Good news and bad news…
Some prices up and others down
Media release
Conception Bay South, NL, August 12, 2008- Consumers in Newfoundland and Labrador will see some changes to petroleum pricing this week but, they might not necessarily like them. That’s from George Murphy of the Consumer Group for Fair Gas Prices.
“There is some disappointing news for the consumer this week. Twelve days data out of a possible fourteen shows that consumers of gasoline will be hit with a 2.5 cent a litre increase at the pumps while heating and stove oil users should see a decrease of slightly better than four cents a litre. I also expect that, with the heating-stove oil number pointing down, it may also be an indicator of the direction that diesel will be headed this pricing session,” said Murphy, researcher for the consumer group.
“Even though oil pricing has been down the past couple of weeks, we’ve seen an abject change in the value of the Canadian dollar, and that has cost the consumer in this country at least three cents a litre at the pumps and even more at the heating truck level in the last two weeks alone. Bad news was also reported from the United States Energy Information Administration when they reported a huge inventory draw against gasoline inventory as measured over the last two reporting periods.
“Oil pricing has been dropping for several reasons, any of which has had monumental impact these last couple of weeks. Demand for petroleum products in China dropped in July month by some seven per cent and the economy is showing some wear in the U.S, especially in the manufacturing sectors. The U.S dollar is continuing to gain some strength back against the Euro and investors are continuing to pull investments out of oil as that important hedge against inflation. We would be more positive about the latter if the Canadian dollar wasn’t so tied to the value of oil. It shows Canadians that they should still worry over high energy pricing this coming winter in spite of the drop in overall oil pricing; it doesn’t mean that the related commodity price will be down too.
“We’re still watching some world geo-political conditions out there that continue to affect the stability of oil pricing. As predicted here in the update some months ago, PPK rebels in Northern Iraq successfully attacked the export facilities in Ceyhan, Turkey and that resulted in a disruption in exports through the Mediterranean Ocean gateway. The situation in Georgia and Russia also promises to play into the markets of there is a disruption to exports although that may play more into European markets more so. The situation between the United Nations and Iran’s pursuit of its nuclear ambitions promises to be a contentious issue in the coming weeks as the United States pushes for possibly more sanctions and Iran’s insistence on the pursuit of nuclear power. We also have the sniffers out waiting for OPEC to pull the plug on some production this coming September if oil continues to fall in value.
“Waiting in the wings is also the weather. Remember that we’re into Hurricane Syndrome season and that means possible market plays against possible supply disruptions in the Gulf of Mexico. We are fast coming up to the three year anniversary of Hurricane Katrina and Rita and the national Hurricane center has also increased its prediction on the number of possible storms. It is promising to be an interesting couple of weeks and well worth watching.”
-30-
For more information, contact;
George Murphy
Group researcher/Member
Consumer Group for Fair Gas Prices
Some prices up and others down
Media release
Conception Bay South, NL, August 12, 2008- Consumers in Newfoundland and Labrador will see some changes to petroleum pricing this week but, they might not necessarily like them. That’s from George Murphy of the Consumer Group for Fair Gas Prices.
“There is some disappointing news for the consumer this week. Twelve days data out of a possible fourteen shows that consumers of gasoline will be hit with a 2.5 cent a litre increase at the pumps while heating and stove oil users should see a decrease of slightly better than four cents a litre. I also expect that, with the heating-stove oil number pointing down, it may also be an indicator of the direction that diesel will be headed this pricing session,” said Murphy, researcher for the consumer group.
“Even though oil pricing has been down the past couple of weeks, we’ve seen an abject change in the value of the Canadian dollar, and that has cost the consumer in this country at least three cents a litre at the pumps and even more at the heating truck level in the last two weeks alone. Bad news was also reported from the United States Energy Information Administration when they reported a huge inventory draw against gasoline inventory as measured over the last two reporting periods.
“Oil pricing has been dropping for several reasons, any of which has had monumental impact these last couple of weeks. Demand for petroleum products in China dropped in July month by some seven per cent and the economy is showing some wear in the U.S, especially in the manufacturing sectors. The U.S dollar is continuing to gain some strength back against the Euro and investors are continuing to pull investments out of oil as that important hedge against inflation. We would be more positive about the latter if the Canadian dollar wasn’t so tied to the value of oil. It shows Canadians that they should still worry over high energy pricing this coming winter in spite of the drop in overall oil pricing; it doesn’t mean that the related commodity price will be down too.
“We’re still watching some world geo-political conditions out there that continue to affect the stability of oil pricing. As predicted here in the update some months ago, PPK rebels in Northern Iraq successfully attacked the export facilities in Ceyhan, Turkey and that resulted in a disruption in exports through the Mediterranean Ocean gateway. The situation in Georgia and Russia also promises to play into the markets of there is a disruption to exports although that may play more into European markets more so. The situation between the United Nations and Iran’s pursuit of its nuclear ambitions promises to be a contentious issue in the coming weeks as the United States pushes for possibly more sanctions and Iran’s insistence on the pursuit of nuclear power. We also have the sniffers out waiting for OPEC to pull the plug on some production this coming September if oil continues to fall in value.
“Waiting in the wings is also the weather. Remember that we’re into Hurricane Syndrome season and that means possible market plays against possible supply disruptions in the Gulf of Mexico. We are fast coming up to the three year anniversary of Hurricane Katrina and Rita and the national Hurricane center has also increased its prediction on the number of possible storms. It is promising to be an interesting couple of weeks and well worth watching.”
-30-
For more information, contact;
George Murphy
Group researcher/Member
Consumer Group for Fair Gas Prices
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