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Posted: 19/05/2022

Heating Oil Price and Oil Market Information April 2022

Heating Oil Price and Oil Market Information April 2022

Goff Heating Oil Market Price Information

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 7th 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