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Friday, September 12, 2008

Highway robbery
Well...
In areas of the country that got hit with upwards of a 13 cent a litre increase, there are a lot of people thinking that this is a case of highway robbery...
They'd probably be right in this case...
Hurricane Ike may be blowing ashore and having it's effects on New York harbour pricing that we're seeing hit us right now, but, are the traders right in pushing pricing up?
Doubtful, and here's why...
Back at the time of the Katrina and Rita hurricanes during the Labor day week of 2005, consumers saw gasoline pricing increase while still in the demand season for gasoline and while, at a time when refiner capacity was measured well above todays 78 per cent...
Memory is failing me but I do believe that capacity was measured somewhere around 92 per cent. That number alone tells you that there is more than enough extra capacity to take over where any disruption might be occuring, or will occur after this weekend when the damage assessments are done.
Here's the big second notion; Consumer demand is lower now than what it was back then. We're presently down 5 per cent from the same time last year. While inventories may be down from last year they're not described as "critical".
What gives Big Oil?
I think it's high time we in Canada start to look after ourselves and trade based on a Canadian condition and not where Uncle Sam thinks pricing should be...
Thoughts?...
In the meantime, a caller to a local Open Line radio show here told the host that while he was at a local gas station here, the station owner told him his cost for purchase had already shot up close to 11 cents a litre. That's before taxes...
Number I have here is 10.2 cents plus...
Be warned!...It's coming!...
Regards,
George

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