, after AstraZeneca said its vaccine candidate had 90% efficacy in some cases, oil benchmarks jumped to the highest in three months as traders rushed to build their positions ahead of the rebound that should logically follow a successful vaccination campaign.

Fund managers also went on a buying spree, Reuters’s John Kemp said in his weekly column. The total purchases made in the most traded crude oil and product contracts over the last two weeks reached 539 million barrels, Kemp noted, which was the highest since the start of September.

The buying spree is not limited to oil, either, and analysts are taking note. The Bank of America last Friday said traders have swarmed into riskier assets after the two vaccine updates from Moderna and Pfizer, pouring $27 billion in to equity funds and shares in the industries that were worst affected by the pandemic, including energy, banking, and travel.

But the bank cautioned against too much optimism: “We say credit and equity prices (are) to peak in coming months on peak positioning, peak policy, peak profits as optimism tops ahead of vaccine distribution,” the analysts told BofA clients.

Indeed, the higher oil—and stock—prices rise on this vaccine-prompted bullishness, the more vulnerable they become to a correction. Reuters’ Kemp noted this in his column, and bank analysts have warned about it in notes to clients.

The problem seems to be that traders are buying the vaccine efficacy news, but efficacy—and safety—is only the beginning. Swift distribution is another major aspect of a vaccine’s success, and the scale of vaccinations is another. The process, which the head of the U.S. federal government’s vaccination program said could begin in early December, would take at least several months until vaccinations are mass enough to make a difference to the so-called new normal.

In other words, it will be at least several months before oil demand picks up in a way that would be meaningful for prices over a period longer than 24 hours. That is, of course, if there are no serious side effects from the approved vaccines that could wreak a whole new kind of havoc on oil—and other—markets.

Meanwhile, OPEC+ is contributing to the bullish sentiment by signaling it would extend its current rate of production cuts into 2021, although it remains to be decided how long the extension will be. The cartel is meeting next Monday and Tuesday to discuss the issue.

News from China is also supporting prices this week: Bloomberg reported the country has started drawing down its oil inventories as domestic demand picks up and imports decline because independent refiners have used up most of their import quotas. China’s inventories were a cause for concern among oil traders when they were running near capacity, so the news of a drawdown has been welcome.

Right now, the going is good for oil. Pharma companies are bound to continue providing updates, and these are more likely than not to be positive. The rally could last a week or two if OPEC+ decides on an extension of more than three months. But it will likely come to an end when traders get a reality check, which is bound to happen. Air travel will not return to pre-pandemic levels overnight. It won’t return to normal over a fortnight, either. It will take months.

The sooner market players accept this fact, the less likely a major oil price slump caused by spooked traders would be.

By Irina Slav for Oilprice.com 20th Nov 2020

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

Lessons have been learnt from 'The Beast from the East' in 2018 and we have been working since then with local farmers, in the communities we serve, to ensure depots stay open and fuel flows through to you.

So please be assured that come rain or snow, Goff are ready to keep you stocked up this winter.

The minimum delivery from a bulk distribution tanker is 500L, but some of our customers do not need, or do not have the ability to receive or store this quantity. To respond to these customer needs, Goff Petroleum has developed Goff Bespoke, an agile heating oil delivery solution for special conditions.

Do you need oil in a hurry, or have you run out? 

Do you have issues that prevent a large tanker from delivering? 

Are you moving soon and need a little to get you through? 

Are you replacing or moving your tank and need to keep going till then?

Goff Bespoke offer agile solutions for special situations.

Will Goff said:

"It's important to us that we offer the best and most agile customer service to our heating oil customers. To help us do this we've looked at how we can transfer our existing expertise in bulk tanker deliveries to some different domestic challenges.

My team have identified a way of using different vehicles and fuel handling methods to make smaller deliveries in response to these special domestic customer challenges."

In NR postcodes Goff Bespoke can deliver 205 litres of Kerosene within 24 hours every working day, same day if ordered before 1pm, for only £199.99 inc vat.

Call 01953 713555 now

to arrange a Goff Bespoke Heating Oil Delivery

Will Goff explained 

"One of our team highlighted to me the challenges that the Royal British Legion were having in fundraising this year. The restrictions and vulnerability of individuals meant that there was no way the usual street collections could be done safely.

We thought we could help spread awareness of the continued importance of Remembrance Day and the work the Royal British Legion carries out by holding a fundraising day with us making a donation for each order taken."

_{"Thanks so much to our fantastic customers for getting behind this fundraiser and with your support we were delighted to be able to donate £782."}

Due to the current Covid Lockdown restrictions Ann Rogerson from the Wymondham branch of The Royal British Legion was not able to collect the cheque in person. When we shared our target smashing success with her on the phone she was as pleased as we were.  

"2020 and the challenges we have faced this year have been tough for all those who need to raise charitable funds. Our Poppy Appeal was very different this year with no street collections or boxes in shops. Goff Petroleum’s fundraising endeavours are really appreciated by all those at the Royal British Legion."

The Goff Team have been really pleased to help this year and would like to thank you, our fantastic customers, for getting behind this fundraiser. We hope that 2021 will be better for everyone.

You can find out more and donate directly to the The Royal British Legion here. 

_{“Every poppy makes a difference to the lives of our Armed Forces community”}

The fuel storage capacity of the site has been expanded by more than 100%, facilities have been improved and along with the addition of more modern tankers will allow us to meet the increased demand for heating oil from rural households and commercial fuels for farms and businesses in Kent, East Sussex and beyond.

Will Goff, Managing Director of Goff Petroleum, explained

We are extremely proud of what we have achieved since expanding our heating oil distribution operation into Kent nearly two decades ago. We’ve listened to our existing customers and are always keen to reach new ones in homes and businesses across the South East, which is why we’ve invested heavily in our Tenterden depot.

The site always offered excellent support for the local areas it served but has undergone a real transformation since the start of the project. By replacing tanks, facilities and tankers we have brought in more capacity, improved technology and an even safer working environment for our team.

A reliable supply of heating oil for homes and commercial fuels for farms and business are key to keeping our domestic customers warm and commercial enterprises working. We’re committed to serving the local area in the long term with tailored solutions to meet their individual needs.

The completion of this substantial investment project in the site will help us to offer more customers a cost effective, efficient and dependable service even in hardest-to-reach places throughout the South East

You can request a quote online or call our friendly sales team on 01953 713555

We are pleased to announce our October 2020 Village Hall Good Causes draw winner. Well done to:

Shelfanger Village Hall 

They have won 500 litres of heating oil and they join the list of Village Hall Good Causes Winners including:

Gayton near Kings Lynn, Tendring in Essex and Bunwell in Norfolk.

If you wish to find out more about Goff Heating Oil supporting Good Causes or enter your village hall for a future draw you can do so here.

We'll be holding more draws so keep your eyes peeled for announcements on Facebook and Twitter. 

Oil Market, Exchange Rate and Heating Oil Price Information October 2020.

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $38.85                Price at End of Month: $36.26

Highest Price in Month: $42.02                Lowest Price in Month: $36.26

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.2867                              End of Month: 1.2930

Kerosene (Heating Oil) Cargo Price $ per tonne       

Start of Month: $297.75                                           End of Month: $302.50

Highest Price in Month: $337.75                            Lowest Price in Month: $297.75

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 2.25 ppl

Market Commentary:

A month of relative price stability given the influences of COVID, OPEC + and the US Elections.

Oil Prices Are Unlikely to Collapse Again

by Tsvetana Paraskova on Oilprice.com

Second Pandemic Wave Should Not Crash Oil Prices

by Michael Lynch For Forbes

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

Weather Update:

Our weather watcher has collated the data for October 2020 which in summary shows;

On average the UK temperature in October was 9.4°C which was slightly higher than the average in October 2019 of 9°C but lower than the ten year average for October of 10.07°C.

There was also less sunshine than usual with a total in October 2020 of 66 hours compared to 87.9 hours in October 2019 and a ten year average for October of 91.05 hours.

October 2020 was also wetter than normal with 179.3mm of rain compared to 138.8mm in October 2019.  Total rainfall in October 2020 was well above the ten year average for October of 113.44mm.

Did you know that the official flower of Norfolk is the Poppy and that this was the inspiration for choosing Poppy Red for our delivery tankers over 45 years ago? 

Since then Goff Petroleum has proudly carried Poppy Red on it's lorries, uniforms and logo, inspired by the County where the company started and where it is still based. 

This year as Remembrance Day approaches and the Poppy becomes nationally symbolic, we have extended our Goff Good Causes community support to include The Royal British Legion, who famously use the Poppy as a key part of their fundraising.

The Poppy has long been a national symbol of Remembrance and Hope and this message of Hope seems as poignant today as the world battles with the impact of Covid 19.

To help The Royal British Legion with its fundraising in these difficult times and to enable it to continue its support of our Armed Forces, their community and families; we are pledging to make a donation of £1 for every order placed on Nov 11^th  and aim to raise over £500 with your support. 

_{“Every poppy makes a difference to the lives of our Armed Forces community”}

You can find out more and donate directly to the The Royal British Legion here. 

The entrants in this Good Causes - Village Halls Facebook poll are:

Bale, Chrishall, Debden, Fingringhoe, Hickling Playing Field, Isfield, Offton & Willisham, Shelfanger, Stelling Minnis and West Hoathly

This link will take you through to our Facebook Page where you can click on the discussion tab to open the poll and place your vote.

You can like, share and invite your friends and family to vote and support your local Village Hall, but be quick as voting closes this month.

Good luck to all our Good Causes

Oil Market, Exchange Rate and Heating Oil Price Information September 2020.

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $44.25                Price at End of Month: $40.71

Highest Price in Month: $44.25                Lowest Price in Month: $38.36

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.3448                              End of Month: 1.2928

Kerosene (Heating Oil) Cargo Price $ per tonne       

Start of Month: $337.50                                           End of Month: $316.75

Highest Price in Month: $337.50                            Lowest Price in Month: $291.00

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 2.21 ppl

Market Commentary:

A US focused article from early September but the points are applicable to most other countries and apply within the global oil demand context.

Oil Markets Get A Major Reality Check As Demand Sours

A recovery in jet fuel, gasoline, and crude oil demand is the one thing standing in the way of drawing down the existing inventory glut for crude and crude products. And this glut is the one thing standing in the way of oil prices. While fuel demand started to pick up a couple of months back, that rally has since stalled, leaving some to wonder what is left for the oil industry in the short or even medium term.

The Covid-19 Factor

One of the largest influencers on fuel demand today is the daily number of new coronavirus cases—or rather, the trend of the daily new coronavirus cases. It is a closely watched metric that state officials use to determine what businesses should remain open, what businesses should close, whether kids should learn from home or school, and what quarantine measures should be adopted when it comes to travel. Individuals also watch this metric to determine their comfort level with being out and about.

In the United States, North Dakota, Missouri, Tennessee, Arkansas, and Oklahoma are seeing rising trends in the number of new coronavirus cases daily, with the White House telling Missouri that it should crack down on certain activities, such as closing down bars and placing further restrictions on restaurants.

Vaccine Reality Check

Realistically, demand for fuel is not expected to fully recover until a vaccine is made widely available. While vaccines are in the works and great progress is being made, it is a bit optimistic to think that everyone will be able to get a vaccine by the end of the year or even the end of the first quarter.

No, it will take much longer than that.

Drugmakers are already testing some of the most promising vaccines in the clinical trial phase. These clinical trials will take some time, and even with Operation Warp Speed, a government program that is funding the production of some vaccine candidates in the hopes that the clinical trials will be successful, it will be early next year before even ten million doses will be available.

Millions of doses is a far cry from what will be necessary to inoculate the hundreds of millions of people that live in the United States, especially considering that most vaccines will require two doses, given a month apart. It will likely be the end of 2021 before there are billions of doses available.

But even that won’t be the end of the problem, because that’s not enough doses to get the entire world vaccinated. And that’s not even taking into consideration the large swaths of people that aren’t interested in getting the vaccine at all—more than one-third of Americans say they aren’t interested in getting a vaccine at all. And more aren’t sure.

Meanwhile, the coronavirus will rage on, although likely in smaller numbers. Still, it is expected to affect fuel demand.

Leaving on a Jet Plane

One of the largest factors determining fuel demand is air travel. And air travel is still down by about half compared to the same time last year.

For the last week in August, Flightradar24 showed that commercial flights are still 45% down compared to last August—and the rate of recovery has seemed to slow. Air travel will pick up after the vaccine is rolled out en masse, but this recovery won’t be realized until 2022 due to the timing of the vaccines and when they will be ready for most of the population.

And even that’s not a full recovery. For 2022, air travel is expecting to recover by only 75%, according to Bank of America Securities. By 2023, the recovery is expected to increase to 90%--which still isn’t great considering that’s years away.

Road Travel

Demand for gasoline for road travel increased in June, it’s been pretty much flat ever since, as the states lighten up restrictions and then crack down again, and the virus figures are like a game of whack-a-mole with cases going down in some states while increasing in others.

Schools aren’t open in full swing yet in most of the country. Neither are bars or restaurants and a handful of other critical businesses that encourage people to get out and on the road. Vacation season was muted at best.

This has resulted in U.S. motor gasoline supplied by energy companies—essentially used in place of actual demand figures—falling from 8.933 million bpd at the end of January before the pandemic to 5.065 million bpd in early April at the height of the lockdowns. It swung up to 8.809 million bpd in mid-July, while the market rejoiced at the recovery. However, there has been little improvement since then, with the last week of August, coming in at 8.786 million, according to EIA data.

Compared to the same time last year, gasoline demand is still more than 1 million bpd off, and that demand is no longer on an upward climb.

Goodbye Driving Season

It could tick up in terms of how far off last year’s levels fuel demand sits. But with driving season in the United States behind us with the coming and going of Labor Day weekend, road travel isn’t expected to improve by leaps and bounds over current levels.

What this means for oil companies is tightened lender purse strings, stubbornly high inventories, an extended refinery maintenance season, and ultimately, more bankruptcies—and the industry has already seen its fair share, with 23 bankruptcies filed in the first half of the year.

By Julianne Geiger for Oilprice.com 

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

Goff Heating Oil are proud to aid local charities and good causes by providing them with a chance to win 500 litres of heating oil. With the next prize draw just around the corner, it’s time to support your local village hall or community hub by nominating it to win.

Nominate your Village Hall here

You can also find out more about the Goff Good Causes project and see past winners here.

Here at GOFF we’re still very thankful to all the #keyworkers for their continued efforts during these unprecedented times.

I would like to thank all our suppliers for assisting us in keeping our fleet mobile and delivering, our customers for the kind support they have extended us in the office and on the road, and finally all keyworkers who have made this possible.

Thank you Michael Goff

THANK YOU to everyone, including all our colleagues, who have kept our customers fully fuelled throughout the pandemic.❤️

Oil Market, Exchange Rate and Heating Oil Price Information August 2020.

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $42.95                   Price at End of Month: $48.94

Highest Price in Month: $48.94                   Lowest Price in Month: $42.95

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.3135                                   End of Month: 1.3448

Kerosene (Heating Oil) Cargo Price $ per tonne        

Start of Month: $347.25                                                 End of Month: $337.50

Highest Price in Month: $353.25                                 Lowest Price in Month: $330.00

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 2.11 ppl

Market Commentary:

Oil market treads rebalancing tightrope as demand recovery falters

By S & P Global Platts

Source: S & P Global Platts

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

The cost of heating an average three bedroom home in Great Britain with an oil condensing boiler is only £808 per year. This is going to reduce further as the oil price crash, caused by Covid-19, feeds into the figures.

The latest independent data shows that a 3-bed house with an oil boiler in Great Britain costs £808 a year compared to £938 for gas boiler, £1392 for air source heat pumps with underfloor heating, £1551 for LPG, £1819 for air source heat pump with radiators & £2084 for Electric.

This means Heating Oil is:

• £130 cheaper than Mains Gas
• Nearly half the price of LPG
• A staggering £1276 cheaper than electric storage heaters
• Over 50% cheaper to run than even the cheapest renewable heating option.

And with the Oil Market falling hard in the first 1/4 of 2020 the opportunity exists to halve your heating costs again with prices that have not been seen this century. 

Sutherland Tables are not linked commercially to any supplier of fuel or heating systems and they provide comparative home heating costs for the most common fuels across a range of standard house types throughout the UK and Ireland. 

Sutherland Comparative Domestic Heating Costs Tables have been published regularly since 1976 and have become the most reputable and established source of independent and impartial information on domestic heating costs.

The Tables are complied quarterly and provide figures for heating an individual room using a variety of appliances including open and closed solid fuel appliances, gas and electric heaters, and fixed and portable LPG heaters.

Oil Market, Exchange Rate and Heating Oil Price Information July 2020.

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $42.61                Price at End of Month: $42.95

Highest Price in Month: $44.77                Lowest Price in Month: $42.06

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.2458                              End of Month: 1.3125

Kerosene (Heating Oil) Cargo Price $ per tonne       

Start of Month: $338.00                             End of Month: $342.75

Highest Price in Month: $357.75                            Lowest Price in Month: $336.50

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 2.05 ppl

Market Commentary:

Citigroup: Oil Will Never Return To $100

Crude oil prices are unlikely to return to three-digit levels ever again, Citigroup commodity analysts said in a note, as quoted by Bloomberg.

The idea of oil at $100 or higher, “has far more fantasy than reality at its heart,” the Citi analysts wrote, adding that over the long term, $45 per barrel of Brent was a far more likely oil price scenario than $60 a barrel.

In more pessimistic news, the Citi analysts said, “Oil product demand growth will falter significantly, change its contours and never return to pre-covid-19 rates of growth.”

They are not alone in this view of oil product demand after the pandemic erased close to a third of global oil demand at its height. This demand has yet to recover, and many doubt it will recover fully to pre-pandemic levels.

Meanwhile, there are threats from supply, too. Saudi Arabia appears to have threatened fellow OPEC members that it will start a price war again if they don’t do more to fall within their production quota under the OPEC+ agreement aiming to remove 9.7 million bpd from the global supply until the end of this month.

Even though OPEC’s production last month fell to the lowest in 30 years, this may not be enough to spur a stronger recovery in oil prices. As a result, OPEC delegates told the Wall Street Journal that the cartel’s leader in all but name had told laggards it would open the taps if they didn’t fall in line.

Speaking of supply, Citi’s analysts noted in their forecast that with lower production costs generally, production would begin returning at levels of about $45 a barrel, which further made strong price rises even in the longer term unlikely.

Meanwhile, oil prices are again on the decline despite EIA’s inventory report, which estimated a sizeable drop in crude oil last week. The decline was driven by rekindled fears of a resurgence in Covid-19 cases, especially in the United States.

By Irina Slav on 2nd July 20 for Oilprice.com

Second Wave Of COVID-19 Won’t Crush Oil Prices

OPEC+ agreed on Wednesday to ease its self-imposed production cuts starting next month as the global economy slowly awakens from its deep Covid-19 slumber. The organization has been curtailing output since May by 9.7 million barrels per day, or ~10% of global supply, following a demand meltdown due to widespread lockdown but now plans to taper the cuts to just 7.7 million bpd until December. The oil markets are reacting negatively to the cartel’s latest move, with WTI price down 1.24% to $40.70/barrel at 7am CST on Thursday, while Brent crude has dipped 0.75% to trade at $43.46/barrel.

While these moves could be interpreted as normal market gyrations, they could also suggest that the market is concerned about this potential: OPEC+ may have rushed to lift the curbs especially with Covid-19 cases spiking again in the pivotal U.S. market.

How All 50 States Are Reopening (and Closing Again)--updated July 15

Source: The New York Times

Defeating the second wave

There are fears that the rollbacks could trigger another price slump if economies start to shut down again and demand nosedives.

Indeed, OPEC+ itself has acknowledged that rebalancing the markets again could be a tough call if a second wave of Covid-19 infections strikes.

The bad news: No less than 10 states in the United States, particularly states straddling the Sun Belt of Florida, Texas and Arizona have been forced to reverse course by closing certain counties or sectors statewide after recording a resurgence in cases just weeks after reopening. 

New infections across the country have been clocking in at ~60,000 a day, about double the rate recorded in April, and could exceed 100,000 a day as Anthony S. Fauci, the nation’s top infectious-diseases expert, had earlier warned. Active Covid-19 cases in the country have now surpassed 3.5 million with nearly 140,000 deaths.

There are fears that a similar trend could emerge in other large oil consumers such as India and Brazil. However, there are a couple of reasons why oil prices are not likely to crater to the levels they did in April.

First off, the initial health crisis appears  to be under a reasonable level of control in many countries, with China providing a blueprint for dealing with the so-called second wave of infections. China, one of the early epicenters of the crisis, appears to have quickly brought its second wave of Covid-19 under control by adopting the same measures that various U.S. states are adopting i.e. vigorous testing and re-imposing strict lockdown in areas or sectors where cases are spiking. In fact, some have argued that there is no second wave in the U.S. and the country is simply experiencing a continuation of the first wave.

Source: The Conversation

Second, the world now has a much better idea of how to deal with Covid-19 than it did four months ago, not to mention that biopharma companies such as Moderna Inc. (NASDAQ:MRNA) appear to be making serious inroads as far as finding a Covid-19 cure is concerned. 

MRNA stock has been on a tear after a study in the New England Journal of Medicine says the company's mRNA-1273 experimental vaccine for COVID-19 produced antibodies to the coronavirus in all 45 patients tested in an ongoing phase 1 trial. The neutralizing antibody levels produced in the test group were equivalent to the upper half of those seen in people who have become infected with the virus and recovered with mRNA-1273 generally safe and well-tolerated. 

Phase 2 data is expected sometime in August or September. Though still far from a done deal, the fact that 100% of the patients developed antibodies raises the odds for a successful outcome.

The markets tend to react positively to this kind of news.

Sticking to the rules

When OPEC+ first announced plans to cut production by an unprecedented 9.7 million barrels per day, there were widespread doubts whether members would comply. Those fears played out during the first month of the cuts when compliance clocked in at ~74%.

But with those first round of cuts having worked to stabilize the markets, OPEC+ members now appear a lot more serious about sticking to their commitments. 

During their latest meeting, Saudi Arabian Energy Minister Prince Abdulaziz bin Salman noted that only about 1.15 million b/d of production will be added to June’s production, or 43% less than the 2 million b/d headline figure, after countries that exceeded their May and June quotas by a combined 840, 000 b/d agreed to compensate during the current quarter.

With global oil demand still ~10% below pre-crisis levels and refiner margins still weak, OPEC+ will not be too eager for a repeat of the April fiasco.

Further, U.S. producers have also cut production sharply, with domestic crude supplies falling by 7.5M barrels for the week ending July 10 for an average decline of 2.1M barrels. The American Petroleum Institute(API) reported a large draw of 8.3 M barrels for the week ending July 10 with the Energy Information Administration(EIA) expected to show crude inventories fell by 2.1M barrels over the period. 

A lot could still happen between now and November 30 when OPEC+ has its next full meeting. But so far, it appears that oil producers have learned their lessons the hard way and will not be too keen to engage in a fight with market fundamentals any time soon.

By Alex Kimani - Jul 16, 2020 for Oilprice.com

Will Oil Demand Ever Reach Pre-Pandemic Levels?

The latest predictions from Citigroup paint a dire picture for the global energy industry, with analysts warning demand for refined oil may never recover to pre-pandemic levels. According to experts at the American multinational investment bank, the demand slump triggered by the coronavirus outbreak will have a devastating impact on worldwide consumption.

“Oil product demand growth will falter significantly, change its contours and never return to pre-covid-19 rates of growth,” reads the report issued by Citigroup.

Travel restrictions set to drive demand slump

With many experts warning international travel could be off the cards until 2023, demand for jet fuel is set to tumble. The COVID-19 pandemic has also forced companies to reassess the need for employee travel, instead resorting to digital meetings using platforms such as Skype and Zoom.

International travel isn’t the only industry set to take a hit, with domestic travel also limited in the face of local restrictions and lockdowns. The United States is currently bracing for a surge in COVID-19 cases following July 4 celebrations, with Melbourne also forced back into lockdown for six weeks in response to high levels of community transmission. In the report issued by Citigroup, analysts say situations such as these are just some of the powerful forces at play that will prevent oil demand from reaching pre-pandemic levels.

Citigroup says triple-figure oil a “fantasy”

The report comes in the wake of a warning issued by Royal Dutch Shell predicting a significant decrease in the value of its assets. While analysts had hoped oil could recover to at least US$60 a barrel, Citigroup says US$45 is a more realistic price point. Referring to hopes oil will rebound to the US$100 per barrel mark, Citigroup says this prediction “has far more fantasy than reality at its heart.”

In April, the World Oil Market report released by the International Energy Agency (IEA) warned oil demand was down by 29%. By the end of 2020, the IEA predicts a 9% year-on-year decrease. As well as a sharp decrease in demand, experts warn supply issues could emerge. Tensions are mounting between Saudi Arabia and fellow OPEC members, with the Kingdom threatening a price war if production quotas outlined by the OPEC+ agreement aren’t met. While total OPEC production recently slumped to the lowest levels seen in 30 years, there are fears wiping 9.7 million bpd off the market won’t be enough to coax oil back to US$65 a barrel levels, let along triple figures.

Oil Market Recovery Threatened By Weaker Fuel Demand

Gasoline demand appears to be weakening in some parts of the United States, as the coronavirus continues to spread. The states hardest hit by the surging number of infections are also some of the largest, with tens of millions of drivers.  Much of the country continues to see a slight uptick in gasoline consumption. But in Arizona, Texas and Florida, where the coronavirus is raging, a growing number of people are staying home. Cases are rising in more than 30 states.

Gasoline demand in the U.S. climbed back to 8.6 million barrels per day (mb/d) for the week ending on June 19, up from a low of 5 mb/d in early April. But demand slipped a bit by the end of June as the virus began to spread at a faster clip. On Wednesday, the EIA reported another increase in demand, although the report was offset by a rise in crude inventories, and the slightly muddying caveat that it was a holiday weekend. Gasoline demand is still roughly 1 mb/d below last year’s levels.

In other parts of the world, economies continue to rebound. Germany’s industrial activity picked up pace in June, as did manufacturing activity in China. Strict lockdowns in prior months helped dramatically lower the number of daily infections, and some economies have largely reopened.

But many parts of the U.S. have tried to return to “normal” without ever really getting the virus under control. “[T]oo much optimism at this stage could be premature with total cases in the US, particularly Texas and Florida, surpassing the 3 million mark yesterday, whereas active cases are nearing 1.6 million,” JBC Energy wrote in a note on Tuesday.

The virus also continues to spread in India and Brazil, among other parts of the world. “With global active cases globally slightly less than 4.5 million and showing no sign of a slowdown, we are increasingly seeing downside risk to our total product (particularly gasoline) demand forecast,” JBC added.

A day earlier, the energy firm cut its forecast for U.S. gasoline demand, calling the recovery “increasingly questionable.” Draconian lockdowns were unlikely, as there is almost no political appetite for strict stay-at-home orders, but nevertheless, the spread of the virus will take a toll as governments implement some restrictions and people voluntarily stay home. “[W]e expect demand declines to strengthen moderately through July,” with demand down by 350,000 bpd relative to a prior base case, JBC said.

Others saw a similar negative turn. Standard Chartered said that current crude oil prices “contain a lot of optimism.”

To be sure, the sharp decline in oil production has tightened up the market. Instead of supply and demand balancing at 100 mb/d, the market is now “balanced” at a level that is 10 percent smaller. In fact, demand could average around 89 mb/d in July, with supply at only 88 mb/d. The oil market has now reached a new “balance at the bottom,” according to Rystad Energy.

But even if the oil market is technically in a deficit, there is still a massive inventory overhang and the threat of another downturn because of the virus. “[W]e think normalisation is going take a long time, and the current drift down in demand data and a renewed drift down in demand forecasts will make that process even longer,” Standard Chartered analysts wrote in a note.

The inventory overhang would last until 2022, the bank added, but that really hinges on OPEC+ sticking with the production cuts until then.

The EIA put out its latest Short-Term Energy Outlook, in which it revised up its estimate for gasoline demand. It now sees 2020 gasoline consumption declining by 2.1 mb/d relative to 2019 levels, a slight improvement from June’s estimate of demand being down 2.3 mb/d.

But that sunnier outlook is at risk if the U.S. suffers another downturn.

“If crude stocks are growing now, while restrictions are loose, traders worry about what will happen to demand in the case serious lockdowns come back again. Stocks are already at quite high levels,” Louise Dickson, oil market analyst at Rystad Energy, said in a statement.

By Nick Cunningham of Oilprice.com

Oil Holds At 4-Month High Despite Jump In COVID-19 Cases

Oil prices jumped to a four-month high on Tuesday, rallying on hopes of economic stimulus. However, the uncontrolled spread of the coronavirus in the U.S. puts something of a ceiling on prices for the time being.

After several days of tough negotiations, the European Union agreed to a 750-billion-euro stimulus package, in a historic vote of confidence in the European project. For the first time, European countries will sell bonds collectively rather than on an individual basis, and funnel the proceeds to hard-hit countries, particularly in Southern Europe.

Meanwhile, in the U.S., Congress is set to begin negotiations on another massive stimulus package. The details remain subject to intense negotiations, but there is a broad consensus that both political parties want to pass another trillion-dollar package.

The oil markets welcomed the news, pushing up crude prices to the highest levels since March. Adding to the optimism was positive news on the vaccine front. A potential coronavirus vaccine developed by Oxford University and AstraZeneca demonstrated an immune response. Markets continue to price in optimism on vaccine progress.

Prices would be even higher if not the for the worsening spread of the of the coronavirus. The oil market fundamentals are increasingly bullish. “The global crude market is in deficit to the tune of 3.2 million bpd in July, and even with a tapering of OPEC+ cuts in August, will remain in deficit in August and September too of around 2.5 million bpd,” Bjornar Tonhaugen, head of oil markets at Rystad Energy, said in a statement.

“So the threat of a second wave of lockdowns is holding oil price gains back. An outright second wave of lockdowns will send oil prices lower,” Tonhaugen added.

U.S. gasoline demand is showing signs of weakening. In the week ending on July 10, demand dipped from the week before. Other data suggests the downward trend is more than a one-off: Florida, Texas and California, among a long list of other states, continue to suffer from a huge number of infections.

The U.S. is not alone. India now ranks third globally in cumulative infections. The latest data from India shows an 18 percent decline in diesel demand in the first half of July compared to the same period in June, according to JBC Energy. Roughly 30 percent of the country is in lockdown, affecting more than 400 million people.

“The key question now is how much longer governments will wait before implementing new lockdown measures, and just how strict these will be,” JBC Energy said in another note. “The US is also approaching the turning point where individual states will have to decide how much economic pain they are willing to take in order to slow the spread of the virus.”

But there are other reasons why even Covid-19 related concerns may not lead to a horrific downward spiral for oil prices. The U.S. shale industry is showing no signs of bouncing back, despite the fact that prices have firmed up at $40. The rig count meltdown has slowed to a trickle, but drillers have no appetite to throw more rigs back into the field. Even in the EIA’s assessment, which typically tends to be optimistic on production, U.S. output will continue to erode until the second quarter of 2021.

At the same time, OPEC+ has hung together, improving compliance with the production cuts even as they move to add supply back onto the market. The cohesion bodes well for the group sticking with the plan in the months ahead, rather then returning to some sort of a price war.

By Nick Cunningham - Jul 22, 2020 for Oilprice.com

Why Oil Remains Stuck At $40

Oil prices posted gains once again on Wednesday on the back of bullish data from the EIA, but analysts are warning that plenty of downside risks remain.  The EIA reported a huge drawdown in crude inventories on Wednesday, with a drop of 10.6 million barrels. That was enough to lift crude prices.

But several analysts argued this week that the bigger picture is murkier, with economic and pandemic-related risks looming. “While upwards momentum has stalled over the past month, we still think prices are overdue a downwards correction to reflect the flattening of oil demand recovery and the darkening of economic prospects,” Standard Chartered analysts wrote in a note. The investment bank added that “consensus views” on the oil market balances in the second half of the year have “weakened significantly over the past month.”

“We now only rarely hear talk of V-shaped demand recoveries and extremely tight markets, the views that allowed Brent to rally beyond USD 40/bbl,” Standard Chartered said. “Instead the main talk among traders seems to have shifted to precisely how much demand will disappoint and how long will it take to normalise inventories.”

That assessment stands in stark contrast to the behavior of crude prices in the last six weeks. Volatility has vanished, with WTI remaining rooted at about $40 per barrel, and Brent a few dollars more. Prices have been stuck at those levels even as the optimism surrounding economic re-openings has dissipated. The only sign of a more pessimistic outlook creeping into oil markets is the shift from backwardation towards contango. As Standard Chartered pointed out, the discount for front-month Brent contracts relative to fourth-month Brent contracts has widened over the course of July.

“In our view, Brent above USD 40/bbl seems increasingly discordant with the flow of news regarding the coronavirus pandemic and the outlook for the global economy, and particularly jars with increasingly bearish oil market fundamentals,” Standard Chartered analyst concluded.

However, on the flip side, U.S. gasoline demand jumped in latest EIA data through July 24, rising to 8.8 million barrels per day (mb/d), ending several weeks of decline, at least temporarily. That level of consumption is the highest in four months.

Moreover, the surge in cases in the United States has eased ever-so-slightly, with key states such as Texas, Florida and California seeing infections coming down from recent peaks. “This could be a sign of retreating demand risks from possible slowdowns or targeted lockdowns, but the prospect of a second wave later in the year still presents looming risks,” ClearView Energy Partners wrote in a note to clients.

The second wave in the U.S. may be plateauing for the time being, and the rebound in gasoline demand combined with the drawdown in inventories boosted oil prices midweek.

But the sentiment shifts from week to week, and it is not clear that the prevailing wisdom that oil markets would be in a substantial supply/demand deficit in the second half of the year will pan out. On Tuesday, Rystad Energy warned that the loosening of the OPEC+ production cuts could lead to a renewed surplus for the next four months.

Global supply is expected to increase rather significantly over the next several months, outpacing expected demand increases. “OPEC’s experiment to increase production from August could backfire as we are still nowhere near out of the woods yet in terms of oil demand. The overall liquids market will flip back into a mini-supply glut and a swing into deficit will not happen again until December 2020,” Bjornar Tonhaugen, Rystad Energy’s Head of Oil Market Research, said in a statement on Tuesday.

On Wednesday, Tonhaugen stuck with that thesis, despite the price increase on the back of EIA data. Rystad pointed to the unexpected rise in infections in Europe, a negative development that has yet to be factored in to market expectations. In fact, data from Europe shows a decline in road traffic as virus cases rise. “[D]on’t be fooled by today’s price gains, they may be cancelled as soon as production exceeds demand, which is around the corner, and as this is expected to last for some time, traders will race to price it in,” Tonhaugen said.

By Nick Cunningham - Jul 29, 2020, of Oilprice.com

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

Oil Market, Exchange Rate and Heating Oil Price Information June 2020.

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $35.48                Price at End of Month: $42.61

Highest Price in Month: $43.64                Lowest Price in Month: $35.48

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.2483                              End of Month: 1.2458

Kerosene (Heating Oil) Cargo Price $ per tonne       

Start of Month: $271.25                             End of Month: $334.50

Highest Price in Month: $351.75                            Lowest Price in Month: $271.25

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 5.37 ppl

Market Commentary:

$35 Brent: Goldman Sachs Turns Bearish On Oil

The relief rally in oil may be coming to an end as oil market fundamentals are turning bearish once again and pointing to Brent Crude slipping back to $35 in the short term, Goldman Sachs said on Monday, citing still uncertain demand recovery and returning production from the U.S. and Libya.

Despite the recent optimism that supply cuts from OPEC+ and economics-driven curtailments in North America will combine with rebound in demand, Goldman Sachs warns that there are four key reasons why oil prices are in for a pullback in the coming weeks, according to a note from the bank’s Senior Commodity Strategist Damien Courvalin cited by ZeroHedge.

In early May, Goldman Sachs expected that oil demand could rebound enough to exceed supply by the end of May.

But now, “demand expectations are running ahead of a more gradual and still uncertain rebound,” according to the Wall Street bank.

The other three key reasons for a pause in the oil rally are U.S. shale and Libya restarting some production, prices closing in on levels where Chinese opportunistic oil buying would slow, and a still massive 1-billion-barrel overhang in global oil inventories, Goldman Sachs said.

Some U.S. shale producers are bringing back shut-in production this month as prices rallied in May, while Libya has just confirmed that it restarted its largest oilfield, Sharara, after nearly six months of blockades.  

“With OPEC’s latest cut already more than priced in, we now forecast a pull-back in prices in coming weeks with our short-term Brent forecast of $35/bbl vs. spot prices of $43/bbl. Just as strengthening physical oil prices led us to turn constructive on the oil market on May 1, very poor refining margins and the recent sharp decline in US crude bases now comfort us in our sequentially bearish outlook,” Goldman said today.

Morgan Stanley also warned on Monday that oil prices have likely risen too fast too soon, as the market was focused on supply cuts, while global oil demand may not return to pre-COVID-19 levels before the end of 2021.

As of 10:00 a.m. EDT, oil prices had erased earlier gains for the day and were down, with WTI Crude dropping 1.52 percent at $38.93, and Brent Crude trading down 1.28 percent at $41.72.

By Tsvetana Paraskova for Oilprice.com

However a different commentator on the same website suggests that Covid-19 is to blame:

Oil Prices Crash On Second Wave Of COVID-19

Oil has had a turbulent year. Crude prices went negative for the first time in history, followed by one of the biggest rallies the industry has ever seen. And now, just when the market is starting to seem somewhat stable, COVID-19 strikes again.

A resurgence of COVID cases in the United States and a gloomy economic forecast from Federal Reserve Chair Jerome Powell has investors scrambling, with oil prices on track to hit their biggest daily decline since April 27th. Once again, oversupply and lack of demand have taken center stage.

Yesterday, the EIA reported that U.S. oil inventories rose by 5.7 million barrels, defying predictions of a 1.45 million barrel build. Adding even more pressure to oil prices, the U.S. Federal Reserve noted that unemployment rates were set to settle near 9.3% by the end of the year, adding that it could take years to return to pre-pandemic employment levels.

COVID-19 has been the main culprit in the market collapse. While many states have already reopened with some strict guidelines, things don't seem to be going as planned.

It took the United States nearly three months to hit the 1 million confirmed cases mark, yet it only to six weeks to double it. On Wednesday, the U.S. crossed the 2 million mark, with many states reporting significant spikes following attempts to ease lockdown restrictions.

As of this morning, the U.S. has reported over 113,000 COVID-related deaths, and healthcare experts across the globe are warning that the pandemic is nowhere near over, encouraging individuals to maintain social-distancing practices and to wear face masks in public.

Though COVID-19 has taken a clear toll on global economies, some suggest the oil market, in particular, simply rose too quickly.

Jeffrey Halley, senior market analyst, Asia-Pacific at OANDA said "The fall in oil prices is just as much about timing as COVID-19 cases though, coming as both equities and oil were looking overbought on any measure of short-term indicator," adding, "Some sort of correction had been overdue after the massive increase in speculative long positioning, and oil's breath-taking rally over the past month."

By Charles Kennedy for Oilprice.com

But overall there is no denying that with only half of the year gone it’s already;

The Most Dramatic Year In The History Of Oil

There are very few industries in the world that have been hit as hard or are set to face as many consequences as the oil and gas industry in 2020. In a recent report, Fitch Ratings forecast that oil and gas exploration and production companies would lose $1.8 trillion in revenues this year, which is six times more than the retail sector is set to lose. But the long-term consequences are going to be even more devastating. Perhaps the most visible change taking place in the oil and gas industry is the drastic cost-cutting measures being taken by the oil majors. BP has been forced to cut 10,000 jobs, or 15 percent of its workforce, as it tries to control costs in this new low oil price environment. Schlumberger had already slashed salaries and cut jobs in late March, while Shell and Chevron have announced plans to shrink their workforces.

And it isn’t just in the workforce where we are seeing unprecedented cuts. Shell’s decision to cut its dividend for the first time since 1945 was probably the single largest indicator of the long-term impact this pandemic will have on the oil industry. Shell and its fellow oil majors have prided themselves on paying out dividends regardless of market conditions in order to keep their shareholders happy. Its decision to cut its dividends marks a shift in strategy that suggests the oil major is now determined to cut its debt going forward and focus on financial sustainability rather than just pleasing shareholders.

It remains unclear if oil demand will ever return to pre-pandemic levels. From the destruction of the aviation industry to the transformation of workplace dynamics reducing daily travel and governmental pushes for renewable energy, oil demand is being attacked on all sides due to COVID-19. The oil majors seem to have recognized this global shift and are determined to make their operations as lean and sustainable as possible.

2020 is shaping up to be the most dramatic year in the history of oil markets, with a decade’s worth of change seeming to be taking place in just 365 days.

By Charles Kennedy

This raises a further challanging question - with so much change and chaos why are the markets so optimistic?

Oil Market Optimism Is Entirely Misplaced

• - The recent optimism in oil markets has left many analysts scratching their heads, with no real fundamental reason for the shift in sentiment.

• - Demand projections that suggest Asia or the world economy will be moving back to pre-pandemic levels anytime soon are laughable.

• - The only justifiable optimism for oil markets at the moment is the optimism surrounding 2021 when we will likely see a monumental supply crunch.

Optimism is supposedly back in oil markets, with the Global Research team at Bank of America lifting its oil price forecast for this year and next as demand recovers from coronavirus-linked shutdowns, the OPEC+ output cut deal curtails supply, and producers slash capital expenditure. The bank now sees Brent crude oil averaging $43.70 per barrel in 2020, up from a previous estimate of $37. In 2021 and 2022, the bank forecasts average prices of $50 and $55 a barrel respectively. BofA also forecast that “a pattern of falling inventories across most regions should emerge as we move into H2 2020. As a result, we expect the full Brent crude oil curve to return into backwardation by year-end”.  Norwegian consultancy Rystad Energy, however, has warned that the downside risk in oil markets is still very much alive. In its weekly webinar, Rystad’s Head of Oil Markets, Bjornar Tonhaugen stated that “Brent prompt futures are under pressure this morning with bearish traders selling below US$40, in a reminder that not all is well yet in the market”. He also indicated that while mainstream analysts are optimistic and see a recovery and upward potential for oil, the short-term reality is far from certain.

When looking at the foggy picture currently being painted by the news, publications, and facts on the ground, the only real conclusion that can be drawn is that the ongoing price rally is not yet based on market fundamentals. The ongoing demand hike, as shown by some analysis in Asia, is not based on recovering demand of consumers or industry, but largely caused by refinery runs that are taking advantage of the relatively low oil prices. Using oil in storage to produce oil products is a normal economic phenomenon, preparing higher-margin products for the future while also opening up some additional storage space for new imports.

Overall, then, optimism should be tempered, as there are not yet any real signs of improvement available in the major economic regions, especially in the U.S. and EU, that would suggest a move towards a pre-coronavirus economy. Oil market analysts and investors seem to forget that current economic figures, which are already extremely bad, are possibly only the tip of the iceberg. When looking at the economic situation in the Eurozone-area, and the EU in general, positive economic figures are largely the result of governmental financial support and will worsen when that support is reduced. Current stimulus packages are not sustainable, and a high level of bankruptcies and lay-offs are to be expected before the end of the summer. 

The economic backbone of major industries in Europe, automotive, airlines, tourism, and even manufacturing, is facing a bleak and very insecure couple of years. Demand for crude oil and products will be hit hard if the expected rise in unemployment becomes a reality. The U.S. and other major markets are not looking any better. The current U.S. stimulus packages are propping up some sectors of the economy, while already historically high unemployment figures will lead to foreclosures, higher credit debts, and failed repayments of car loans, etc. Demand for crude oil, in the world’s second-largest consuming market, seems to be heading towards a cliff.

Asian figures, which are being presented by several parties as looking promising, are again unlikely to meet expectations. Chinese production figures and GDP growth were already a subject of much debate before the global pandemic, and now it is going to suffer from lower demand in trade and possible political conflicts. A combination of trade wars, the EU’s reluctancy to keep its doors open to China’s economic might, and a continuing struggle to stave off an internal economic crisis, does not bode well for the Asian giant. Demand for China’s products is down and will continue to decline if its main clients (the E.U. and U.S.) are hit by an economic recession.

Even within the physical oil market itself, it seems that optimism is being misplaced. OPEC+  production cuts are holding, but compliance is at less than 90 percent, which means the main producers are still hitting the markets with additional unwanted oil volumes. Saudi Arabia, UAE, and Kuwait are keeping to their commitments, but Iraq and others are struggling. At the same time, a prolonged production cut strategy is no longer sustainable for several producers as their economies are in shambles, and unrest is brewing. Non-OPEC producers are also looking for a way out, and Russia has indicated that it doesn’t see any long-term options for a production cut. U.S. oil production, which has been hit by both COVID and an OPEC+ oil price war, is currently struggling but has the potential to come back online quickly. If oil prices remain in the $35-40 per barrel range, we will see a re-emergence of several shale oil players and additional (unwanted) volumes in the market. Furthermore, global crude oil storage volumes are still at historically high levels. Last week’s optimistic forecasts of draws of storage volumes is likely a one-off. The fact remains that there is still too much oil available, but SPRs are being used to improve storage figures.

Another reason for our overly optimistic outlook is that the profit strategy of downstream companies has resulted in higher volumes of product in storage, as demand for products is low. This can be seen in U.S. crude stockpiles which were reported to have grown by more than expected, adding to worries about oversupply.  American Petroleum Institute (API) reported that U.S. crude inventories rose by 1.7 million barrels last week, well ahead of analysts’ expectations for a 300,000-barrel build. While product volumes showed a storage draw, optimism here is based on the fact that fuel consumption is picking up as some economies ease lockdown measures. When looking at the real figures, demand for products is still way below normal figures for the same time last year. Another major worry is that China, the world’s top crude importer, is also expected to slow crude imports in the third quarter, after record purchases in recent months, as higher oil prices hurt demand and refiners worry about a second virus outbreak.

Looking at fundamentals, combined with increased economic and geopolitical unrest globally, there is no real justification for oil market optimism in 2020. Both the summer and autumn of 2020 will be volatile periods for oil markets, with a possible economic recession of an unknown magnitude hitting the global economy. Optimism should instead be pointed towards 2021. A combination of low investments upstream, combined with potential new unrest in MENA (Libya-Iraq) or removal of the weak parties in upstream, will lead to a supply crisis. Beneath the fog of the current demand discussions and fake optimism about the economic growth of Asia and other regions, there is a supply crisis forming which will hit the market hard. The year 2021 will recharge oil and gas with a bang, as we jump from a demand-driven market to a supply-driven situation. Prices will increase, even with a global economic crisis, but revenues will be distributed to new power players that will replace the current U.S.-E.U. centric oil and gas upstream sector. An average crude oil price (Brent) of above $40 per barrel is wishful thinking in 2020. We may witness hikes, but general fundamentals are showing a $30-$34 range rather than a $40-45.

By Cyril Widdershoven for Oilprice.com

Tighter Markets End Lucrative Oil Trade

From a super contango in April, the Brent Crude futures curve has flattened and flipped to backwardation for the nearest months, wiping out was is seen as one of the most lucrative oil trades Production cuts from Saudi Arabia to the U.S. shale patch, combined with recovering oil demand, have changed in recent weeks the oil futures curve more to the liking of the OPEC+ group. 

From a super contango in April, the Brent Crude futures curve has flattened and flipped to backwardation for the nearest months, wiping out the most significant financial incentive for oil trading houses to profit from the price structure when oil demand crashes.  

During the ‘peak lockdown’ period when every major economy except China was under lockdown in late March and early April, the oil market was in a state of super contango. In this market situation, front-month prices were much lower than prices in future months, pointing to a crude oil oversupply and making storing oil for future sales profitable. Traders rushed to charter supertankers for floating storage for several months to a year so they could sell the oil at higher prices later. 

In the middle of June, production cuts and an uptick in oil demand helped the Brent Crude price structure flip to backwardation, signaling a tightening of the physical oil market.

Backwardation – the opposite of contango – is the market situation that typically occurs at times of market deficit. In backwardation, prices for front-month contracts are higher than the ones further out in time.

Backwardation is currently only seen for the next two to three months, but analysts expect the full Brent futures curve to be in backwardation by the end of the year thanks to recovering demand. Bank of America (BofA) Global Research, for example, sees inventories in most regions beginning to draw down in the second half of this year, and the full Brent futures curve could flip by the end of the year to backwardation.

A backwardated futures curve is definitely the preferred market structure for OPEC and its allies, which rely on higher front-month prices to help draw down excess inventories and record floating storage, which would push oil prices higher if demand continues to improve.

At the same time, the new shape of the oil futures curve is already discouraging what was the most lucrative trade in the oil market two months ago at the peak of the demand loss.

“Quite simply the contango is no longer there, so it does not make any economic sense to enter into a new floating storage trade, unless the deal was locked in when the contango was sufficient to cover freight costs,” Richard Matthews, an analyst who monitors the trade at E.A. Gibson Shipbrokers, told Bloomberg. 

This new phase in the oil market is in stark contrast to the wild rush for chartering oil tankers, either for floating storage incentivized by the super contango, or for the record volumes of Saudi oil that flooded the market in April.

Floating storage has started to recede from record-highs in April in almost every region as demand began to recover from the record plunge.

According to estimates from the International Energy Agency (IEA), floating storage of crude oil dropped in May by 6.4 million barrels to 165.8 million barrels, from its all-time high of 172.2 million barrels in April.

Estimates by Bloomberg showed earlier this month that floating storage of North Sea oil had started to shrink as most of Europe lifted their lockdowns.

Tanker operator International Seaways said last week that it estimates 160-180 million barrels are being stored on ships currently. The strong oil contango earlier this year made it profitable to store oil, “creating a demand for time chartered ships for storage, further reducing ship supply and increasing rates,” the tanker operator said in a presentation to its annual meeting of stockholders.

In recent weeks, however, the contango has decreased, and the short-term floating storage of crude oil is declining, International Seaways notes.

For tanker owners, the vanishing of the contango and the record cuts from OPEC+ is bad news for tanker demand and rates. They knew that the super trades with the super contango would not last long and would have to eventually face a new market reality with OPEC+ withholding supply to decrease the glut and increase oil prices.

For OPEC+ and for tanker operators alike, continuous demand recovery would be excellent news – if it holds.

By Tsvetana Paraskova for Oilprice.com

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

Oil Market, Exchange Rate and Heating Oil Price Information May 2020.

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $18.85                Price at End of Month: $35.48

Highest Price in Month: $35.48                Lowest Price in Month: $18.85

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.2614                              End of Month: 1.2363

Kerosene (Heating Oil) Cargo Price $ per tonne       

Start of Month: $121.75                                           End of Month: $253.25

Highest Price in Month: $271.50                            Lowest Price in Month: $121.75

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 9.00 ppl

Market Commentary:

Goldman Sachs: Jet Fuel Demand Recovery Could Take Years

By Tsvetana Paraskova - May 11, 2020, 11:00 AM CDT

While global oil demand is set to rebound with a V-shaped recovery, demand for jet fuel will continue to languish for at least another two years, cut by significantly reduced business travel, Goldman Sachs says, as carried by Business Insider.

"We believe oil will exhibit a V-shaped recovery, but supply will exhibit an L shaped recovery," Goldman Sachs' head of global commodities research, Jeff Currie, said at a virtual briefing attended by Business Insider.

However, jet fuel demand will not return to the pre-virus levels until Q3 2022, according to Currie. 

"You are going to lose a big chunk of the jet demand that would have been associated with business travel," he said.

Boeing CEO Dave Calhoun said on Boeing's Q1 earnings call at the end of April:

"We believe this industry will recover, but it will take two to three years for travel to return to 2019 levels, and it will be a few years beyond that for the industry to return to long-term growth trends."

So far into the pandemic, jet fuel was the oil product with the largest decline in demand relative to 2019, the International Energy Agency (IEA) said in its Global Energy Review 2020 report earlier this month. 

Rystad Energy also sees jet fuel demand being hit the hardest, assuming as a base case that "the common summer air travel peak will not occur at all this year."

Jet fuel demand globally is set to plunge by 33.6 percent on the year in 2020, or by at least 2.4 million bpd from last year's demand for jet fuel of about 7.2 million bpd, Rystad said in its latest assessment on oil and fuels demand last week.

Oil demand could rebound enough to exceed supply by the end of May, Goldman's Currie said last week, noting that this would be in no small part because of the production cuts implemented by all major producers.

However, there are some 1.2 billion barrels in storage, Currie added, that would need to be drawn down before oil prices materially improve.

By Tsvetana Paraskova for Oilprice.com

When Will The Next Oil Price Cycle Begin? By Salman Ghouri - May 11, 2020

The world will soon bounce back from this pandemic, but the recovery will be rough and painful. The current low oil price environment will also come to an end, with prices possibly spiking as demand recovers.

The extent of oil and gas exploration and production is largely driven by current oil prices, future expectations of oil prices, and availability of resources. Higher oil prices generally lead to large investments in upstream operations, while lower oil prices can lead to a drastic drop in investment. Persistently lower oil prices from 2014 to 2016 led to underinvestment in upstream and fewer Final Investment Decisions for oil projects. Investments in upstream, for example, plunged from $1079 billion in 2014 to $900 billion in 2015 and then further down to $583 billion in 2016. This is because lower oil prices severely affect the revenues, cashflows, and profitability of oil and gas companies. That leads to fewer resources being available for future investment in exploration and production activities. The question now, is what will happen to the oil and gas industry post-COVID-19? Should we expect the regime of lower oil prices to linger or will oil prices bounce back?

COVID-19 has devastated the global economy and it may take years to recover from the economic and social damage it has caused. The months-long lockdown has not only severely impacted businesses but has also resulted in high unemployment and all the social issues that come with it. The U.S Labor Department reported that total nonfarm payroll employment fell by 20.5 million in April, causing the unemployment rate to hit 14.7 percent. This is the highest rate of unemployment and the largest monthly increase since January 1948.

The International Labor Organization (ILO) reported that some 1.6 billion workers in the informal economy, representing nearly half of the global labor force, are in immediate danger of losing their livelihoods due to the COVID pandemic. Within the formal economy, things aren’t much better, with industries such as the aviation industry suffering through record-breaking losses. The oil industry is another front-line sector that has been hit hard. Low oil and gas prices over the past few months have not only resulted in high unemployment within the industry (the U.S. Labor Department reported that unemployment in mining, quarrying, and oil and gas extraction rose from 1.9 percent in January to 10.2 percent in April 2020.) but have also hit revenues, profit, and cash flows hard. As such, most of the major oil companies have already incurred huge losses. For example, Occidental Petroleum Corp. reported a net loss of $2.2 billion, BP  reported $4.4-billion net loss in the 1st quarter, ExxonMobil reported an estimated first-quarter loss of $610 million and also announced 30 percent cut in its capex for 2020 to $23 billion, compared to the $33 billion earlier announced. Italian oil and gas company Eni SpA (E) reported its first-quarter net loss was 2.93 billion euros, compared to a net profit of 1.09 billion euros a year ago. Many companies within the oil and gas industry will go out of business as the losses mount and prices remain low.

Rystad Energy estimated that E&P companies will see revenues plunge by around $1 trillion in 2020, falling to $1.47 trillion from $2.47 trillion last year. They were also of the view that 2020 will see the lowest project sanctioning activity since the 1950s in terms of total sanctioned investments, which stands at $110 billion – only 33 percent of the investments in 2019. Many companies have already abandoned or deferred their major projects.

So what does this all mean? It simply means that fewer resources will be made available for future investments in exploration and production - hindering the ability of companies to invest in future projects. A decrease in exploration and production investment will lead to a supply squeeze in the future once demand comes back online.

The coming recovery will require enormous financial and energy resources to rectify the damages caused by COVID-19. During this recovery process, global oil demand will slowly move towards normalcy and may even surpass global supply. Even if the oil industry were to increase investment, there is always a lag involved in bringing production online. It takes a number of years to discover, acquire, and develop a project. Even shale oil wells may struggle to come back online as it is difficult to return a well that has been shut-in to its previous production levels. Then there are the disruptions at manufacturing sites (where plants & equipment for future delivery are under construction) to consider. These delays may impact a project’s completion date. The list of variables that could impact the supply side of the oil market in the near future is a very long one.

The world has witnessed various cycles in the past, but there has never been anything as complete and intensive as this. The time-scale of the oil price recovery will depend upon how quickly the global economy is revived and how fast the surplus oil is consumed by increasing demand. The ability of OPEC to comply with its production cut deal will also play a role in the oil market recovery.

While the timescale remains unclear, a new oil price cycle is in the making, and the serious lack of investment in exploration and production as well as other supply-side issues could send oil prices significantly higher.

By Salman Ghouri for Oilprice.com

Has Demand For Oil Already Peaked?

By Nick Cunningham - May 12, 2020, 7:00 PM CDT

Oil prices continue to rise on the prospect of a rebound in fuel demand as economies begin to reopen.  But there is a large difference between oil demand rising from recent lows and actually growing relative to pre-COVID-19 trends. In other words, demand destruction on the order of nearly 30 million barrels per day (mb/d) may have been brief, but we are a long way from a 100-mb/d oil market.

In fact, some are wondering whether the world will ever get back to 100 mb/d of oil demand. Even oil executives have their doubts. Royal Dutch Shell’s CEO Ben van Beurden recently suggested that a rebound is unlikely, even looking out beyond 2020. “We do not expect a recovery of oil prices or demand for our products in the medium term,” he said.

“We basically have a crisis of uncertainty. Uncertainty about demand, about prices,” van Beurden said in a video address when presenting first quarter results at the end of April. “Maybe even uncertainty about the viability of some of our assets given all of the logistical issues we have.”

BP’s CEO Bernard Looney largely admitted the same thing. The COVID-19 pandemic could entrench certain societal changes – more teleworking, less commuting, less flying – that could permanently erode a portion of consumption. “It’s not going to make oil more in demand. It’s gotten more likely [oil will] be less in demand,” Looney said in an interview with the FT.

“I don’t think we know how this is going to play out. I certainly don't know,” Looney said. “Could it be peak oil? Possibly. Possibly. I would not write that off.”

Not everyone agrees. ExxonMobil’s chief executive Darren Woods recently said that the long-term trends “have not changed.” 

A new study from IHS Markit also sees oil demand mostly returning to “normal” by the end of 2021. “It may be hard to comprehend now. But barring a second wave of the pandemic, nearly all pre-COVID demand could return by the second half of 2021,” Roger Diwan, vice president of financial services at IHS Markit, said in a statement. The firm sees oil demand rising to 96-98 percent of pre-coronavirus levels by the second half of next year.

 “If that transpires it could even lead to a market squeeze in the medium-term as supply destruction hinders the ability of supply to keep up with recovering demand,” Diwan added.

A separate report from the Oxford Institute for Energy Studies sees something similar. The report eyes a supply deficit as soon as the third quarter of 1.5 mb/d, on the back of severe supply curtailments and a rebound in demand. The report says the market could be undersupplied in 2021 by as much as 5 mb/d. But the inventory overhang means that Brent trades in the $40 to $50-per-barrel range for most of next year.

The Oxford report also sees demand mostly arriving back at pre-pandemic levels at the end of 2021.

The problem with that notion is that a second wave of coronavirus infections is completely plausible, perhaps even likely (something both the IHS and the Oxford reports admit are big uncertainties). Time will tell.

But the permanent changes in some behaviors, along with the ongoing market share gains for electric vehicles, go beyond oil market cycles. If demand does return, and boom follows bust, the shift to cleaner energy will only accelerate, and that’s before even considering any green stimulus measures now under consideration.

One important issue that the Oxford report raises is how Saudi Arabia responds after the immediate crisis subsides. With the prospect of peak demand looming, there are “advantages” for Saudi Arabia if it pursues a high-volume/lower price strategy, the Oxford study says. That is, Saudi Arabia may want to ramp up production in the years ahead in order to monetize its remaining reserves as demand peaks and begins to decline.

Cutting by too much in an effort to push prices to $50 per barrel or above would clear the way for a return of U.S. shale. Better to keep the market well supplied, capture more market share, and box out a rebound in shale drilling.

Other analysts agree. “Will OPEC+ then hold on to production cuts in order to opt for price rather than volume once the oil price moves back to $50/bl thus once again chase the oil price to $60/bl and $70/bl by holding back supply?” Bjarne Schieldrop of SEB wrote in a report. “If so, this would again give preference to shale oil volume rebound in exchange for a higher oil price to OPEC+.”

By Nick Cunningham of Oilprice.com

England tiptoes out of full lockdown as economy plunges

Alistair Smout May 13, 2020 / 8:49 AM

LONDON (Reuters) - England tentatively began easing its coronavirus lockdown on Wednesday, with some people who cannot do their jobs at home urged to return to work, as stark economic data showed the disastrous impact of the pandemic.

The worst-hit country in Europe with more than 40,000 deaths from COVID-19 according to official data, Britain has been in extensive lockdown since March 23. As of Wednesday morning, people in manufacturing and certain other sectors were being asked to return to work if they could.

GDP data released on Wednesday showed the economy shrank by a record 5.8% in March compared with February, and the April data is likely to be even worse as the country was under lockdown for the entire month.

The government is loosening restrictions very gradually, for fear of triggering a second peak of infections. Prime Minister Boris Johnson has described the process as a “supremely difficult” balancing act.

Scotland, Wales and Northern Ireland, which have semi-autonomous governments, are sticking with a “stay at home” message for now, leaving England, the most populous UK nation, to take the lead in sending some people back to work.

The government has faced a barrage of criticism that its new guidance - Stay alert, control the virus, save lives - was confusing. Appearing on Sky News TV, transport minister Grant Shapps was asked why estate agents were being allowed to restart house viewings when people could not have their own relatives to visit.

“The truth of the matter is, you have to start somewhere. The lockdown message was very straightforward - it was just stay at home. Now as we start to unlock, of course, there have to be decisions made,” Shapps said.

“There is no perfect way of doing this, and we’d ask people to use their common sense ... Right now, there has to be a cut-off somewhere.”

Workers were being advised to avoid public transport if at all possible, and schools remained closed, prompting questions about how parents and people who could not get to work by other means were supposed to apply the new guidance.

Employers faced the daunting task of creating safe environments for their staff, with detailed guidance on one-way systems at entry and exit points and in stairwells, spacing out workstations and other minutiae.

For those still working from home or unable to work, there was only a very slight change in the regime. People were now allowed out to exercise more than once a day, and two people from separate households were allowed to meet outdoors as long as they kept 2 metres apart.

Martin Hewitt, chairman of the National Police Chiefs’ Council, said officers would still be encouraging people to go home if they were out for reasons other than the authorised exercise, shopping for essentials, health or work.

Fines for transgressions have been increased.

“Everybody will carry on hopefully working in the spirit we’ve had for the last seven weeks,” he told BBC TV.

“It’s not for the police to police people being 2 metres apart, that’s about everyone’s individual responsibility. If there are those people who refuse to abide by the new regulations then we will move to enforcement if that’s what we have to do,” he said, describing that as a last resort.

Are Oil Prices Rising Too High Too Soon?

By Tom Kool - May 18, 2020, 12:00 PM CDT

Oil prices have rallied significantly, rising $10 in two weeks as markets are increasingly convinced that global demand for crude is picking up once again.

Deep output cuts and the reopening of some of the largest economies in the world have brightened the outlook for oil, but many analysts are now beginning to question whether this rally isn’t already overdone. So why are oil prices still rocketing as analysts warn of ballooning inventories and continued weak demand for aviation fuel?

Looking at the data, the first signs of real demand recovery are coming from the Far East, where Chinese refiners have embarked on a buying spree, capitalizing on ultra-low crude prices in heavy hit markets such as Brazil, Oman, and West Africa.

Spurred by Beijing’s call to action, factories and farmers are leading the demand recovery in diesel according to Liu Yuntao, an analyst working with Energy Aspects in London. 

But it’s not just diesel. Gasoline consumption is also on the rise in China, where rush hour traffic in Beijing, Shanghai, and tens of other big cities is approaching normal levels once again as the Chinese are finding out that coronavirus isn’t spread by driving your car.

Demand for jet fuel, however, continues to lag behind as air travel is still a fraction of what it was before the lockdown began. Demand for distillates such as jet fuel could continue to lag for a much longer time as long-haul air travel continues to face restrictions. The International Civil Aviation Organization (ICAO) estimates that international capacity could drop by as much as two-thirds from previous forecasts for the first three quarters of 2020.

Chinese refineries may have ramped up activity too soon. Refining margins are already suffering as Chinese refineries are exporting large amounts of oil products in the region, flooding an already well-supplied market with more gasoline, diesel and bunker fuel. Unlike China, other East-Asian countries such as Japan and South Korea are taking a more prudent approach while planning to ease lockdowns, resulting in lower fuel consumption during what is usually seen as peak driving season.

In the meantime, 117 Very Large Crude Carriers are expected to unload up to 230 million barrels of crude oil to China over the course of the next three months. Most of this crude was bought in April against rock-bottom prices. Market watchers are now keeping a close eye on refinery run rates and margins in China as one of the first main indicators of real recovery in global crude demand.

A real recovery in crude markets will only materialize if Chinese oil imports continue to stabilize during 2020.

For now, early data on fuel consumption in both the Far East and the U.S. will show whether the optimism in oil markets was justified or not.

By Tom Kool of Oilprice.com

The Oil Rally Is Running On Fumes

Published May 18, 2020, 7:00 PM CDT

Oil prices have surged to two-month highs on growing signs of a rebound in oil demand, as the easing of lockdowns spread worldwide. At its peak in April, global lockdown measures affected around 3.9 billion people. But an estimated 3.7 billion people are now living in areas that are experiencing some version of a “reopening,” according to an estimate from Raymond James.

Data from China has stoked some bullishness in oil markets, although there are some mixed signals. Traffic is back in many Chinese cities, and there are early signs that China’s oil demand is rising back close to pre-pandemic levels around 13 million barrels per day (mb/d).

At the same time, a new coronavirus cluster in China suddenly sparked another lockdown measure. While Wuhan and other regions may be opening up, roughly 108 million people in Jilin province just went into lockdown. It’s a sign that the fight against COVID-19 will likely be frustrated by repeated flare ups in new cases, which may ultimately lead to renewed lockdowns.

But for now, the markets apparently want to focus on the positive. On the global vaccine front, there appears to be some progress. Moderna said on Monday that its vaccine has shown to be safe in humans and has also demonstrated promising results in stopping COVID-19. Meanwhile, AstraZeneca said it could have 30 million doses of its vaccine ready by September.

Financial equities rejoiced, with the Dow Jones up roughly 3.5 percent during midday trading. WTI surged past $30 per barrel, up at one point on Monday by more than 10 percent. 

Massive supply cuts go even further in explaining the recent jump in prices. Oil traders view the implementation of the OPEC+ cuts favorably, with the 9.7 mb/d cuts phasing in swiftly. Part of the reason is that some oil producers, including Saudi Arabia, began having difficulty finding a home for its oil, so a portion of the cuts arguably became involuntary.

Meanwhile, weeks of catastrophically low oil prices ravaged North American oil producers over the past two months. Shut ins could reach 2 mb/d in the U.S. by June, and Canada could lose 1 mb/d.

But a reality check is in order. WTI at $30 per barrel is suddenly seen as “bullish,” but that price level is financially unsustainable for a vast swathe of global oil supply, including most of the U.S. shale complex.

Moreover, the physical oil market is not “out of the woods” just yet, according to Rystad Energy. “We still see a 13.7 million bpd implied liquids (crude, condensate, NGLs, others) stock builds in May-20,” the firm said in a statement. That is down by half from the peak of the glut (-26.7 mb/d in inventory builds in April), but a significant overhang remains. 

Separately, Commerzbank argued that the oil market optimism may be running a little too far. “Despite all the euphoria, however, we believe that caution is still advisable: it will probably take some years before demand recovers to its pre-crisis level,” Commerzbank wrote on Monday.

U.S. Federal Reserve Chairman Jerome Powell warned that the American economy recovery could take until the end of 2021. “It could stretch through the end of next year. We really don’t know,” Powell said over the weekend. He noted that the economy might not return to normal simply because stay-at-home-orders are in the process of going away. “For the economy to fully recover people will have to be fully confident, and that may have to await the arrival of a vaccine,” Powell added.

In addition, the price rally may also be the result of speculative positioning – the physical market is trending towards rebalancing, but the rally can also be explained by overly exuberant speculative positioning. “Retail and institutional investors are also likely to have played a key part in the latest price rise. According to the CFTC, the latter expanded their net long positions in WTI on the NYMEX to around 352,000 contracts in the week to 12 May, putting them at their highest level since September 2018,” Commerzbank added. “Thus the positive trends (for the oil price) are largely expected and already priced in.”

The lockdowns are lifting, but there is nothing to suggest that the end of the pandemic is near, or that oil supply will remain shut in. “[T]here is significant downside risk related to two events, the resurgence in COVID-19 outbreaks, and deteriorating compliance to OPEC+ cuts as demand comes back,” Rystad warned.

By Nick Cunningham of Oilprice.com

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

Oil Market, Exchange Rate and Heating Oil Price Information April 2020.

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $17.30                Price at End of Month: $19.71

Highest Price in Month: $19.71                Lowest Price in Month: $13.21

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.2425                              End of Month: 1.2614

Kerosene (Heating Oil) Cargo Price $ per tonne       

Start of Month: $200.75                                           End of Month: $154.50

Highest Price in Month: $221.25                            Lowest Price in Month: $111.00

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 7.32 ppl

Market Commentary:

Just How Big Is the Biggest-Ever Slump in World Oil Demand? 

How low can you go? That seems to be the question bothering the world’s big-three oil forecasting agencies as they grapple to come to terms with the size of the slump in oil consumption triggered by the international response to the Covid-19 virus.

The International Energy Agency, the Organization of Petroleum Exporting Countries and the U.S. Energy Information Administration have all updated their oil market forecasts in the past week and they make grim reading. As recently as February, all three saw the world’s thirst for oil increasing by close to 1 million barrels a day this year. Now they are projecting a drop in annual average demand of anywhere between 5 million barrels a day and more than 9 million.

The IEA is the most bearish of the three agencies by some margin. Having been the least optimistic of the three about the strength of growth earlier in the year, it’s now way out in front of the others in its estimation of the demand destruction caused by the grounding of planes, parking of cars and suspension of large parts of the economies in much of the world.

Collapse

Previous views on demand growth have been swamped by the sheer size of the demand destruction wrought by the Covid-19 virus.

On an annual average basis, the Paris-based IEA now expects global oil demand to be 9.3 million barrels a day lower this year than it was last year. That’s equivalent to losing the entire consumption of India and the whole of Africa. OPEC is a little less gloomy, seeing demand falling year-on-year by 6.85 million barrels a day, while the EIA looks positively optimistic, with its drop of 5.25 million barrels.

But if you think the annual average figures are bad, the quarterly ones are truly horrifying.

2Q Blues

The IEA sees a loss of oil demand in the current quarter that’s equivalent to the entire consumption of the U.S. and Canada, or about 23 million barrels a day. The EIA and OPEC are not quite so gloomy, but even they see a drop greater than all the oil used in France, Germany, Italy, Spain, the U.K. and Japan.

All three expect things to get better, or at least not to be quite so bad, in the second half of the year. By then the IEA and OPEC agree that global oil demand will (only) be down by about 5 million barrels a day compared with the same period last year. OPEC and the IEA have very similar views on oil demand in the second half of 2020, while the EIA is noticeably more optimistic. That optimism may reflect the views of an administration that seems determined to ease the lockdown on its citizens as soon as possible.

In the face of these demand forecasts, it’s little surprise that the OPEC group of countries agreed their biggest-ever output cut and managed to bring almost all of their OPEC+ allies along with them. It’s also clear that the cuts by themselves are not nearly big enough to offset the immediate slump in demand.

If the OPEC members adhere strictly to their part of the deal -- which is itself a tall order -- the group will pump about 23.4 million barrels a day in May and June, assuming the three members exempt from the cuts -- Iran, Libya and Venezuela -- continue pumping at last month’s levels. That’s down from a possible 31.8 million barrels a day in April, if Saudi Arabia, Kuwait and the U.A.E. all boost output as they have threatened until the cuts come into effect. That would give an average second-quarter production level of 26.2 million barrels a day.

Too Much Oil

OPEC over-production in the second quarter could be anywhere between 6.5 million and 17.7 million barrels a day, which would have to go into storage

Comparing that production level with the three agencies’ assessments of the world’s need for OPEC crude in the second quarter reveals the alarming size of the potential stock-build. OPEC’s own supply demand forecast suggests that stockpiles will build at an average rate of 6.5 million barrels a day this quarter, while the EIA sees them filling at a daily rate of 8.6 million barrels.

But the IEA sees the world needing just 8.5 million barrels a day of crude from OPEC in the second quarter. That would be equivalent to Saudi Arabia pumping in line with its agreed target in April as well as for May and June and none of the group’s other members pumping anything at all.

Assuming the deal is implemented in full from May 1, the IEA’s numbers imply global stockpiles building at an average rate of 17.7 million barrels a day during the whole of the second quarter. That would require 1.6 billion barrels of storage space for crude by the end of June.

On the basis of those figures, even with the full OPEC+ cuts and the loss of an additional 4.5 million barrels a day of non-OPEC supply, oil prices will still have to fall far enough to persuade more producers to shut in more production before we run out of places to store all the crude that nobody wants.

By Julian Lee in Bloomberg 17 April 2020

Will Oil Markets Ever Recover?

By Tsvetana Paraskova  

Oil companies, oil refiners, and oil traders believe that the worst of the demand destruction is already behind us. But the jury is still out on how long it will take for global oil demand to recover to pre-COVID-19 levels--if ever. The current prevailing opinion among industry professionals, international organizations, and analysts is that it could be more than a year before oil demand returns to 2019 levels.

There are early encouraging signs that demand is already edging up from the bottom that it hit a couple of weeks ago. Yet, the industry may have to wait until the end of 2021 to see global oil demand back up to 100 million barrels per day (bpd).

What's worse, some analysts say demand may never return to those levels.

Shell’s chief executive Ben van Beurden said on the earnings call last week that the current crisis is a “crisis of uncertainty,” and we don’t know what’s on the other side of it, as the supermajor slashed its dividend for the first time since World War II.

“We are looking at a major demand destruction that we don't even know that will come back. So the oil price may come back. But if the volumes are significantly lower, we still have a major dislocation, of course, in our own cash wheel,” van Beurden said.

Demand will return. However, it will be a slow journey on the road to recovery. According to one of the biggest oil firms in the world, Shell, maybe we've already hit peak oil demand—a sobering view in stark contrast with opinions from just three months ago that suggested global oil demand would continue to grow every year for at least another decade.

Still, signs are already out there that the worst of the demand crash is behind us.

 “I think there probably is a pent-up demand for folks to get out of their houses and get mobile and to shop again and to go to restaurants again,”

Joe Gorder, chairman and CEO at one of the largest refiners in the U.S., Valero Energy, said on the earnings call last week, commenting on the uptick in U.S. gasoline demand.

Darren Woods, chairman and CEO at ExxonMobil, which just reported its first quarterly loss since the 1999 merger of Exxon and Mobil, said on the call:

“[T]here are some, I’d say, encouraging early signs in the transportation sector, particularly road transportation.”

Last week, U.S. nationwide gasoline prices edged up for the first time in ten weeks due to a slight uptick in demand, according to AAA. For the week to April 24, the EIA reported a surprise draw in gasoline inventories, suggesting that the U.S. has put the worst of the demand slump behind.

U.S. gas demand rose from 5.31 million bpd to 5.86 million bpd in the week to April 24, but it was still 3.37 million bpd lower than the 2019 rate for that week, AAA says.

“As more states aim to end their stay at home orders and businesses around the country begin to reopen, gas demand is likely to continue increasing and pump prices are likely to slow their decline and possibly increase, too,” AAA noted.

Demand is slowly crawling up and will continue to do so, both in the U.S. and in Europe, where major economies such as Italy and Spain started to relax strict lockdowns in early May.

The question now is how long it will take to see demand back up at around the levels seen in 2019. According to the top executives at some of the world’s top oil trading houses, we have already seen the bottom of demand loss. Still, the recovery could take more than a year.

Torbjörn Törnqvist, chairman and CEO at Gunvor Group, told Bloomberg’s Javier Blas that the market would take a long time to rebalance and oil prices would stay capped at around $40 a barrel until late in 2021.

According to the International Energy Agency’s (IEA) latest estimates as of early May, global oil demand is set to drop by a record 9.3 million bpd in 2020 from 2019. The demand destruction in Q2 would be 23.1 million bpd, while the recovery in the second half of 2020 will only be gradual.

“Nonetheless, demand is not expected to reach pre-crisis levels before the end of the year, with December demand projected to be down 2.7 mb/d from December 2019 levels,” the IEA said last week.

By Tsvetana Paraskova in Oilprice.com

Additional Oil Market commentary & Data

Available from BBC Market Data

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

Can you remember the last time
oil prices were this low?

Oil prices are currently the lowest they've been in years. There's a surplus in the global market which is driving down prices at the petrol pump for your vehicle and for your domestic tank in the garden.

Stop burning money and slash your heating bill.

Take advantage whilst you can and top up your tank today!

Oil Market, Exchange Rate and Heating Oil Price Information March 2020.

Brent Crude crashes from $52.15 to $17.30 in one month as countries lockdown to fight the spread of Covid-19.

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $51.70                Price at End of Month: $17.30

Highest Price in Month: $52.15                Lowest Price in Month: $17.30

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.2746                              End of Month: 1.2425

Kerosene (Heating Oil) Cargo Price $ per tonne       

Start of Month: $472.00                                           End of Month: $225.00

Highest Price in Month: $473.00                            Lowest Price in Month: $221.00

Market Commentary:

The combination of the Crude Oil price collapse and exchange rate movements in March have resulted in 15.38 ppl reduction in the cost of kerosene on the global markets.

COVID-19 demonstrated that you don’t need oil in a world of no consumption. Additional Oil Market commentary & Market Data available from the BBC here: Market Data

or listen to the BBC World Service Business matters podcast from the 31st March 2020: Oil price collapses to 18-year low 

Plunging demand, surging supply, and strained storage capacity have put so much downward pressure on oil prices that US shale producers are now producing at a loss.

US crude oil prices fell below $20 a barrel on Monday, close to their lowest level in 18 years, as traders bet production would have to shut to prevent a glut in the markets. The situation is particularly bleak for high-cost wells in the world's largest producer: the US.

In the podcast the BBC talk to Ellen Wald, from the Atlantic Council, in Florida, and Tom Adshead, a director of Macro Advisory in Moscow about the impact of Covid-19 on global oil markets and how this changes other industries in countries around the world. The Coronavirus outbreak has caused a rather startling change in fish consumption in Kenya. Instead of importing stocks from China, Kenyans have refound their taste for local catches, boosting incomes within the industry. And what do you do when you're in lock down? They interview David Shearer, who runs the UK puzzle exchange. He's seeing a resurgence in demand for jigsaws!

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

Are you an NHS Key Worker? We’re extending our ‘vulnerable customer delivery initiative’ to include NHS employees during the COVID-19 outbreak.

Find out more here: https://goffpetroleum.co.uk #heatingoil #vulnerablecustomers #supportthenhs #nhsworkers #nhs #keyworkers

▪️We’ll treat your delivery as if you are not even home.
▪️We will deliver your fuel directly to your outside tank while you stay inside.
▪️We will not ask you to handle anything.
▪️We will not be asking for your signature.

More information on contactless delivery procedures: https://www.goffpetroleum.co.uk/covid-19-customer-informati…

#stayinside #respectspace #heatingoil #deliveries #contactless

Could you lend a helping hand to a neighbour to ensure they get their fuel delivery?

Share the message on your local village Facebook page.

#besafe #communityspirit #helpinghand #heatingoil #stopcovid

We have had to introduce new delivery procedures. Please make yourself aware of them. If you have placed an order please keep the access clear and ensure the tank is unlocked. 

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $56.59                Price at End of Month: $50.41

Highest Price in Month: $60.28                Lowest Price in Month: $50.41

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.3182                              End of Month: 1.2773

Kerosene (Heating Oil) Cargo Price $ per tonne       

Start of Month: $517.75                                           End of Month: $461.00

Highest Price in Month: $543.25                            Lowest Price in Month: $461.00

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 4.91 ppl

Oil Market commentary:

The global crude oil market continues to reel from the slowing economic activity caused by the coronavirus (Covid-19) outbreak. Brent Crude prices are testing support at $50/b with concerns over demand hitting markets. Market commentators believe we are now in a "demand crisis" with it unclear how far demand will fall due to COVID-19.

The International Energy Agency (IEA), has slashed its oil demand growth for 2020 by 365,000 barrels a day, a 30% reduction to its previous forecast made last month and it warned that this year would be the first time in a decade that the global oil demand would contract because in 2019 China accounted for more than three-quarters of global oil demand growth.

OPEC is likely to cut production to try and prevent prices Brent Crude falling below $50/b. This is important because a clear break below $50/b. could trigger a sell-off towards $30/b. and increase the risk of a global recession.

For Middle Distillates (Heating Oil / Diesels) the fundamentals improved last week in the US for distillate with stocks falling and demand rising, however, the figures do not reflect the growing crisis in the world and potential threat to distillate demand as COVID-19 spreads across Europe.

As the key ICE Gas Oil Future has now fallen to around $450/t. a period of consolidation is likely, but if there is a major outbreak in a European or US city we expect the future to fall to $291/t. with risk of losses to $200/t.

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

Oil Market, Exchange Rate and Heating Oil Price Information January 2020.

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $66.16                Price at End of Month: $56.59

Highest Price in Month: $69.82                Lowest Price in Month: $56.59

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.3188                              End of Month: 1.3182

Kerosene (Heating Oil) Cargo Price $ per tonne       

Start of Month: $652.25                                           End of Month: $540.50

Highest Price in Month: $664.75                            Lowest Price in Month: $540.50

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 7.87 ppl

The BBC business news has a very good article on Coronavirus and oil: Why crude has been hit hard

Additional Oil Market commentary & Market Data available from the BBC here: Market Data

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:  ONS Price of heating oil

We are pleased to announce our Christmas 'Good Causes' draw winner. Well done to:

4YOUth Brightlingsea

They join our other 2019 Good Causes Winners including:

The Village Halls of Gayton near Kings Lynn, Tendring in Essex and Bunwell in Norfolk along with Feline Cat Care Rescue in East Harling.

Each won 500 litres of heating oil.

We'll be holding more draws through 2020 so keep your eyes peeled for announcements on Facebook and Twitter. 

If you have not registered your good cause yet then visit our Good Causes Page.

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $63.61                Price at End of Month: $66.52

Highest Price in Month: $69.75                Lowest Price in Month: $63.24

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.2922                              End of Month: 1.3247

Kerosene (Heating Oil) Cargo Price $ per tonne       

Start of Month: $611.00                                           End of Month: $651.25

Highest Price in Month: $661.75                            Lowest Price in Month: $604.50

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 3.22 ppl

Oil Market commentary & Market Data available from:

http://www.bbc.co.uk/news/business/market_data/commodities/default.stm

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here: 

https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/kj5u/mm23

An eventful 2019 wraps up a decade of turmoil in oil markets, in which Brent Crude prices fluctuated from as high as US$125 a barrel in 2012 to as low as US$30 per barrel in January 2016.

Geopolitical turmoil, economic growth, soaring U.S. shale production, and OPEC’s various policies to try to set the trends in oil prices marked the decade which is drawing to a close.

For the decade beginning in 2020, the key factors determining the price of oil are likely to be similar to those we have seen over the past decade writes, Andy Critchlow, Head of News, EMEA at S&P Global Platts.

The state of the global economy, U.S. oil production and exports growth, and the OPEC+ alliance between the cartel and a dozen non-OPEC producers led by Russia will continue to influence the price of oil through 2030.

Geopolitical flare-ups and U.S. sanctions policies toward major oil producers, including Iran and Venezuela, will also shape the supply side of the market over the next few years.

On the demand side, the growing share of renewables in the energy mix and the increased use of electric vehicles (EVs) will begin to displace meaningful volumes of fossil fuel demand in power generation and oil demand in transportation over the next decade, many analysts say. Growing climate concerns may also start impacting investment decisions in new fossil fuel production, including oil.

The fundamental supply and demand picture will likely be ‘more of the same’, but the push and policies toward greener economies could be the new factor shaping oil markets and influencing oil prices over the next decade.

According to S&P Global Platts Analytics, alternative energy—including renewables, higher EV penetration, and hydrogen use “will limit the overall call on fossil fuels" with the International Energy Agency (IEA) predicting global oil demand peaking in the mid-2020s and flatten out in the 2030s. 

“Oil demand for long-distance freight, shipping and aviation, and petrochemicals continues to grow. But its use in passenger cars peaks in the late 2020s due to fuel efficiency improvements and fuel switching, mainly to electricity. Lower battery costs are an important part of the story: electric cars in some major markets soon become cost-competitive, on a total-cost-of-ownership basis, with conventional cars,” said the IEA in it's World Energy Outlook Report

Unsurprisingly, OPEC continues to see oil as the fuel with the highest share in the global energy mix through 2040. The Organization of the Petroleum Exporting Countries expects EVs to hold a share of just 13 percent of the global car fleet in 2040 and sees the majority of the growth still coming for conventional internal combustion-engine vehicles.

OPEC has also been warning since the oil price crash in 2015-2016 that reduced investments in conventional oil after the price plunge will start to impact global oil supply in the 2020s. Through 2040, the world will need US$10.6 trillion in total investments in oil, OPEC said in its World Oil Outlook 2019 in November.

In the new decade, OPEC and its allies in the current OPEC+ pact will have to reckon with U.S. shale production, where growth is slowing these days as prices remain bound in a narrow range. But U.S. production will still grow in 2020, by more than 1 million bpd, according to nearly all major forecasts. U.S. shale production is expected to start declining in the middle or late 2020s, according to OPEC’s estimates.

The OPEC+ alliance will be tested as early as this coming March, when the partners are meeting to discuss how to proceed with their production cuts.

The coming decade will also test how (ir)relevant OPEC is on the global oil market, considering the supply growth from countries outside the production pact, the rising share of renewables and EVs amid falling technology costs, and growing concerns about climate change.

Global economic growth and recessions will undoubtedly also impact oil demand and oil prices over the next decade. So will the ever-restive Middle East with the Saudi-Iran antagonism and global powers vying for influence in a region home to one fifth of the world’s daily oil supply.

Source: Oilprice.com

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $59.15                Price at End of Month: $62.89

Highest Price in Month: $65.37                Lowest Price in Month: $59.15

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.2949                              End of Month: 1.2935

Kerosene (Heating Oil) Cargo Price $ per tonne       

Start of Month: $618.50                                           End of Month: $607.75

Highest Price in Month: $632.75                            Lowest Price in Month: $607.75

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 1.49 ppl

Oil Market commentary & Market Data available from:

http://www.bbc.co.uk/news/business/market_data/commodities/default.stm

The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here:

Oil Market, Exchange Rate and Heating Oil Price Information October 2019.

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $59.88                Price at End of Month: $59.15

Highest Price in Month: $61.79                Lowest Price in Month: $57.74

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.2223                              End of Month: 1.2940

Kerosene (Heating Oil) Cargo Price $ per tonne       

Start of Month: $629.50                                           End of Month: $608.25

Highest Price in Month: $637.75                            Lowest Price in Month: $608.25

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 3.64 ppl

NOTE : The exchange rate has driven the bulk of the price movement whilst crude has been relatively flat – not breaking $62

A trade war between China and the United States has been weighing on the demand outlook for oil.

Leaders from the United States and China encountered a new obstacle in their struggle to end the trade conflict when the summit at which they were supposed to meet was cancelled because of violent protests in Chile, the host nation.

A Reuters survey showed that oil prices are likely to remain pressured this year and next. The poll of 51 economists and analysts forecast Brent crude would average $64.16 a barrel in 2019 and $62.38 next year.

The U.S. Federal Reserve cut interest rates for a third time this year on Wednesday, looking to bolster economic growth with a move that could also boost demand for crude.

Oil Market commentary & Market Data available from:

http://www.bbc.co.uk/news/business/market_data/commodities/default.stm

I first met Brian when he worked with Kevin, Lionel, Len, David and Stuart on the four wheel domestic delivery tankers that operated from our Mile Cross depot in Norwich.

Always a cheery face to have in the yard he was loved by the North Norfolk customers he served all winter long.

As our business and delivery area grew, Brian was one of the first drivers to use a six wheeler for domestic deliveries in far off places like Suffolk. "They will never work" they used to say but Brian was one of the men that proved them wrong; now six wheelers make up the bulk of our domestic heating oil delivery fleet as our routes are longer and our customer base more widely spread.

For the last few years Brian has run with the artic fleet collecting fuel from terminals and refineres across East Anglia and delivering it into our depot network.

We wish you well in your retirement as you hang up your hose. You will need plenty of drive in the tank to keep up with your new cockerpoo puppy which I am sure will keep you smiling for many years to come. 

Thank you  

Oil Market, Exchange Rate and Heating Oil Price Information September 2019.

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $59.09                Price at End of Month: $59.88

Highest Price in Month: $68.23                Lowest Price in Month: $58.00

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.2062                              End of Month: 1.2305

Kerosene (Heating Oil) Cargo Price $ per tonne       

Start of Month: $594.00                                           End of Month: $640.75

Highest Price in Month: $686.25               Lowest Price in Month: $590.25

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 5.16 ppl

September was a most exciting month on the oil market with significant price moves experienced as a result of the strike at the Saudi Oil Processing Facility. 

Oil Market commentary & Market Data available from:

http://www.bbc.co.uk/news/business/market_data/commodities/default.stm

Due to the incredible response and over 1,000 shares we have decided to give 1,000 litres of heating oil away.

So both Tendring Village Hall and Bunwell Village Hall have won 500 litres of heating oil.

We will be in touch with both Village Halls shortly.

The Poll is now closed and any future votes will be displayed but will not count.

If your village hall was not in the draw, keep your eyes peeled as we intend to have another draw next week. If you wish to find out more about Goff Heating Oil supporting Good Causes or enter your village hall for a future draw you can do so here.

Saudi Arabia is the world’s biggest oil exporter and the attack on state-owned producer Saudi Aramco’s crude processing facilities at Abqaiq and Khurais has cut output by 5.7 million barrels per day. The company has not given a timeline for the resumption of full output.

A source close to the matter told Reuters the return to full oil capacity could take “weeks, not days.”

Saudi Arabia’s oil exports will continue as normal this week as the kingdom taps into stocks from its large storage facilities, an industry source briefed on the developments told Reuters on

“We think the attacks would be a wake up call for investors, who have failed to price in risk within the price of crude. Although global supply will contract in the near term, the United States has the ability to supply this contraction,” said Hue Frame, managing director at Frame Funds in Sydney.

“With developments over the weekend, market participants will add additional factors when working out the fair value of crude on top of the usual supply and demand factors.”

U.S. President Donald Trump said he approved the release of oil from the U.S. Strategic Petroleum Reserve (SPR) if needed in a quantity to be determined due to the attack.

The attack on plants in the heartland of Saudi Arabia’s oil industry, including the world’s biggest petroleum-processing facility at Abqaiq, came from the direction of Iran, and cruise missiles may have been used, according to a senior U.S. official. Initial reports indicated the attack came from Yemen.

Trump also said the United States was “locked and loaded” for a potential response to the attack on Saudi Arabia’s oil facilities.

“A geopolitical risk premium will return to the oil price,” said Alan Gelder, vice president for refining, chemicals and oil markets at Wood Mackenzie.

“This attack has material implications for the oil market, as a loss of 5 million barrels per day of supplies from Saudi Arabia cannot be met for long by existing inventories and the limited spare capacity of the other OPEC+ group members,” he said.

Saudi Arabia is set to become a significant buyer of refined products after the attacks, consultancy Energy Aspects said in a note.

Saudi Aramco will likely buy significant quantities of gasoline, diesel and possibly fuel oil while cutting liquefied petroleum gas exports.

U.S. gasoline futures rose as much 12.9%, while U.S. heating oil futures rose by as much as 10.8%. China’s Shanghai crude oil futures rose to its trading limit, gaining 8% at the open.

Meanwhile, Saudi Aramco has told one Indian refinery there will be no immediate impact on oil supplies as it will deliver crude from other sources and has adequate inventory, a source with the refinery said.

U.S. President Donald Trump said on Sunday the United States was “locked and loaded” for a potential response to the attack on Saudi Arabia’s oil facilities, after a senior U.S. administration official said Iran was to blame.

Trump also authorized the use of the U.S. emergency oil stockpile to ensure stable supplies after the attack, which shut 5% of world production and sent crude prices soaring more than 19% in early trade on Monday, before moderating to show a 10% gain.

Tuesday Market Update:

Oil prices are trading higher once again this morning as traders continue to buy oil following the major attack on Saudi Aramco's key crude processing facility on Saturday morning.

However, the trading is not as aggressive this morning following measured comments from President Trump. Saudi Arabia has declined in importance to the US compared to twenty years ago due to two facts: 1. The Pentagon believe the attackers who flew the plans into the Twin Towers on September 11th came from the Kingdom of Saudi. 2. The US is no longer dependent on imports of Saudi Arabian crude oil. The US now imports less than 5% of it's needs from from Saudi.

Last night President Trump said that "he has not promised protection to the Saudi's but would certainly help them." He added that "he is not looking to get into a new conflict but sometimes you have to." Mr Trump went on to say that "he is in no rush to respond to the attacks, oil prices have not risen too much in the wake of the attacks on the Saudi oil plants." With regard to the emergency reserves, President Trump said that the US can release oil and bring prices down but other countries could "be a little more generous".

In summary, we believe the US regard this crisis as "not their problem," and they consider that Saudi has failed to safeguard their key assets and are reluctant to get involved. 

To find out more about heating oil prices click here, or to get an online quote click here. At Goff, our team constantly check prices to ensure we're giving you the best price possible for your home heating oil.

Source: BBC News & Fuelpricesonline

By analysing current sea temperatures and weather systems over the north Atlantic scientists are able to predict what is to head our way in four month's time - and it's going to be very cold. 

The scientists analysed sea temperatures and weather systems over the north Atlantic before reaching their predictions, The Sunday Times reports. They believe freezing Arctic air is set to descend on the UK in the first months of next year as the Gulf stream will sidestep Britain, leaving us without the rise in temperature it normally brings to the British Isles from the Atlantic and Caribbean sea.

These researchers; attempting to predict one of the longest-range UK weather forecasts, say temperatures will be colder than normal during January and February 2020. The scientists forecast an average temperature of 3.9C for January to February 2020 in central England – which they say is 0.5C below the 1981-2010 average for the same period.

The team, led by Mark Saunders, professor of climate prediction at University College London, wrote in a paper: “This would rank 2020 January-February central England as the coldest winter since January-February 2013.

“It would also rank January-February 2020 as the seventh coldest winter in the last 30 years, and the 23rd coldest winter since 1953.”

“There is a 57 per cent chance the central England temperature will be colder than the 4.1C in 2018, thus making it the coldest January-February since 2013,” they added.

They hope their extended forecast will help the UK anticipate the upcoming risk and plan ahead.

The Beast from the East brought widespread snow and ice in 2018, causing temperatures to plummet to -14C in the Cairngorms in Scotland. Seventeen people were killed because of the weather, including a seven-year-old girl.

The coldest winter in three decades could follow closely on the heels of the highest-ever UK temperature, recorded as 38.7C at Cambridge University Botanic Garden on 25 July.

Forecaster Craig Snell said the Met Office could only give a long-range forecast for autumn up to the end of November.

He told The Independent: “Next month it will start going into winter. The trends at the moment look like temperatures and rainfall as a whole will come out just above average. The average maximum temperature for the UK is about 12C and we expect about 325mm of rain.”

Oil Market, Exchange Rate, and Heating Oil Price Information Aug 2019.

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $63.97                Price at End of Month: $59.09

Highest Price in Month: $63.97                Lowest Price in Month: $55.18

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.219                                End of Month: 1.2159

Kerosene (Heating Oil) Cargo Price $ per tonne       

Start of Month: $630.00                                           End of Month: $603.25

Highest Price in Month: $630.00                            Lowest Price in Month: $582.00

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 4.11 ppl

Oil Market commentary & Market Data available from:

http://www.bbc.co.uk/news/business/market_data/commodities/default.stm

Global Markets Review 

• August saw global stock markets decline while perceived safe haven assets such as bonds outperformed amid escalating worries over trade and growth. A closely-watched US bond market indicator suggested rising recession risk.

• In the US, shares fell amid growth worries. The Treasury yield curve inverted for the first time since 2007, magnifying concerns that the economy may be heading into recession.

• Eurozone shares ended lower in August. Weak economic data from Germany contributed to heightened worries over global growth.

• Shares fell in the UK, although defensive areas such as healthcare and utilities outperformed. The prospect of a no-deal Brexit rose with the government unveiling plans for a lengthy prorogation of parliament.

• Japanese shares fell, mirroring the currency market as the yen moved sharply higher against the dollar early in the month.

• Emerging market equities declined as trade tensions escalated. Those markets most sensitive to US dollar strength came under pressure. These included Turkey and South Africa, but also Argentina where a surprise primary election result triggered a major sell-off in shares and the currency.  

  UK equities fell over August. Sterling recovered some ground lost in July but fell in the final week of the month. The prospect of a no-deal Brexit rose with the government unveiling plans for a lengthy prorogation of parliament.

• The commodity markets, and oil especially, is extremely sensitive to growth figures with fears of recession impacting global demand. Crude oil fell 7.7%, with demand concerns outweighing ongoing supply risks which are mainly driven by political events. The £ to $, and to a lesser extent £ to Euro, exchange rate fluctuations were significanly turbo charged by the UK Government's attempts to deliver Brexit.  

•  

Goff Heating Oil serve more than 70,000 homes, farms, schools and businesses direct with heating oil. We wouldn’t be able to do this without a very high level of customer service and quick delivery times.

This month Goff Heating Oil were delighted to reach a landmark of 4,000 reviews on the independent review site Trustpilot. We are delighted to have earned an overall five-star rating from our verified customers, with 96% giving us positive reviews, 84% calling our service ‘excellent’.

Our service is something that we take very seriously, and we continue to work hard to ensure that every customer gets the best service possible. This year we are launching a number of internal processes to try and raise our service levels even higher and this is a continuous process as we strive to be the best we can.

We aim to provide the Best Price & Service... and these independent reviews show that we are heading in the right direction.

See our latest reviews on Trustpilot: We don’t rest on our laurels and read all the feedback we receive to continually try to provide the best service we can for our valued customers.

Oil Market, Exchange Rate, and Heating Oil Price Information July 2019.

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $64.88                Price at End of Month: $63.97

Highest Price in Month: $67.41                Lowest Price in Month: $60.98

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.265                                End of Month: 1.2159

Kerosene (Heating Oil) Cargo Price $ per tonne       

Start of Month: $639.75                                           End of Month: $649.50

Highest Price in Month: $657.25                            Lowest Price in Month: $620.75

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 2.95 ppl

Losing heat or “sooting up” is not uncommon; let’s have a look at the possible causes…..

By far the most common is over fueling. Most of the time excessive soot becomes an issue after a service. Oil cookers use the wicks only to get going. After this the heat from the shells vaporises the oil as it arrives in the burner base. This vapour burns cleanly and relatively efficiently. Sometimes though after a service, when everything is newly cleaned, too much oil can arrive at the burner base even though the flow rate settings on the valve have not been changed. Of course if the valve has failed the same issue can present itself. When this happens the oil cannot vaporise fast enough and it begins to burn directly. This, as you can imagine, is inefficient, sooty and a messy business!

To solve this issue you'll need to get your engineer to adjust the flow rates on your control valve downwards. The original valves were made by BM, but these have now been superseded by a valve made by Toby. Whilst they are a like for like swap they do require calibration to the appliance.

A similar issue is if the burner base has been re-installed lower after a service. The increased depth of the oil will again cause the oil to burn directly. You'll get a yellow flame - not a lovely efficient blue one! A yellow flame is a sooty flame and thus the burner base needs to be recommissioned and levelled again basically to solve this!

After over fueling the next most common cause of a sooty and low temperature Aga range cooker is a change to the flue. Insufficient draw means the carbon that forms as an inevitable by-product of combustion does not form in the 'right' place. Your flue draw can change for many reasons even if you don’t change the length of it. Maybe a bird has disturbed or knocked a cowl off, maybe the tree you chopped down exposed the flue to more wind or maybe your neighbours conservatory has left it becalmed - all of these can ruin the careful balance in your range cooker and make your flue draw too high or too low. Too high and your range cooker will run cool and struggle to reach temperature, too low and it’ll ‘soot’ up quickly – it can be a difficult balance!

Often engineers will blame ‘low sulphur’ fuel (cleaner fuels have been legislated for by governments to reduce carbon and air pollution!) but most range cookers have been running perfectly well on these lower sulphur fuels supplied by global refineries for over a decade. So before you start blaming fuel quality or trying expensive fuel additives and the like have a think about what, if anything, could have changed your flue conditions or have caused over fueling!

A key point to remember is “bad oil” cannot be chemically changed to “good oil” by adjusting the appliance that burns it; if the Aga is not working correctly before a visit by an experienced engineer, but properly afterwards, or alternatively was running perfectly well but then fails soon after a service then it is very clear that the cause of the problem was the appliance not the fuel or fuel supplier.

For everything you needed to know about oil fired boilers, oil tanks and heating oil deliveries, take a look at our FAQ’s and other news.

Plumbteam publish a vaporising burner servicing guide so that you can check that your engineer is doing his inside work properly. They fail to mention that inspecting the tank and tank filter is a job that your engineer should also perform at every service as poor tank condition and blocked filters can quickly impact on the fuel and the appliance burning it.

Their guide covers servicing a pot or vaporising burner, as found in AGA, Rayburn, and Stanley ranges, plus many others. Plumbteam Vaporising burner servicing guide.

Oil Market, Exchange Rate, and Heating Oil Price Information June 2019.

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $65.52                Price at End of Month: $66.22

Highest Price in Month: $66.74                Lowest Price in Month: $62.03

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.263                                End of Month: 1.265

Kerosene (Heating Oil) Cargo Price $ per tonne       

Start of Month: $597.75                                           End of Month: $642.50

Highest Price in Month: $646.75                            Lowest Price in Month: $579.00

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 4.42 ppl

After heavy losses for crude in May the slid stopped and held at a new price level of $62/b with the market focused on tensions in the Middle East after an attack on two oil tankers in the Gulf of Oman and the downing of an $130 million US spy drone in the Middle East in the vicinity of the Straits of Hormuz. It is likely the tanker attacks were carried out by the Iranians and the US are expected to deploy further military assets to the region and Trump has turned up the heat on twitter. Also prices for Brent Crude are likely hold above $60/b. in the near term, supported by the large fall in US crude stocks as reported by the DOE. Stocks fell by a massive 12.8mb on the week. Demand also increased, up 69,000 bpd on the week and 581,000 bpd on the year. Demand is up 1.8% on the year based on a four week average.  In the medium term attention is turning to the OPEC meeting which is taking place today and tomorrow in Vienna on the back of the G20 in Japan where the US and China agreed a truce in the trade war and Saudi and Russia agreed an extension to the output curbs. OPEC is expected to formally approve the extension at the meeting in Vienna, but with a weather eye on the health of the global economy.

In an article published by oilfiredup Nicholas Hayes, Irish executive member of the UK-based Federation of Petroleum Suppliers (FPS), whose members handle more than 75% of kerosene central heating oil in Ireland, said: 

“We are very concerned at the perilous situation which could develop, as we have to import 85% of our oil, with the remainder coming from the refinery in Cork, a significant amount of our oil comes from UK refineries.”

Mr Hayes, who has been involved in the industry since 1982, said that at present, Kerosene is 13c per litre dearer in the Republic of Ireland than in the North of Ireland, due to levies and taxes.

However, he warned that this price gap could widen dramatically due to a change in the border situation, depending on how Brexit pans out.

“What could happen to fuel costs is frightening to contemplate,” said Mr Hayes.

It is estimated that up to €1,200 is spent annually on fuel to heat an average three-bedroomed semi- detached house in Ireland.

Mr Hayes said: “Up to 775,000 homes in the Republic — or 43% of our housing stock — use oil for heating.”

“The next-highest user of oil for home heating is Germany, with 25% of houses heated by oil”

“So this gives an indication of how exposed we are to any change in the costs of importing oil, due to only about 15% being refined in the country.

Mr Hayes concluded:“In my time as the sole Irish executive director on the FPS, when I have seen how developments in the Middle East hit oil supply and costs, where we in this country are right now is the most worrying I have experienced.”

The situation in England, Wales, and Scotland isn't really any clearer, but the discussions about they strength and the type of boarder needed in Ireland on the only land boarder with the EU does nothing to clarfiy the impact of Brexit on the UK's liquid fuel energy sector.   

Oil Market, Exchange Rate, and Heating Oil Price Information May 2019.

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $71.95                Price at End of Month: $65.52

Highest Price in Month: $74.76                Lowest Price in Month: $65.52

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.3082                              End of Month: 1.2604

Kerosene (Heating Oil) Cargo Price $ per tonne       

Start of Month: $666.25                                           End of Month: $613.25

Highest Price in Month: $700.50                            Lowest Price in Month: $613.25

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 4.89 ppl

Oil prices have fallen since the middle of May with crude markets racking up their biggest monthly losses in six months amid stalling demand and as trade wars fanned fears of a global economic slowdown. Oil prices slid on fresh trade worries after U.S. President Donald Trump stoked global trade tensions by threatening tariffs on Mexico, which is one of the largest U.S. trade partners and a major supplier of crude oil.

Last month’s crude oil price fall of more than 10% was the worst May performance in seven years as the escalation of the global trade war saw the global growth outlook crumble.

The U.S.-China feud remains most critical to the global growth outlook, but the addition of trade tensions between the U.S. and Mexico raised the slower demand picture for the Americas.

Iran and the United States have been drawn into starker confrontation in the past month, a year after Washington pulled out of a deal between Iran and global powers to curb Tehran’s nuclear programme in return for lifting international sanctions.

Washington re-imposed sanctions last year and ratcheted them up in May, ordering all countries to halt imports of Iranian oil. In recent weeks it has also hinted at military confrontation, saying it was sending extra forces to the Middle East to respond to an Iranian threat.

Source: fuelpricesonline.com

Additional Oil Market commentary & Market Data available from the BBC here.

Oil Market, Exchange Rate, and Heating Oil Price Information April 2019.

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $69.22                Price at End of Month: $72.50

Highest Price in Month: $74.38                Lowest Price in Month: $69.22

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.315                                End of Month: 1.304

Kerosene (Heating Oil) Cargo Price $ per tonne       

Start of Month: $646.50                                           End of Month: $668.75

Highest Price in Month: $681.50                            Lowest Price in Month: $646.50

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 1.58 ppl

Exchange Rate:

Sterling has traded in a narrow range of $1.28-$1.30 since Britain last month pushed its scheduled departure from the European Union back from March until Oct. 31.

But the currency hit a two-week high on Tuesday 30^th April and has been nearing $1.31, helped by comments from Prime Minister Theresa May suggesting a rapprochement in talks with the main opposition Labour Party.

Oil Market:

Oil prices have fallen in the past week, from their highest price in 2019, as the pressure of record U.S. output levels continues to weigh on the market.

U.S. crude oil production reached a record 12.3 million barrels per day (bpd) last week, rising by around 2 million bpd over the past year. U.S. crude exports broke through 3 million bpd for the first time this year, according to data from the Energy Information Administration.

Analysts say U.S. supply will rise further as its export infrastructure is improved.

One of the things that we can see in the near future is the de-bottlenecking of the Permian basin in the U.S. through new pipelines and export capacity. This will connect the world’s largest shale basin to the global oil market.

Rising U.S. oil production has helped offset some of the disruptions from U.S. sanctions against Iran and Venezuela, and from supply cuts led by the Middle East-dominated producer club of the Organization of the Petroleum Exporting Countries (OPEC), which started in January.

Despite these disruptions and sharp oil price rises in the first months of this year, some analysts say the long-term price risk to crude oil is skewed to the downside.

Economist said the 130 percent rise in U.S. production due to the shale oil revolution during the past decade had created a strong and constant downside risk to oil prices.

Source: fuelpricesonline.com

Additional Oil Market commentary & Market Data available from the BBC business website.

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $63.81                Price at End of Month: $68.07

Highest Price in Month: $68.07                Lowest Price in Month: $63.81

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.3243                              End of Month: 1.3031

Kerosene (Heating Oil) Cargo Price $ per tonne       

Start of Month: $632.00                                           End of Month: $626.00

Highest Price in Month: $643.25                            Lowest Price in Month: $619.75

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 1.21 ppl

Oil Market commentary & Market Data available from:

http://www.bbc.co.uk/news/business/market_data/commodities/default.stm

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $62.05                Price at End of Month: $65.13

Highest Price in Month: $67.14                Lowest Price in Month: $60.88

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.3093                              End of Month: 1.3301

Kerosene (Heating Oil) Cargo Price $ per tonne       

Start of Month: $599.75                                           End of Month: $643.00

Highest Price in Month: $642.00                            Lowest Price in Month: $597.25

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 2.84 ppl

Oil Market commentary & Market Data available from:

http://www.bbc.co.uk/news/business/market_data/commodities/default.stm

Crude Prices and Production Cuts:

Crude prices made gains this month with Brent gaining considerably. Bullish support for crude production cuts came from OPEC. Iran, Libya and Venezuela continued their unwilling contribution to the cuts despite being exempt from the deal and are producing 900kbpd less than when the deal was struck. This, coupled with a strong performance from the core OPEC members, led by Saudi Arabia brought overall OPEC supply 800kbpd below the targeted quota. The Saudis provided further momentum as they promised to perform over and beyond with Al-Falih announcing an additional 500kbpd of cuts in March suggesting that the market may continue to tighten.

Concerns Over Global Economics:

However, not all is as rosy as OPEC will like to paint it. As concerns grow over the global economic situation, oil demand forecasts continue to be reduced with demand growth expectations for the year reduced by another 60kbpd this month. There is also the additional issue of growing Non-OPEC production with US leading the charge with an expected production growth of 1.8mbpd this year. So while OPEC may be able to tighten the market by cutting production, how much market share are they willing to give up to support prices?

The Trump Effect:

And of course, there is Trump. To our bewilderment, Trump took centre stage in the oil market again this month via a single tweet: “Oil prices getting too high. OPEC, please relax and take it easy. World cannot take a price hike – fragile!” That was all it took for Brent to collapse almost $3/bbl! Impressively, these 20 words signifying Trump’s wishes had more impact on the oil market than Al-Falih’s commitment to a 500kbpd production cut. Really makes one wonder what the market is thinking while it does its thing. So are oil fundamentals more legitimate than Trump's twitter feed? One thing is for certain, political intention is going to continue to play a major role in the oil market for the foreseeable future.

Cold start to the month but by the end the weather turned very sunny and mild. 17.7°C was recorded on 26th the highest I have recorded in February.

Oil Market, Exchange Rate, and Heating Oil Price Information January 2019

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $53.90                Price at End of Month: $62.26

Highest Price in Month: $62.38                Lowest Price in Month: $53.16

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.2602                             End of Month: 1.314

Kerosene (Heating Oil) Cargo Price $ per tonne       

Start of Month: $562.25                           End of Month: $619.75

Highest Price in Month: $619.75             Lowest Price in Month: $557.75

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 3.28 ppl

Oil Market commentary & Market Data available from:

http://www.bbc.co.uk/news/business/market_data/commodities/default.stm

THE OMJ energy roadmap commentary from last week:

Heating Oil / Diesels

The fundamentals for kero / diesels improved last week with stocks falling and demand rising. Stocks should have posted the seasonal peak and fall until May. Demand increased on the week and year but should moderate over the next few weeks. With the ICE Gas Oil Future in the middle of the $550-590/t. trading range we expect further price consolidation with the cold snap in the US and NWE providing a supportive backdrop and limiting the scope of the negative short term graphs.

Gasoline

The fundamentals for gasoline were little changed last week with the days cover holding near the 12 month high. Stocks continue to spike higher and demand remains weak. However, we are nearing the end of the current cycle. Stocks will likely peak in the next few weeks and demand has most likely bottomed out. As a result we are now heading towards the annual St. Patrick's Day rally.

Crude Oil

US crude stocks continue to rise as surging US production and reduced refinery intakes add to the stock surplus. Crude stocks are extending higher above the five year average and the level seen year. Crude stocks should continue to rise over the next few months. However, attention is turning to Venezuela with traders worried the US will ban the import of Venezuelan crude.

Weather

NWE: TWO WEEK OUTLOOK EXTREMELY COLD.

US: TWO WEEK OUTLOOK EXTREMELY COLD FOR THE US EAST COAST

Source: The Oil Market Journal subscription service

Sadly Matthews dad passed away in March 2010 after a short battle with a very aggressive case of Motor Neurone Disease. During his treatment the Motor Neurone Disease Association really supported the family both financially and emotionally giving Dad the very best in care, they continue to both support families affected by this terrible disease whilst striving to find a cure.

Having competed in triathlons for over 20 years and now within weeks of his 40th Birthday Matthew has used the freed-up cash from a year’s free heating oil to sign up for a number of events to help raise awareness and funds for Motor Neurone Disease Association.

You will be able to see Matthew in action and support him along the way as he takes on this schedule of gruelling events,

7^th April British Triathlon standard distance Duathlon Championship

14^th April Schneider Electric Marathon de Paris 2019

26^th May IRONMAN 70.3 St.Pölten Austria

7^th July Outlaw Holkham Half Ironman

If all goes well he will hopefully have qualified for World Triathlon Ironman 70.3 World Championships in Nice on 8th September.

Matthew said “ Winning free heating oil for a year makes a massive difference to our family and I can now confidently enter these events, knowing that the house will be nice and warm all year, thanks Goff “

The team here at Goff wish Matthew all the best and look forward to hearing how he is getting on later in the year.

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $60.31                Price at End of Month: $50.18

Highest Price in Month: $61.68                Lowest Price in Month: $50.18

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.276                                 End of Month: 1.269

Kerosene (Heating Oil) Cargo Price $ per tonne       

Start of Month: $614.50                                           End of Month: $538.50

Highest Price in Month: $626.00                            Lowest Price in Month: $538.50

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 5.29 ppl

Oil Price Predictions for 2019: 

Economic headwinds pose the most crucial factor for the oil price in 2019

according to Nick Cunningham in his article for Oilprice.com.

The oil market is understandably in a state of suspense this week (written 5^th Dec 2018), eagerly fixated on the events unfolding in Vienna. But regardless of what happens, the market is in for a potentially rough ride as we head into 2019, with a series of economic headwinds threatening demand.

The S&P 500 is set to peak, corporate earnings are expected to slow, inflation could edge up and U.S. fiscal stimulus is set to fade, according to a recent 2019 forecast from Bank of America Merrill Lynch. The report lays out a series of predictions for next year, many of which center around global economic uncertainty.

The main themes of the report are of a slowing economy in the U.S., combined with already slow growth elsewhere. Global GDP growth is expected to dip from 3.8 percent this year to 3.6 percent in 2019.

In Europe, political and economic stress continues. France has recently been rocked by fuel tax protests. Brexit negotiations are entering a critical phase and Italy is fighting with Brussels over its budget deficit. Germany saw its GDP contract in the third quarter, as did Japan.

China is also facing slower growth. The trade war could flare up once again after the much-heralded Trump-Xi truce expires in three months. In fact, as the details on the most recent trade ceasefire faced more scrutiny, the deal started to look a little hollow. Trump took to twitter, perhaps after he realized that China’s concession were not rock solid, and said that he was “a Tariff Man,” warning them to follow through.

Ultimately, the prospect of a renewed trade war is alive and well, and along with it, downside risks to the global economy.

“The BofA Merrill Lynch Research team is bearish stocks, bonds, and the U.S. dollar; bullish cash and commodities; and long on volatility,” the investment bank said in its report regarding the 2019 outlook.

One of the key backdrops for the global economy in 2019 will be “an unprecedented level of global monetary policy divergence as the U.S. Federal Reserve continues to hike interest rates and other major central banks don’t,” Bank of America Merrill Lynch said in a report. The Fed has been steadily hiking interest rates while the European Central Bank has held off.

The dollar has gained significantly this year as a result, which has ultimately spread volatility throughout emerging markets, weakening currencies and contributing to a flare up in financial stress. Many breathed a sigh of relief when U.S. Fed chairman Jerome Powell seemed to revise his outlook recently, noting that interest rates are close to what the central bank views as “neutral.” Just a month ago he said that rates were very far from neutral. The slight change in wording suggests the Fed could take a less hawkish view on monetary policy, which could be good for growth and may support a weaker dollar.

As such, it’s not all bad news. BofAML says that emerging markets are so oversold that they could see a big rebound in 2019, helped along by a weaker dollar.

Nevertheless, the economic headwinds look much more formidable heading into next year than they did at the start of 2018.

The implications for the oil market are profound. OPEC+ is trying to get a handle on a burgeoning supply glut, which has been made worse by downward revisions in demand. Still, global oil demand has been affected much less than might be implied by the bout of economic volatility that has unfolded recently. The IEA has twice revised its 2018 figures down, but only by around 200,000 bpd. In its November Oil Market Report, the agency noted that “a deteriorating outlook for the global economy is largely offset by the fall in Brent crude oil prices.” In other words, oil prices fell because a worsening economy implied lower demand, but lower prices themselves helped keep demand aloft.

As a result, oil prices might not necessarily fall from current levels even though the economy could take a turn for the worse. “We forecast Brent and WTI crude oil prices to average $70 and $59 per barrel, respectively in 2019,” BofAML concluded.

Source: Nick Cunningham writing for Oilprice.com 

With the nights drawing in and the weather turning colder, households could miss out on significant savings if they forget to adjust their heating system for the change in temperature.

Poor energy use, in particular leaving heating and lights on by mistake for just four hours a week, is estimated to cost on average £250 per home every year.

In response OFTEC, the trade association for oil heating, has issued advice to households on how to avoid these expensive mistakes by highlighting some of the most common winter heating myths:

Myth 1: Turning the thermostat up high will warm the house more quickly.

Fact: When the weather outside gets really cold, you may be tempted to turn your thermostat up to a high temperature – but you shouldn't need to do this. The house will warm up at the same speed, regardless of what you set it to.

Myth 2: It's cheaper to leave your heating running at a low temperature than constantly turning it off and on when it gets cold.

Fact: Having your heating on when it's not needed will cost you money so turn it off if it's not being used! Instead, adjust your timers so it comes on only when you want it to.

Myth 3: Turning down individual radiators will save you money.

Fact: This is not necessarily the case. If your thermostat is on, radiators will keep working until the room reaches the set temperature. If you want to save money, turn off radiators in rooms you aren't using. However, keep your main rooms heated as living in a cold house can be bad for your health.

Myth 4: Your water needs to be constantly heated during the day or it'll be cold.

Fact: If your water tank is well insulated it will stay warm for several hours. Set your timers so the water is heated an hour or so before you need it at two or three different times of the day.

Myth 5: Only have a technician look at your boiler if it's not working correctly.

Fact: Have your heating system serviced once a year to check it is working correctly and efficiently – this will help avoid a costly repair bill during winter. Make sure you use an OFTEC registered technician who will follow strict industry safety standards.

Malcom Farrow from OFTEC advises:

"With temperatures beginning to drop rapidly, the temptation is to crank up the heating to the highest setting. However, this can be a costly mistake to make at an already expensive time of year with Christmas just around the corner.

"So, we've set out the facts to bust some of the biggest winter heating misconceptions and help households reduce their energy use and save money on their fuel bills."

OFTEC (the Oil Firing Technical Association) is the trade and marketing body for the oil fired heating and cooking industry in the UK and the Republic of Ireland.

Source: OFTEC Top heating myths busted as households prepare for winter weather

Our regular prize draws are open to all good causes and once you have entered you will go into all future draws.

If you are one of our lucky winners, you can choose how you claim your prize of 500 litres of heating oil.

If you use oil in one of your buildings, then we can happily deliver this straight to you. Otherwise it can make a great prize for your next charitable auction.

If you are, or know of, a good cause that would like to win some free heating oil, please sign up on our charity page.

It's quick and easy.

Oil Market, Exchange Rate, and Heating Oil Price Information November 2018

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $71.59                Price at End of Month: $57.22

Highest Price in Month: $72.36                Lowest Price in Month: $57.22

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.297                                 End of Month: 1.276

Kerosene (Heating Oil) Cargo Price $ per tonne       

Start of Month: $714.25                                           End of Month: $595.50

Highest Price in Month: $716.75                            Lowest Price in Month: $595.50

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 6.7 ppl

Oil Market commentary & Market Data available from:

http://www.bbc.co.uk/news/business/market_data/commodities/default.stm

You usually get a Winter Fuel Payment automatically if you are eligible and you get the State Pension or another social security benefit (not Housing Benefit, Council Tax Reduction, Child Benefit or Universal Credit).

If you’re eligible but do not get paid automatically, you will need to make a claim.

The deadline for claiming payments for winter 2018 to 2019 is 31 March 2019, with most payments being made automatically between November and December. You should get your money by 14 January 2019.

If you do not get your payment, call the office that pays your benefits – their details are on any letters they sent you.

Any money you get will not affect your other benefits.

Eligibility

You qualify for a Winter Fuel Payment if both the following apply:

• a) you were born on or before 5 November 1953

• b) you lived in the UK for at least one day during the week of 17 to 23 September 2018 – this is called the ‘qualifying week’

If you did not live in the UK during the qualifying week, you might still get the payment if c & d apply:

• c) you live in Switzerland or a European Economic Area (EEA) country

• d) you have a genuine link with the UK social security system, such as having lived or worked in the UK for most of your life

You can not get the payment if you live in Cyprus, France, Gibraltar, Greece, Malta, Portugal or Spain because the average winter temperature is higher than the warmest region of the UK.

You will not qualify if you:

•  - are in hospital getting free treatment for more than a year

•  - need permission to enter the UK and your granted leave states that you can not claim public funds

•  - were in prison for the whole week between 17 to 23 September 2018

•  - lived in a care home for the whole time between 25 June and 17 September 2018, and got Pension Credit, Income Support, income-based Jobseeker’s Allowance or income-related Employment and Support Allowance

Source: GOV.UK

If you are not eligible but have an eligible neighbour or relative then Age UK's guide provides more valuable information.

Oil Market, Exchange Rate, and Heating Oil Price Information October 2018

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $84.73                Price at End of Month: $75.55

Highest Price in Month: $86.23                Lowest Price in Month: $75.55

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.304                                 End of Month: 1.278

Kerosene (Heating Oil) Cargo Price $ per tonne       

Start of Month: $774.50                                           End of Month: $734.75

Highest Price in Month: $786.00                            Lowest Price in Month: $734.25

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 4.8 ppl

Oil Market commentary & Market Data available from:

http://www.bbc.co.uk/news/business/market_data/commodities/default.stm

Water can get into your home heating oil tank in a number of ways; rainwater ingress due to an ill-fitting filler cap, lose inspection lid, corroded seals, damaged vent, a split or hole in the tank or the normal itself, or more regularly through condensation build up. As outside temperatures warm up, oil tanks experience greater temperature fluctuations which will pull moisture from any air inside your oil tank and cause condensation to accumulate on its inside walls. Unshaded outside tanks that take on direct sunlight are especially prone to condensation.

The problem is however that whether the water is from rainwater contamination, or condensation build-up, it is all but impossible to detect from an external inspection alone. Any water that has found its way into the tank will sink to the bottom. This means it can’t be seen and removal is therefore difficult. Often, the first someone knows of their tank being contaminated is when they start having problems with their boiler or Aga that the tank feeds.

How to detect water contamination.

If you suspect that you might have water is in your heating oil tank, or you want to test it for peace of mind, then with the right equipment and a bit of know-how, it is an easy job to do. Hopefully your heating engineer is doing this for you on every service, but if you suspect not, or haven’t seen seen him for a while then you can easily do it yourself.

You will need some water finding paste (readily available on the web) and a long stick, such as a clean garden cane, that will reach all the way to the bottom of your tank.

Simply smear the paste to one end of your stick and put this end into the tank. Lower it all the way to the bottom, keeping hold of the top end so you can easily remove it. Wait for the time period given on the instructions and pull it out. If the paste has changed colour, then water has been detected and contamination is confirmed.

How to remove water contamination.

After you have checked your fuel and have found water, it is really quiet important to get rid of it as soon as you can before it gets into your boiler or Aga and causes damage. If your heating oil tank is a metal construction you will find you probably have a sludge valve at the bottom of the tank which you can use to drain off the water.

If your tank is plastic then the water needs to be “lifted” out and depending on the amount of water you have you may be able to use a water absorbent tank sponge for small volumes or have the water removed with a pump. Remember that whatever method you use the water cannot be disposed of down the drain. To dispose of it properly it will need to be taken to a local authority waste disposal site with a waste oil collection tank. Under these circumstances we would recommend an OFTEC engineer do the job, as you may also need to have the boiler feed pipe flushed and the fuel filters changed once the water has been removed.

How to reduce the potential for rainwater contamination.

Whilst it is impossible to prevent condensation it is possible to monitor the water level with dipping past and reduce the potential for rainwater to get into you tank by following these useful tips:

•Have your heating oil tank inspected by an OFTEC Registered Engineer annually

• Ensure your tank and pipework are free from signs of corrosion, oil stains, cracks and other physical damage

• Ensure the area around your tank shows no signs of leaks

• Check your oil tank for bulging as this can indicate a weakness in the exterior walls

• If your tank is bunded, make sure the bund is secure, in good condition and could hold an oil spill

• Make sure the bund is not full of water or oil and remove any leaves or other garden waste

• Ensure lids and caps are secure

• Cut back any over-hanging trees or foliage as these will drip water on to your tank after any rain has ended

Hopefully you have found this Goff Heating Oil how to guide useful and now feel more confident about keeping your heating oil tank free from water and protecting your boiler or Aga from damage. Keeping a regular eye on your tank is probably the best way to ensure you have problem-free home heating, and with the weather still proving to be as unpredictable as ever, it is definitely worth the effort.

Goff Petroleum recommend Anglia Heating Solutions, your local OFTEC registered company for installation, servicing, and maintenance, of oil fired boilers, and for safe, cost effective tank replacement. We would like to thank the engineers from Anglia Heating Solutions for their help in producing this information sheet.

You can also find a list of Registered Technicians on the OFTEC website and locate your nearest registered technician.

If we can help you with any other queries or if you have an idea for a how to guide you would like us to write then please do not hesitate to contact us.

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $77.54                Price at End of Month: $84.73

Highest Price in Month: $84.73                Lowest Price in Month: $77.54

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.2997                              End of Month: 1.3044

Kerosene (Heating Oil) Cargo Price $ per tonne

Start of Month: $733.29                                           End of Month: $770.50

Highest Price in Month: $770.50                            Lowest Price in Month: $713.50

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 4.28 ppl

Largest monthly pence per litre Kerosene (heating oil) price rise for many years taking the Kerosene price to a near four year high

Interesting Articles on the oil price this month

Oil prices are trading sharply higher with Brent Crude hitting a four year high as traders continue to aggressively buy positions ahead of the sanctions against Iran. Traders are very bullish following the decision by OPEC and Russia not to increase production to compensate for the pending loss of Iranian crude supply. As a result traders now expect crude prices to spike to $90-100/b over the next six months. Traders are also bullish following the failure of President Trump to respond the to lack of addition oil from OPEC. It appears the Trump Administration is preoccupied by other problems in Washington including the troubled appointment of a new Supreme Court judge and the Mueller investigation. However, we still believe that President Trump will order a release of the emergency reserves before the mid-term elections in November in order to chasten OPEC.

Political instability will disrupt the historical seasonal trend in oil prices and it is predicted that oil prices may buck the trend of decline in the fourth quarter this year.

https://www.marketwatch.com/story/oil-prices-usually-decline-in-the-fourth-quarter-but-may-buck-that-trend-this-year-2018-09-28

Oil Market commentary & Market Data available from:

http://www.bbc.co.uk/news/business/market_data/commodities/default.stm

In the UK the majority of heating systems are turned on in October, and heating oil customers with oil fired boilers are no different. Planning is key for all of us living in the countryside, so a quick check of our heating oil tank and central heating system should prepare us all for the shorter days and colder nights.

Is your boiler or Aga fighting fit this Autumn?

Has your boiler had its annual service and safety check? A little tender loving care goes a long way to reducing the chance of breakdowns. A service will ensure your system runs at peak performance, meaning you get the most from your heating oil stock, and also reduces the risk of potential carbon monoxide issues.

Healthy Tank

Is your tank fit too? When clearing away the Autumn leaves take a little time to check your heating oil tank and the area around it. Clear away any debris, weeds or overgrown plants from the immediate oil tank area, and make sure the path to the tank is clear for you and the delivery tanker driver.

With the area clear you can check a metal oil tank for rust, or a plastic tank for signs of damage or cracking. Make sure the pipes, filters, and fittings, including any locks, are in good condition and free of leaks. If you have any concerns then get the opinion of a professional. Speak to an OFTEC qualified engineer to see if it needs repairing or should be replaced. Finally check your oil level because it may be:

Time to Top Up

After the clocks go back prices tend to rise and delivery times get longer as the Autumnal cold bites. This Autumn heating oil prices are good so why not make the most of this by topping up before the demand, and disruption, of Winter kicks in.

So let's:

• Service Boiler
• Clear Tank
• Check Oil Level
• Order Top Up
• And kick the Winter worries away

There are some simple things you can do to support older people through the cold weather:

1. Call or visit more often if the cold weather stops your friend or family member from getting out and about. 

2. Make sure they have enough basic food items in the cupboard or freezer.

3. Pick up prescriptions if it’s too cold for them to go out.

4. Make sure they keep warm, check their oil level and order a Top Up if necessary.

5. Encourage them to get a benefits check to make sure they’re claiming everything they’re eligible for. e.g. for more on eligibility for Winter Fuel Payments Click Here.

6. And help kick their Winter worries away

Download Age UK's Winter Wrapped Up Guide to find out more ways to help someone stay warm and well.

Source: Age UK

Oil Market, Exchange Rate, and Heating Oil Price Information August 2018

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $74.37                Price at End of Month: $77.54

Highest Price in Month: $77.54                Lowest Price in Month: $68.79

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.3122                              End of Month: 1.2997

Kerosene (Heating Oil) Cargo Price $ per tonne

Start of Month: $686.25                                           End of Month: $727.25

Highest Price in Month: $727.25                            Lowest Price in Month: $672.75

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 3.01 ppl

Earlier this month we wrote an article called Whats-happened-to-summer-prices?

Whilst Oilfiredup.com published this article about the future price of oil:

Where will Oil Prices Go? Up or Down?

The Oil Business is very unpredictable– and no matter what independent analysts might suggest, no one knows exactly where crude prices will go.

While benchmark oil prices ticked lower this week, continuing a slide from nearly their highest point in four years last month we take a look at what way the price could go.

It appears the consensus among analysts is that the downturn is merely temporary. Rising global demand for oil, renewed U.S. sanctions on Iran, shrinking production and exports from Venezuela and a new regulation that’s expected to cause a surge in demand for diesel fuel will likely drive oil prices higher in the coming months.

Although economic slowdown sparked by the ongoing trade war between the U.S. and China, for example, could be among the factors that cause prices to slip, rather than climb.

Few analysts expect prices to drop anytime soon: Russia, Saudi Arabia and other major OPEC producers, reliant on oil revenues for their budgets, have largely adhered to self-imposed production caps aimed at stabilizing prices.

Prices could slip as U.S. sanctions on Iran go into place, Saudi Arabia may ramp up production to steal market share from its Persian Gulf rival, thereby putting more supply on the market and potentially suppressing prices.

President Donald Trump’s trade spat with China, and similar trade disputes with Canada, Mexico and the European Union, could cause prices to fall as well, mainly by causing a slowdown in economic activity and, therefore, demand for oil.

At the minute prices appear to be in a good position, high enough to allow drillers to bring operations back online and keep pace with rising demand but not so high that a number of rigs rush into service all at once, flooding markets and causing prices to drop.

Many analysts believe prices will continue climbing: Rising global demand, a decrease in supply from Iran due to U.S. sanctions, falling production and exports from Venezuela as a result of the country’s economic crisis and ongoing pipeline constraints in certain regions of the U.S. could allow demand to catch up with supply.

So in conclusion, are prices going to rise or fall? The answer quite simply is – it’s anyone’s guess. 

As normal Oil Market commentary & Market Data is also available from:

http://www.bbc.co.uk/news/business/market_data/commodities/default.stm

In one year, we have seen crude oil inventories go from an oversupply position to being under a huge amount of pressure due to various geopolitical factors.

Following the Executive Orders signed by President Trump yesterday, Iran sanctions are now officially starting to come into force. These sanctions could block more than 1 million barrels a day of Iran's crude exports - further constraining supply. Additionally, Saudi Arabia's exports have unexpectedly dropped between June and July causing even more concern for the rest of the year.

This has prompted a spike in prices today, however only a week ago prices had dropped assuming that Saudi was going to continue to produce.

Stewart Glickman, an energy equity analyst in New York says "If the argument now is that maybe they can't produce as much as everyone was hoping for, that puts some upward pressure on prices."

Markets can be highly volatile in the short term, even one tweet from President Trump can have a huge effect on where prices go - unfortunately even the experts can't predict that one!

So, even in the hotter months whilst we are not using so much for our individual homes - there is still a remarkable amount of activity on a global scale affecting the cost of oil to us all. To find out more about what influences prices click here.

If you have any queries or would like a quote then don't hesitate to contact us or click for a quote.

Weather Type

Reading

Diff from Monthly Average

Average Mean Temperature

19.8°C

+3.0°C

Average Daytime Temperature

    25.2°C

+3.9°C

Average Night time Temperature

14.4°C

+2.0°C

No of Air Frosts                                                 

0

0

No of Ground Frosts                                           

0

0

No of Days where snow fell                               

0

0

Sunshine Duration                                             

253 hours

+49 hours

Rainfall

15 mm

-41mm

Average Soil Temperature (Depth of 30cm)     

17.9°C

+0.4°C

Observers notes: 

A very hot, dry and sunny month. My home location was slightly cooler than temperatures recorded at the Oil Depot in Wymondham. Top temperature of 34.4°C recorded on the 27^th and on 3 other days temperatures reached 30+°C. A thunderstorm on the 27^th ended a run of 47 days without rainfall.

In the main ring this year there will be an exciting range of attractions which in previous years has included a spectacular drop in by the Red Devils Parachute Display Team. The show also has a large countryside area, food halls, a vast range of local business exhibiting, along with education stands and entertainment for all the family.

William Goff said “The Aylsham Show is a fantastic local event, bringing together businesses, enthusiasts, competitors and the agricultural community to create a great spectacle for the public.  We were delighted to be a long term sponsor of this brilliantly organised event. I hope that everyone that attends has a fantastic day”

All the team at Goff Petroleum are hoping the sun will be making an appearance like in previous years, so don’t forget your sunscreen.

Oil Market, Exchange Rate, and Heating Oil Price Information July 2018

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $77.99                Price at End of Month: $74.37

Highest Price in Month: $77.99                Lowest Price in Month: $70.45

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.3200                              End of Month: 1.3147

Kerosene (Heating Oil) Cargo Price $ per tonne

Start of Month: $711.75                                           End of Month: $703.00

Highest Price in Month: $726.75                            Lowest Price in Month: $678.00

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 2.74 ppl

Oil Market commentary & Market Data available from:

http://www.bbc.co.uk/news/business/market_data/commodities/default.stm

OFTEC have have written to the CCC expressing major disappointment that, despite clear evidence showing heat pumps are not providing a viable route to decarbonising heat from off-grid homes, the Government’s advisory body has still endorsed this approach in its latest report.

The recently published ‘Reducing UK emissions: 2018 Progress Report to Parliament’ states that ‘cost-effective and low-regret opportunities exist for heat pumps to be installed in homes and businesses that are off the gas grid’, even though the report later admits that ‘the domestic heat pump market remains stagnant, accounting for under 1% of annual heating’.

OFTEC’s letter sets out the now widely accepted reasons for the low take up of heat pumps across the off-grid sector, including the inherent poor energy efficiency of the large majority of rural housing stock, the high upfront installation costs of heat pumps, and the impracticality of installing these systems in a retrofit and often ‘distress purchase’ situation. These concerns have been further substantiated in reports over the last few months from the Public Accounts Committee and National Audit Office into the failings of the Renewable Heat Incentive (RHI) scheme.

OFTEC met with the CCC in March to underline the significant challenges associated with installing heat pumps in the off-grid sector. Also, to outline industry’s work currently underway to develop a low carbon liquid fuel to replace kerosene as an alternative, more affordable and practical solution. However, the CCC does not appear to have taken these widely upheld concerns and OFTEC’s progressive work into account in its new report.

OFTEC CEO Paul Rose explains:

“Disappointment and disbelief would probably sum up OFTEC’s reaction to the recommendations laid out in this latest CCC report. Heat pump sales continue to flounder for very real reasons, which we have emphasised time and time again to government, the CCC and other policy advisers, yet these technologies are still being pushed as one of the main answers to decarbonising heat for the off-grid sector.”

“Heat pumps in certain circumstances such as highly insulated new build properties, can work well, but in the off-grid sector these opportunities are few and far between. Drawing on over 25 years’ knowledge and experience of the rural heating market, we firmly believe the best solution for these homes is to migrate to a reduced carbon liquid fuel. But to make this a reality, industry needs to know government is behind us.”

The CCC report claims that displacing oil heating in homes with a drop-in biofuel would not align with its advice on best use of scarce bioenergy resources, as set out in its 2011 Bioenergy Review. However, OFTEC says this position does not account for the recent significant advancements in sustainable biofuel development which, through economies of scale, the off-grid heating sector can exploit.

Paul Rose continues: “Major progress has been achieved in the development of new, low carbon liquid fuels for road transport and aviation, including work by a number of household names such as BA, Virgin, Airbus and Boeing, who are actively developing sustainable ‘drop-in’ fuels. This work is likely to yield a number of options which could be successfully used for heating.”

“OFTEC burner manufacturer members have already successfully tested the second generation sustainable fuel Hydrogenated Vegetable Oil (HVO) in various blends up to 100% with no equipment modifications required. This fuel is currently in volume production.”

“An even quicker solution could be provided by revisiting the development of a FAME based sustainable fuel called B30K which OFTEC extensively and successfully tested in 2011. There is strong potential to introduce B30K as a commercial product which, over time, would see the renewable element increase from 30% to 100%.”

“All these developments point to a future where reduced carbon liquid fuels become the new normal. Government and industry’s efforts should now be aligned and focused on developing these solutions which have the potential to deliver tangible, sustainable results towards the UK’s carbon reduction targets.”

Source: OilFiredUp

Oil supply can be affected by anything from local weather conditions to worldwide political conflicts.

When global oil production levels fall below global demand levels, a shortage in supply is created, forcing the up the cost of importing heating oil up. As the importer has to pay more the increased cost is forced along the supply chain meaning your local heating oil supplier will have to increase their prices too.

_{2. Crude Oil Prices}

The amount of crude oil produced by members of OPEC (Organisation of the Petroleum Exporting Countries) has a direct effect on global crude oil prices. As heating oil or 'kerosene' is refined from crude oil as the price of crude oil rises so will the cost of kerosene.

_{3. Weather Events}

Heating oil prices can increase dramatically during extreme weather events. Severe cold weather snaps and winter storms in the UK, or abroad, have a direct effect on demand and the price of heating oil will typically increase as people stock up and use more fuel during these times.

Delivery and access can also prove much trickier during adverse weather conditions which can also increase the overall cost of your home fuel delivery.

_{4. Changing Seasons}

Demand for heating oil in the UK is greatest between the months of October to March as seasonal temperatures drop and the need to keep our homes warmer increases.  The warmer weather of Spring and Summer sees a significant drop in the demand for fuel.

Timing your purchases to get the best heating oil price in line with the change in seasons can save you money on your home heating bills.

_{5. Distribution & Delivery Costs}

Heating oil delivery costs will vary depending on how far your property is located from your nearest depot and the ease of accessing the area in which you are based. Goff Petroleum have a range of delivery vehicles to suit most delivery situations. 

At Goff our team constantly check prices to ensure we're giving you the best price possible for your home heating oil.

BEIS’ ‘Future Framework for Heat in Buildings’ sought views and evidence from industry on actions which can be taken to phase out high carbon fossil fuel heating in off-grid properties during the 2020s. The findings will be published later this year and used to inform draft policy.

OFTEC’s submission focused on the introduction of reduced carbon liquid fuels as the most affordable and practical decarbonisation route for the 850,000 oil using homes in England and Wales. This should be achieved through a stepped pathway to achieving zero emissions by 2050 which includes:

* the replacement of old, inefficient oil boilers with new high efficiency condensing models and energy efficiency controls via an incentivised scrappage scheme, providing immediate carbon wins

* Financial support through ECO3 for fuel poor and low income families to achieve the conversion

* The roll out of a low carbon liquid fuel with an agreed incremental reduction in the carbon content over time

* Ongoing industry innovation to develop the next generation of appliances to meet the highest standards for efficiency and emissions.

In 2010, OFTEC conducted successful field trials of a low carbon liquid fuel called B30K (30% FAME/ 70% kerosene). The fuel is now commercially available and costs only slightly more than heating oil. More recently, OFTEC members conducted combustion tests on Hydrotreated Vegetable Oil (HVO) and kerosene blends from 60% to 100% HVO, with highly positive results.

OFTEC CEO Paul Rose comments: “The capability of the oil heating industry to innovate and meet the government’s decarbonisation agenda has not been adequately recognised. It is not boilers that produce carbon emissions, it’s the fuel they run on. Therefore, it is premature for government to consider regulating against oil heating when all liquid fuel boilers could be run on a low carbon alternative fuel before 2035.

“A reduced carbon liquid fuel would offer an almost drop-in replacement for kerosene, overcoming the significant cost and practical issues of replacing an entire heating system. These barriers have been well documented as significant reasons for the poor take up of renewable technologies to date. There is also a well-developed and competent network of supply, installer and servicing businesses already in place who could continue to support consumers at little or no additional cost.

“A contact group has recently been established, providing a positive way for BEIS and industry to constructively work together and develop solutions. However, what industry needs before further steps are made, and is currently lacking, is a clear commitment from government that low carbon liquid fuels will be an accepted part of policy going forward. Innovation funding should also be made available to aid the development of an alternative fuel in the same way that support has been allocated to explore hydrogen options.”

OFTEC’s response also highlights the harsh realities of decarbonising off-grid housing stock.  An estimated 88% of off-grid homes currently fall into EPC band D or below and over 70% of rural properties have unfilled cavity or solid walls* making them difficult to treat without significant investment.

Without government support, most consumers simply can’t afford to improve their properties to EPC band C, the level at which renewable technologies such as heat pumps become a viable option. Even if they could finance the energy efficiency measures, rural consumers would still face the significant upfront installation costs of renewable technologies which start at c. £6,000 for an air source heat pump**.

This compares to a far more palatable £2,000 for a high efficiency boiler – and less if the initial cost is subsidised - which would still have the same heat output when converted to run on a low carbon liquid fuel, making the need for costly energy efficiency improvements to the home less important.

Paul Rose continues: “Cost will remain the most crucial consideration for homeowners and, with the majority of new installations made in distress purchase situations, consumers want quick, affordable solutions.

“For this reason, we think the best approach to carbon reduction lies in ‘greening’ the fuel itself rather than focussing on the appliance. Bringing a low carbon liquid fuel to market would overcome the issues associated with poor quality rural housing stock, minimise upfront costs for consumers and provide a practical, simple to understand alternative to kerosene.

“The next step will be to work directly with policy makers to develop a road map for the future of off-grid heating with clear milestones agreed so that a planned schedule of financial investment, development, testing and deployment can be achieved.”

* English Housing Survey 2015
** Energy Savings Trust 2018

Source: OFTEC 

Oil Market, Exchange Rate, and Heating Oil Price Information June 2018

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $76.39                Price at End of Month: $77.99

Highest Price in Month: $77.99                Lowest Price in Month: $72.16

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.333                                 End of Month: 1.3200

Kerosene (Heating Oil) Cargo Price $ per tonne

Start of Month: $730.75                                           End of Month: $722.75

Highest Price in Month: $722.75                            Lowest Price in Month: $681.25

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 2.69 ppl

According to the OMJ “Crude prices remain well supported by concerns over Iran. Traders are worried the US is looking for a much lower blockage of Iranian crude imports that initially estimated. The market had been pricing in a reduction in Iranian supply of about 500,000 bpd. However, there are now fears that the US is hope to block much of Iranian's 2.7m bpd of crude exports. It is reported that Saudi will hike production by 1m bpd before the end of July. However, even with the other OPEC and non-OPEC producers increasing production there is still a risk the market with experience a large shortfall in Q4 2018. As a result it is no surprise WTI Crude is attempting to break out higher above long term resistance at $69/b.”

Oil Market commentary & Market Data available from:

http://www.bbc.co.uk/news/business/market_data/commodities/default.stm

Currently, oil heating is one of the most popular choices for those living off the gas grid and a new report from OFTEC, the trade association for the oil heating industry, suggests these homes could switch to a renewable alternative, such as a vegetable oil blend, by as early as 2022.

This green ‘biofuel’ could play an important role in reducing carbon emissions from these homes and provide a long term, sustainable solution for rural heating.

Malcolm Farrow from OFTEC, said: “Oil heating is incredibly popular due to its low price and flexibility. But we are all being encouraged to take steps to reduce our carbon emissions and, although it may sound strange, vegetable oil could be the key.

“Switching oil using homes to a ‘biofuel’, which blends a small amount of kerosene with vegetable oil or an oil derived from waste products, represents the best of both worlds. Households could continue to enjoy the benefits of a liquid fuel, such as topping up when they want and shopping around for the best price, whilst also drastically cutting their carbon emissions.

“For households, adopting this biofuel would be relatively simple as the fuel can be stored in existing oil tanks and would only require a minor boiler adjustment which could be completed during an annual standard service.”

Other renewable heating technologies that are currently available for rural homes, such as air source heat pumps and solar thermal, have seen limited take up due to high upfront installation costs, and the significant disruption involved, which has put many households off making the move.

OFTEC is confident that whilst oil is currently the cheapest of all the major heating fuels, the price of a biofuel could become very competitive following a mass roll out.

Malcolm added: “We are going through a period of significant change in the way we consume energy, from the move towards electric cars for transport to renewable sources of heating. However, when it comes to keeping warm, off gas grid households only have the option of expensive and impractical renewable technologies at the moment.

“Biofuels could represent a realistic and viable option to help rural homes reduce their carbon emissions. We have presented our detailed proposals to local MPs and government and will shortly begin real-world testing.”

Source: OFTEC

The latest quarterly update issued in April 2018 by the Sutherland Tables, a recognised independent source of comparative UK domestic heating prices, shows that the annual cost of heating a typical three bedroom home on oil, using a condensing boiler is now £1,143 per annum– much cheaper than any renewable options. 

For example, if you’re running an air source heat pump through a radiator system it will be costing a comparative £1,685 and for an LPG condensing boiler, £1,567.

As always Goff Petroleum continues to ensure its customers get the best possible heating oil price and delivery service, from an experienced team with a wealth of product and technical knowledge, able to provide advice and assistance when it’s required. 

The use of biodiesel is driven by both European and UK legislation. In Europe, this is known as the EU Renewable Energy Directive and is supported by UK legislation (generated by the Energy Act of 2004) known as the Renewable Fuel Transport Obligation (RTFO) which since 2008 has set the volume target for renewable fuels in the UK supply chain.

In April 2018, the percentage of all fuels derived from renewable sources increased to 7.25%. From January 1st, 2019 this percentage will rise to 8.50% and continue to increase up to 12.40% by 2032. Suppliers have obligations to meet these targets, but how they meet these obligations is up to them (increasing ethanol in petrol, purchasing tickets to cover the shortfall - the more expensive option – or adding FAME to sulphur free gasoil also known as SFGO).

The British Standard for non-road diesel (known as BS2869) was revised in 2006 to allow the addition of FAME to both classes of middle distillate fuel, however this was rarely realised. Then the EU Fuel Quality Directive was implemented in the UK on the 14 January 2011 introducing changes to the composition of SFGO. Fuels intended for use in non-road mobile machinery (NRMM e.g. tractors) will have a sulphur content of 10ppm. With the new RTFO changes, the Federation of Petroleum Supplies (FPS) understands that many suppliers have communicated that they cannot now guarantee that their SFGO will be FAME free as most distribution terminals have facilities to store just three grades of distillate fuel. One is used for Kerosene, one for road Diesel, and the third must cover both SFGO for NRMM and stationary engines. It is almost certain therefore that road diesel (including FAME) will now be marked and supplied for NRMM use.

What is FAME?

Biodiesel is a diesel replacement fuel, which in the UK is manufactured from mostly recycled cooking oils but may also be made of a variety of blends of renewable and recyclable material including tallow (animal) fats and plant oils. The biodiesel manufacturing process converts these oils and fats into long chain molecules. These molecules are also referred to as Fatty Acid Methyl Esters and are more commonly referred to as “FAME”. FAME has been blended into UK road fuel since 2004 in levels up to 7%. FAME is a powerful solvent, with good detergency properties – it is effectively a paint stripper! Unlike diesel, FAME (Biodiesel)  is “hydroscopic” which means it attracts and holds onto water.

Potential Problems.

There is considerable experience within the automotive sector and oil industry regarding the use of FAME in diesel and much of this will have some relevance to SFGO.

The main issues to be aware of include:

- Material incompatibility (many common rubbers, plastics and surface coatings will degrade from contact with fuels containing FAME).

- Residual deposits causing clogged filters.

- Water uptake - with enhanced potential for mould, bacteria and algae growth.

- Fuel stability (may degrade over time by oxidation and hydrolysis)

- Cold flow waxing and precipitation problems.

Preparation.

Ideally, before taking a delivery of any bio fuel, the tank should be cleaned internally with water and solid deposits or mould growth removed as efficiently as possible. This may require specialist tank cleaning service.

Ongoing Housekeeping and Considerations for Tanks & Machinery.

There is a risk of microbial growth for all distillate fuels, but the biodegradable nature of biofuel blends is thought to heighten this risk. Therefore, more regular tank checks will be required, (due to FAME’s strong detergency, solvent and hydroscopic properties) compared with those of purely hydrocarbon fuels.

- Tanks should be examined for signs of degradation in structure, material or coating. Prompt and appropriate removal or remedial action must be taken for any water, dirt, mould or growth present in the tank. Note: tanks that don't already have drain points for removing water are likely to need modification.

- Examine sight gauges on older fuel storage tanks for signs of leakage and replace any leaking seals.

- Filters should be examined at frequent intervals and fuel filters replaced after two or three deliveries.

- Pipework, seals, pumps and other components must be checked continually for signs of actual, or potential, oil leaks and, if found, remedial work and/or material replacement undertaken immediately. Note: If you are having tanks serviced before you receive the new fuel it would be advisable to replace fuel seals as a one-off, precautionary exercise.

- Most NRMM engines, maintained in compliance with manufacturer’s service guidelines, are fully compatible with fuel containing FAME in the proportion found in fuel. However, some fuel system components on older engines, including seals and pipes, may not be compatible.

- Storage Water is possibly the biggest problem with regards to SFGO containing biodiesel. Therefore, all effort must be done to safeguard any tanks or containers from water ingress by rain or moisture in the air as well as regularly draining any water off. Additionally, keeping a tank brim-full ensures that there is little air left in a tank to draw moisture out of. Once in a fuel, water brings about increased corrosion of equipment and worse, allows bacteria to breed. To reduce these risks, many industry webpages suggest that biodiesel (and therefore bio SFGO) has a limited shelf life and some suggest it is best to avoid storing FAME blends for more than six months.

Conclusion and advice to SFGO customers to prepare for FAME:

Ideally, undertake a full, professional clean of your tank ahead of the first delivery of a bio blend. At least initiate an immediate check on the tank checking condition and suitability. This should include the construction material, pipework and seals. Any obvious deficiency or damage must be remedied.

Subsequently check the tanks often and have a regular maintenance programme. Keep the fuel clean and dry and top up the tank to reduce air which can draw moisture. If you find sediment or bacterial growth seek professional help. Home remedies such as fungicides or microbiological killers may do more harm in the long run. Those that do work may kill the bacteria but the dead growth on the bottom of tank can also build up and cause issues.

Source: FPS guidance document published June 2018 “Being Prepared for FAME”

Mr Trump twitted “oil prices are too high. Opec is at it again. Not good!” in reference to the Organisation of Petroleum Exporting Countries, of which Iran, many middle eastern countries, five African nations, and Venezuela is part.

‘This is business Mr Trump, we thought you knew it,’ Iran’s representative said

Oil prices have increased approximately 60 per cent over the last year after Opec and Russia, another exporter, began reducing supplies in 2017.

The Iran nuclear deal was signed largely in part because six countries including Russia, China, France, Germany, the UK, and US were willing to reduce sanctions in exchange for Tehran halting development of its nuclear weapons programme.

The US pulled away from the agreement and planned to issue new sanctions on Iran. 

Mr Trump has also penalised Venezuela, amid its political turmoil as President Nicolas Maduro has refused to leave office and honour election results. He has also placed Venezuelan citizens on his latest iteration of the travel ban.

As a result of the US action on the nuclear deal, European and Asian clients have stopped importing Iranian oil and have even ceased doing business with it

Saudi Arabia is the largest Opec producer, Iran’s rival, and already increased production of oil for the year. The country supported Mr Trump’s decision about the agreement, unsurprising given its royal family’s collegial relationship with him.

Source: OilFiredUp

Oil Market, Exchange Rate, and Heating Oil Price Information May 2018

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $74.31                Price at End of Month: $76.39

Highest Price in Month: $80.37                Lowest Price in Month: $73.03

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.359                                 End of Month: 1.3329

Kerosene (Heating Oil) Cargo Price $ per tonne

Start of Month: $704.00                                           End of Month: $730.75

Highest Price in Month: $752.50                            Lowest Price in Month: $696.50

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 3.94 ppl

Note: Crude broke the $80 barrier during the month before sinking back below.

Oil Market commentary & Market Data available from:

http://www.bbc.co.uk/news/business/market_data/commodities/default.stm

This Goff guide applies to oil storage tanks up to 3500 litres capacity supplying oil to single family dwellings for heating and cooking purposes. The information here is a general guide, and you should always check with your OFTEC registered technician how the regulations affect you.

Oil Storage Tanks

Modern oil storage tanks come in all shapes and sizes and can be made from plastic or steel. The size and type will depend on the your individual and domestic requirements and the tanks location. Your tank should be manufactured to OFTEC standards (OFS T100 for plastic tanks or OFS T200 for steel).

Protecting the Environment

To minimize the risk of pollution from an oil spill, some installations must have secondary containment (a bund). This can be achieved by either choosing an integrally bunded tank or constructing a bund around a tank. The bund must be capable of holding at least 110% of the tanks contents. An OFTEC registered technician registered under the ‘Competent Person’ scheme can advise you whether you need a bunded tank using a standard risk assessment . Typically, installations near a river, well or any controlled water will require bunding, along with tanks that use a remote filler point.

Tank Location

It is unlikely that a fire could be started by a domestic oil storage tank and its contents. However, tanks are required to comply with fire separation distances in order to adequately protect stored fuel from a fire or heat source, which may originate nearby.

Tanks should be sited:-

• 1.8m away from non-fire rated eaves of a building;

• 1.8m away from a non-fire building or structure (e.g. garden sheds);

• 1.8m away from openings (such as doors and windows) in a fire rated buidling or structure (e.g brick built house/garage);

• 1.8m away from oil fired appliance flue terminals;

• 760mm away from a non-fire rated boundary such as a wooden boundary fence;

• 600mm away from screening (e.g. trellis and foliage) that does not form part of the boundry.

If it is impossible to comply with these requirements, then a fire protection barrier with at least 30 minutes fire rating should be provided. A minimum separation distance of 100mm is required between the tank and the fire rated barrier unless a larger distance is specified by the tank manufacturer.

In some situations, the oil storage tank can be sited inside a building such as a garage or outhouse. Installations of this type require the tank to be self- contained within a 60 minute fire rated chamber.

Tank Bases

The need to provide suitable bases and supports for oil storage tanks is of paramount importance for safety and environmental protection. The base should be :

• Adequate for the weight of the tank;

• Non-combustible, imperforate and level;

• Constructed of concrete, paving stones or stonework;

• Large enough to extend 300mm beyond all sides of the tank.

If an oil storage tank is inadequately supported, the tank itself can be weakened leading to the eventual failure and escape of the stored fuel. During the life of an installation an oil storage tank base will need to provide continual structural support, even though ground conditions may alter from season to season and year to year.

Building Regulations

Oil storage tank installations need to comply with regional building regulations. In England & Wales, OFTEC registered technicians can self-certify their own work without involving local authority building control. But if you choose to use someone who isn’t registered with a ‘Competent Person’ scheme like OFTEC, then you will have to obtain a building control notice and arrange for an inspection which can be costly and time consuming. Similar rules apply in Scotland where you may need to apply for a warrant.

Annual Inspection

It is important that oil storage tanks are inspected annually, preferably by an OFTEC registered technician. Whilst our delivery driver will undertake a pre-delivery assessment the tank; this is principally to see if the receiving tank will safely take the ordered quantity. This is not considered an annual inspection and this process does not certify the tank or installation in any way.

More Information

This animated video from the Channel Islands about oil tank leak prevention is very informative, as is this Oilcare guide.

Goff Petroleum recommend Anglia Heating Solutions, your local OFTEC registered company for servicing and maintenance of oil fired boilers, and for safe, swift cost effective tank replacement. We would like to thank the engineers from Anglia Heating Solutions for their help in producing this information sheet.

Hopefully you have found this Goff Heating Oil how to guide useful. If we can help you with any other queries or if you have an idea for a how to guide you would like us to write then please do not hesitate to contact us.

Oil Market, Exchange Rate, and Heating Oil Price Information April 2018

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $67.09                Price at End of Month: $75.15

Highest Price in Month: $75.31                Lowest Price in Month: $66.39

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.405                                 End of Month: 1.377

Kerosene (Heating Oil) Cargo Price $ per tonne

Start of Month: $664.50                                           End of Month: $716.00

Highest Price in Month: $716.50                            Lowest Price in Month: $657.00

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 4.27 ppl

Interesting Articles on the oil price this month

Oil Market commentary & Market Data available from:

http://www.bbc.co.uk/news/business/market_data/commodities/default.stm

Oil Market, Exchange Rate, and Heating Oil Price Information March 2018

Brent Crude Dated ($ per Barrel)

Price at Start of Month: $63.99                Price at End of Month: $67.24

Highest Price in Month: $69.03                Lowest Price in Month: $63.52

Pound £ to US Dollar Rate $ Exchange Rate FT:

Start of Month: 1.372                                 End of Month: 1.403

Kerosene (Heating Oil) Cargo Price $ per tonne

Start of Month: $634.00                                           End of Month: $658.50

Highest Price in Month: $669.25                            Lowest Price in Month: $619.50

Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 2.51 ppl

Oil Market commentary & Market Data available from:

http://www.bbc.co.uk/news/business/market_data/commodities/default.stm

It was a cold, wet and generally cloudy month with significant drifting snowfall on the 1^st,2^nd and 3^rd.  The temperature remained below 0°C for the first 2 days of month meaning that transport was disrupted firstly by drifting snow and later by flooding caused by the thaw.

OFTEC suggested that the impact of the extreme cold weather on the country’s energy supply should raise important questions for politicians as they consider the pathways towards future decarbonised energy. To find out more click here.