Numbers show a hike in prices for Thursday

Here's what I have for Thursday price changes this week:

• Heating and stove oils show an increase of 1.66 cents a litre. Remember that the heating oil numbers are thrown off a little because of the use of jet fuel in the winter mix.
  
• Diesel shows a 1.4 cent a litre increase on the way, and...
  
• Gasoline shows an increase of 1.3 cents a litre upwards.

Just a few factors of note these last two weeks:

• A drop in refiner capacity down to 80% from the previous weeks 81%.
  
• A drop in inventories of distillates that includes diesel and all heating fuels. Crude oil and gasolines also showed substantial draws against inventories.
  
• The Canadian dollar has gained almost two cents against the US greenback, partially insulating consumers from a more substantial increase in prices.
  

That's it from me!

Regards and Happy New Year!

George Murphy

Numbers are up a little

Here's what I have, leading into the New Years break in the markets:

There will be some slight increases in prices this coming Thursday and they should be a little stronger than what I have here as my numbers are based on thirteen days of data rather than the fourteen needed.

• Heating and stove oils show a 1.48 cent a litre increase.
• Diesel shows a 1.2 cent a litre increase, and...
• Gasoline shows a 1.2 cent a litre increase.

I'll be posting more here in an official release late tonight or early tomorrow morning, with the final numbers we'll see for the week's price changes.

Regards,

George

No movement in prices

Just in case you may have been wondering, the increases in prices are averaging in the tenths of cents since oil started creeping up again.

That's not enough to warrant any use of the interrupter formula...

I'll be posting here sometime next Tuesday night with numbers for the scheduled price change for Thursday.

Have a good Christmas on that news!

Regards,

George

Call it an early Christmas present
Numbers still down for all fuels

Media release

Conception Bay South, NL, December 15, 2009- Consumers will see an early Christmas present this Thursday morning when the PUB moves to adjust prices based on the last two weeks of market activity, that’s from George Murphy of the Consumer Group for Fair Gas Prices.

“The last day of market trading are in and the predictions will hold true that we will be getting a break on all, if not most, fuels that the Pub regulates,” said Murphy, group researcher for the group.” We’re looking at a significant drop in gasoline prices of close to four cents a litre at the pumps. The heating and stove oil numbers show a drop of 1.2 cents a litre while diesel shows a drop of 1.3 cents a litre is coming.”

“The number for heating and stove oils doesn’t look like a lot but it does signal what I see as happening out there on the markets. Big Oil is dealing with refineries that are starting to come back on-line after fall maintenance and a surplus of inventory as we wade deeper into the winter heating season. If we have plenty of inventory on hand, and there is also refining of the product, it is understandable why any price increases would be a rarity at this time of year when prices would normally be climbing. We’re still not witnessing a pick-up of distillate demand at the same time as hearing about a pick-up in economic recovery. That part of the equation is not registering as a positive thing to commodity investors and I’m seeing a withdrawal in investment in that commodity. Any pick-up in refiner capacity tomorrow may signal further breaks for consumers to come. The least that we have here is the possibility that winter heating and stove oil prices may very well have already peaked for the time being. Of course, anything can happen overnight to change the situation as I see it.”

-30-

For more information, contact:

George Murphy
Group researcher
Consumer Group for Fair Gas Prices

Update #2
Numbers still down for Thursday

Here's what the numbers look like after today's trading, one more day to go:

• Heating and stove oils down by 1.1 cents a litre.
• Diesel down by 1.2 cents, and...
• Gasoline shows "down" by 3.7 cents a litre.

I would anticipate not a lot of big changes between now and the end of tomorrow's trading day. Gasoline could be down as much as four cents, if my numbers are right with heating, stove oils and diesel down close on 1.3 cents a litre. either way, look for that Tuesday posting!

Regards,

George

Numbers still show "down" for Thursday coming

Call it an early Christmas present on the way.

Here's what I have with twelve days of data in so far. We still have Monday and Tuesday to contend with so, the numbers may get a little better before then.

• Heating and stove oils show "down" by a penny.
• Diesel shows "down" by 1.1 cents a litre, and...
• Gasoline shows "down" by 3.5 cents a litre.

I guess Santa doesn't work for Exxon after all!

What is significant about the numbers?

Heating and stove oils are down in a demand season and refiner capacity is still low, recorded at 81.1 per cent, just up a little from last week. The slight increase in refinery capacity just might be a fore bearer of lower prices for heating and stove oils as they pick up production and build inventories, especially so if capacity increases again...

I'll be posting here again on Tuesday night, a little later than usual so drop in on the blog then, or keep an ear to the radio news and such for word on what to expect Thursday coming.

Regards,

George

No changes to prices this week

Numbers are starting a slide in the downwards direction, however, they aren't enough to warrant the use of the interrupter formula this week.

We should be looking at a decline in all prices next week however, even though right now numbers for distillates like heating, stove oils and diesels all show minuscule increases so far. The spot price for those fuels have nosed below the average set from the last price setting just last week.

Here's what I have so far:

• Heating and stove oils show a bare 8/100ths of a cent up.
• Diesel shows 'up' by the same 8/100ths, and...
• Gasoline shows a decline of 1.9 cents per litre.

Again, I'm projecting declines in all prices for next week, unless inventory data out tomorrow shows some pretty heavy stuff ahead of Christmas or there's a dramatic reversal in the US dollar.

I'll be in touch with those changes.

Some observances:

• Predictions by some market companies are calling for inventories to increase even though refinery capacity remains at near historic lows.
• Oil prices are dropping as a result of some gains in the US greenback, making the US dollar more of an investment to be made over commodities.
• Some talks of inflation to come is playing into the markets and that means higher interest rates. If rates go up, consumers will curtail on spending and that will eat into demand.
• The inflation talk brings with it more worries of job losses and related problems with it. That in turn will play into the use of fuels and it's price by industry. More on the effects of inflation on oil prices next time around.

That's it for now!

Then again, that's enough, isn't it?

Regards,

George

Might be worth noting that last paragraph on heating oil pricing, if you are a user...

Not much change in the markets this week
Gasoline up because of low refiner capacity

Media release

Conception Bay South, NL, December 01, 2009- Low refiner capacity utilization has resulted in only a slight increase to come for gasoline prices when the Public Utilities Board moves to set prices this coming Thursday. That’s according to George Murphy of the Consumer Group for Fair Gas Prices.

“It has been rather boring watching the markets this week, especially with no changes in some of the numbers that are readily apparent, with the exception of gasoline numbers,” said Murphy. “Numbers show only slight changes to heating and stove oils with those fuels down by 45/100ths of a cent. Diesel shows a very modest 2/10ths of a cent drop and gasoline shows a 1.1 cent a litre increase coming.”

“Low refiner capacity that sits at an almost historic low of 80 per cent is telling me that refiners are struggling to balance demand with supply. It appears to be a concerted move on the part of Big Oil to keep production down in the hope that demand will pick up, helping to support the price of the refined product. It appears that the move may be working. While demand is just half of a percentage point above last years figures, there was a small build in gasoline inventory last week leaving inventory there above that of last year by almost ten million barrels.”

“The distillate outlook, heating, stove and diesel prices, are showing mostly the same trend. Inventories there were impacted by just five hundred thousand barrels leaving inventories over last year up by 40 million barrels. That could spell better news for distillate fuel users if that trend keeps up. Higher than usual distillate inventories matched with lower demand this last week could carry through until springtime lessening the probability of higher heating oil prices and saving the consumer some grief. I’m hopeful that that trend will continue and help push prices down even more, or at least not increase prices to the extent first brought forward.”

-30-

For more information, contact;

George Murphy
Group researcher

No changes in the numbers this week

Just to let everyone know that a boring week in the markets still carries the weight of boredom around it!

Not much happening with the numbers. At least we can wait for another week before we see the regular price setting.

So far for this period, all numbers were up slightly but no cause for concern as they don't meet the interrupter criteria.

Regards,

George

Modest drops in pricing on the way

Media release

Conception Bay South, NL, November 17, 2009- There will be some retreat in petroleum pricing this coming Thursday, that’s according to George Murphy, group researcher and member of the Consumer Group for Fair Gas Prices.

“There’s not a big lot there for the consumer but, at least the numbers are pointing down according to the data I have,” said Murphy. “While oil has been trading in a volatile way the past two weeks, it has always returned to the $80 dollar a barrel mark and that volatility shows itself in bullish spot pricing numbers.”

“Consumers should see stove oils drop by 1.37 cents per litre, diesel to drop by 2.0 cents a litre and gasoline should drop by 2.3 cents, that’s with all fourteen days of data in hand now. Heating oils should drop by close on what I have for stove oils, but with the jet fuel component remaining a missing factor in figuring out its trend, we can only go by the stove oil number to surmise what will happen with pricing there.

“Good economic news is helping to support pricing of oil products this past session. Signs of economic recovery are helping to spur investment in commodities over the US dollar and that helps to support pricing. In spite of this, related commodity pricing of petroleum products fell from last week as a result of builds in crude oil, gasoline and distillate supply.

“That fact, together with a drop in refiner capacity to a near historic low of close on 79 per cent, is still signifying some possible trouble for supported oil prices in the future when more refineries come back on-line after maintenance shutdowns. Look for oil prices to remain close to where they are now for the time being until the economy shows more proof of consumption of available inventory.”

-30-

For more information, contact;

George Murphy
Group researcher/Member

Numbers down so far this pricing session

Here's what I have as we drift along this pricing session.

Remember that the winter heating oil blend has changed with the addition of jet fuel as part of the mix. That means that the heating oil number consists of 75 per cent jet fuel and 25 per cent of number two type oil (stove oil) so, when I quote that number, it can only be used as a possible indicator of where heating oil could be going.

The stove oil number remains the same all year round. The quote you'll see from here on until April month still applies.

With twelve days of data out of a possible fourteen days needed in order to predict the final number, it certainly looks like a drop in prices will be forthcoming this coming Thursday morning for all fuels. Here's what I have so far, keeping in mind that the next two business days will determine the final result but, all indications from the markets are that the drops in pricing should be slightly more than what I have here.

• Heating and stove oils are down by 1.48 cents per litre.
• Diesel fuel is down by 2.0 cents per litre, and...
• Gasoline shows down by 2.5 cents a litre.

I'll be posting a press release here this coming Tuesday night, close on 11:00 PM Newfoundland time that will have the final predicted drops to come.

Regards,

George

Numbers only down slightly

Media release

Conception Bay South, NL, November 3, 2009- Consumers in Newfoundland and Labrador will still be dealing with high prices this week when the Public Utilities Board moves to set prices this coming Thursday. That’s from George Murphy, group researcher with the Consumer Group for Fair Gas Prices.

“Numbers have shown little change this week, even though they show very modest drops in prices. Crude oil prices still averaged only a buck a gallon down from last weeks price changes. Stove oils show down by a mere 32/100ths of a cent, diesel is down by 7/10ths of a cent while gasoline shows down by 1.5 cents a litre.

“Heating oils will probably be down although I can’t get a fix on the number. This Thursday should be the official start of heating season when the PUB adds jet fuel to the winter heating blend. It’s the jet fuel numbers that we can’t get a fix on from any sources. It’s this time of year when I can only use the stove oil number as a guide, rather than the actual change, that will occur with heating oils.”

-30-

For more information, contact;

George Murphy
Group researcher/Member
Consumer Group for Fair Gas Prices

Numbers confirm interruption to fuel prices is likely

Media release

Conception Bay South, NL, October 27, 2009- After nearly two weeks of rising oil prices, consumers in Newfoundland and Labrador are set to pay more for fuel products this coming Thursday morning when the Public Utilities Board moves to use the interruption formula to re-adjust prices.

“I’ve been tracking elevated spot prices for the last several days, said George Murphy, group researcher for the Consumer Group for Fair Gas Prices. “According to the rules of interruption, you need seven days of data where the spot price exceeds that of the previous price setting by at least four cents a litre. The data indicates movement upwards for all fuels I monitor. Here’s what I have:

• Heating and stove oils will increase by 4.41 cents per litre.
• Diesel fuels will increase by close on 5.1 cents per litre, and…
• Gasoline will increase by 7.0 cents per litre.

“It’s disturbing to see an increase in fuel prices now, particularly when the economy is trying so hard to recover from the recent downturn. These increases as of late, take a lot of momentum out of the economy and removes disposable income from the consumer, particularly as we are also getting close to winter and the important Christmas season. All this is coming in on the tail of a fuel surcharge increase from Marine Atlantic and it does nothing but increase the inflation rate to the Newfoundland and Labrador consumer.

Draw-downs in gasoline inventory, a much defined drop in refiner capacity and a pick-up in economic recovery are reasons for the recent hikes in prices.

-30-

For more information, contact:

George Murphy
Group researcher/Member
Consumer Group for Fair Gas Prices

Update #2

Monday, Monday...

Didn't change much, so it's not so good for me.....

Even though we saw oil slide today because of the OPEC news today, we lost ground against the US dollar and that keeps the numbers up.

OPEC is promising to "pick up production if oil prices get too high". Yes, I found that one hard to believe too...

Here's what I have for this Thursday, with one more business day of data to get before the final numbers:

• Heating and stove oils now show up by 4.37 cents a litre from Sundays'4.48 cents, down a fraction.
• Diesel now shows up by 5.1 cents a litre from 5.3 cents on Sunday, and...
• Gasoline shows up by 6.9 cents a litre!...

I'll be back in here tomorrow night with the final call on what should be happening for Thursday.

Remember to spread the word on this one. This one is SUBSTANTIAL, to say the least!

Regards,

George

Update #1

Interruption to all fuel prices likely

Just a warning here that you're going to get a few notes from me between now and Tuesday night simply because, by the look of things, we're going to see an interruption to fuel prices by this Thursday coming.

I think everyone knows that, in order for fuel price interruption to occur, you have to have seven days where the average price movement is four cents a litre over or under the previous price setting.

First off, numbers from Wednesday of one week to the Tuesday of the following week are used to determine if fuel price interruption is warranted. In this case, I have data that covers from Wednesday the 21st to Sunday, the 25th. The Friday numbers are used for both Saturday and Sunday as there is no market trading on those days. Cut-off on Tuesday, there is a two day time frame for notification purposes and we see price changes on Thursday.

Since the last price setting, I have a recorded movement greater than required for the five days so far. Two more days to figure in here yet, but with oil trading over $80 US a barrel, I don't think there will be a mass sell-off before the Tuesday evening cut-off, which is the seventh day of data needed to come up with the final number.

Here's what I have so far, keeping in mind that I have to get two more days of data.

• Heating and stove oils show an upwards movement of 4.48 cents a litre.
• Diesel shows upwards movement by 5.3 cents a litre, and...
• Gasoline shows upwards movement of 6.4 cents a litre.

You might want to forward this note to everyone you know. With two more days to go, there could be larger numbers to come.

I'll keep you all up to date on this. Next posting will be Monday evening so, check the blog then for another notice.

Regards,

George

Oil gains Ten bucks in two weeks
Numbers up for all fuels

Media release


Conception Bay South, NL, October 20, 2009- Oil has spiked close to ten dollars a barrel over the past two weeks and consumers in Newfoundland and Labrador will have to pay a little more at the pumps as of Thursday morning as a result, that’s from George Murphy, group researcher and member of the Consumer Group for Fair Gas prices.

“Oil has increased to a new one year record and, in spite of the rise in the Canadian dollar; there will be increases to all petroleum product prices this week. It could very well just be the start of a round of increases to consumers coming off the latest binge in buying of commodities as economic recovery continues to gain steam,” said Murphy.

“Numbers show that heating and stove oils will increase by 3.25 cents per litre, diesel by 3.8 cents and gasoline will increase by a marginal 1.8 cents a litre. The real story of increases to gasoline may come next week, that’s if market conditions hold up. We may, in fact, see interruption to prices if we don’t see a retreat in oil or if the Canadian dollar stalls in its advance against the US greenback.

“A surprise draw on gasoline inventories, slight inventory building and investment in commodities as a hedge against inflation have all pared into the markets this week past. It also didn’t help to see oil increase with improving economic news, especially with an increase in demand and a drop in refinery capacity. The question is now: How long will the price of oil remain elevated and what the ramifications are of that to the consumer? We’re starting to see an increase to consumers for heating oil products before the onset of winter and that brings some worry to lower income consumers of heating oil products.

-30-
For more information, contact;

George Murphy
Group researcher/Member
Consumer Group for Fair Gas Prices

PS: I tried to post all the data I had but that failed miserably. I'm going to have to do a little experimentation with that to see if I can't get that all in so you can all see where i get all my numbers.

No pricing changes this week!

Here's what I have so far for this pricing session.

• Heating and stove oils are up by 1.22 cents a litre.
• Diesel numbers show 1.4 cents up from last weeks price setting, and...
• Gasoline shows DOWN by 7/10ths of a cent.

As you can tell by the numbers, there hasn't been any movement in the numbers even though the US price for oil, and it's related, refined commodities has increased a lot.

The reason?The meteoric rise in the Canadian dollar which is an important factor in gauging prices.

Since the numbers were last set, as of Tuesday last week, I've seen the Canuck Buck gain almost five cents against the US greenback.

So, what does the rise in the dollar have on refined commodities then, you ask?

If I take the last days trading and account for the gained five cents in the banking markets, then we're talking a saving to consumers of a rough 2.5 cents on heating and stove oils, 3.5 cents a litre on diesel and three cents from gasoline.

We dodged any fuel price interruption this week, thanks in part to the dollar's rise the past seven market days!

Prediction for you for next week: while the numbers are steadily increasing for oil and related commodities, the dollar will gain again this week and that will offset any increases coming down the pipeline for consumers. Distillate fuels like heating, stove and diesel will see piece-meal increases while gasoline will show "steady".

Look for the Canuck Buck to show parity with the US greenback by next week, not next January as some market figures are telling you. It's coming sooner rather than later.

Regards,

George Murphy
Group researcher/Member
Consumer Group for Fair Gas Prices
gasprices@hotmail.com

Prices close to a buck a litre short-lived
Gasoline set to rise again

Media release

Conception Bay South, NL, October 6, 2009- Gasoline prices are set to rise again, that’s according to George Murphy, group researcher for the Consumer Group for Fair Gas Prices.

Since last week, I’ve been seeing some evidence out there that there is some economic recovery happening and that is bringing with it the promise of a possible rise in interest rates and more investment in commodities like petroleum products. Last weeks inventory data out of the United States also saw a surprise draw on gasoline inventories signifying an increase in demand and all these factors are combining to show us an increase in gasoline prices this week,” said Murphy.

“Gasoline prices are expected to increase by close on 3.1 cents per litre this Thursday while, heating and stove oils are set to drop by 35/100ths of a cent. Diesel prices are also showing a modest drop of close on 6/10ths of a cent per litre. Gasoline prices dropped last week almost 4.8 cents as a result of the use of the interrupter formula.

“I’m not alarmed by this increase as it is coming as a result of a number of other factors. A surprise draw on inventory coupled with a drop in refiner capacity as a result of service shut-downs helped the spike in gasoline pricing this week. Even though price was lower, there still remains a huge inventory build that has to be dented before we see any significant increases to consumer prices on the way. The big unknown here however is: How long will the recovery last and is it artificial? Are we going to see another economic collapse as a result of higher interest rates that could curtail spending?”

-30-

For more information, contact:

George Murphy
Group researcher/member
Consumer Group for Fair Gas prices

Letter to the Prime Minister
re: Marine Atlantic Fuel Surcharges

October 5, 2009
Right Honourable Stephen Harper
Prime Minister
Government of Canada
Office of the Prime Minister
80 Wellington Street
Ottawa, Ontario
K1A 0A2


Dear Prime Minister;

In June of 2009 I wrote to your office expressing some concerns as regards to the placement of fuel surcharges on the Marine Atlantic ferry route between Newfoundland and Labrador and Nova Scotia. At the time, fuel surcharges of almost six per cent was placed on the movement of goods and services across the Gulf of St. Lawrence that was meant to recover the added costs of marine based fuels necessary as a result of increasing prices. My concern at the time was that there would be an added inflation rate placed on any goods and services coming into the province, or on exports leaving the province bound for mainland destinations. This issue still has not been addressed.

The concern is still there and it has now resulted in another increase coming to Marine Atlantic ferry users of an additional 7.8 per cent to be placed on ferry usage starting on October 26, 2009. Total surcharges have now escaladed to almost fourteen percentage points on goods and services both coming and leaving Newfoundland and Labrador. As of today’s release from Marine Atlantic, there is still no input by the Federal Government to have Marine Atlantic’s problems with fuel purchase prices being passed to consumers and business here.

While it may be true that energy costs are based on what happens on the open trading markets, I believe that the addition of fuel surcharges can be readily addressed on the part of the federal government by adding additional funds, as needed, to the budget of Marine Atlantic on a quarterly basis to help prevent any added increases in prices to consumers or businesses in Newfoundland and Labrador. While the automotive industry can avail of federal government investiture of funds to help support business in both Ontario and Quebec and consumers see the benefit of that, consumers here, as well as business, are now susceptible to an added and artificial cost to goods and services that help keep our economy sustainable in this tough economic time.

The last thing consumers and business need here is an added cost to goods and services and what amounts to an “export tax” on goods and services to consumers on the mainland. Business here already faces tough choices with the recent economic downturn and now faces extra costs to keep goods, services and jobs going here in the province.

While the federal government has chosen to allow Marine Atlantic to run itself as a separate entity, sometimes this “corporation “ has the responsibility, as does the federal government, in aiding economic stimulus wherever and whenever it can. In this, the federal government has a choice by either leaving us susceptible to extra pricing pressures or it can alleviate and participate in our economic recovery in Newfoundland and Labrador by adding additional funds to the Marine Atlantic budget by covering off the additional costs to Marine Atlantic as a result of added fuel pricing pressures. While the cost of fuel has added pricing pressure amounting to an added 3.8 million dollars for the next quarter, it seems miniscule compared to the massive 10.7 billion to the automotive industries of Ontario and Quebec.

I hope to persuade the government to do the latter and absorb the extra costs, thusly preventing the necessary increase in prices to consumers and business immediately before the important Christmas season. Again, I am asking you to consider this move to show the federal governments participation in the recovery of the Newfoundland and Labrador, and the Canadian economy.


Yours sincerely,


George Murphy
Group researcher/Member
Consumer Group for Fair Gas Prices
gasprices@hotmail.com

Marine Atlantic increases fuel surcharge

They did what was predicted, only they done a heck of a lot more.

My numbers at the start of the month showed a possibility that Marine Atlantic would increase its rates by close on three percentage points. However, today Marine Atlantic announced that it will increase its fuel surcharge from the six per cent rate to a whopping 13.8 per cent, an increase that more than doubles the surcharge on ferry rates.

While the increase may be justified, it's who has to pay for it that doesn't suit well with anyone in Newfoundland and Labrador. An extra hunk of cash from any business in this province in the wake of recession doesn't bode well, especially knowing surcharges will increase as early as October 26th this year.

Again, we're faced with an increase in the artificially placed inflation rate on any goods coming into the province and again, we have to deal with increased costs of exporting from this province, not to mention increases in consumer prices leading up to Christmas.

I'm of the thinking we need a concrete solution to this problem of extra fuel costs to a government run service that was guaranteed with confederation and it's terms of union. Why is it that the federal government is taking a hands off approach to this when they have acted to pour millions into the mainland automotive industry? Why does the government not put extra money into Marine Atlantic just to offset the rising costs of marine diesel fuels?

It would be the Federal Government equivalent of supporting the Atlantic Canada and Newfoundland and Labrador economy by doing so, the same as they've supported the auto industry in Ontario.

I just think it's due time the Prime Minister's office dealt with the matter rather than make it a "self sustaining" marine operation.

Oh well. Time to write the Prime Minister's office again!

Regards,

George

Numbers show interruption to gasoline prices
No other fuels affected

Media release

Conception Bay South, NL, September 29, 2009- The numbers are there for interruption to gasoline prices to occur, that’s according to George Murphy of the Consumer Group for Fair Gas Prices.

“Over the past week, there has been considerable downwards volatility in the markets and gasoline prices are showing a drop coming to consumers. We just don’t know if the Petroleum Pricing Office has those same figures. My numbers show a decrease coming at the pumps of at least 4.9 cents a litre and it could be more than that, if volatility has indeed been a missing factor in the numbers,” Murphy said.

“Heating, stove and diesel prices don’t have the same downwards trend as gasoline, although those numbers are also down slightly. Right now, heating and stove oils show 1.72 cents a litre down with diesel down better than 2.1 cents a litre, not enough on all three counts to warrant interruption to those fuels.

“A drop in demand with the end of the summer driving season coupled with a lack of confidence in any economic recovery resulted in oil prices dropping along with corresponding refined commodities. Inventories are bulging with product and it’s not likely to change in the coming weeks. There’s going to have to be a huge increase in consumer demand along with a drop in refinery capacity in order to impact gasoline inventories right now.”

-30-

For more information, contact;

George Murphy
Group researcher/Member

Update #2

Gasoline still showing "Down"

With just one more day to go, gasoline is still showing an interrupt scenario for this coming Thursday morning.

So far, gasoline now shows down by 4.27 cents or almost 4.9 cents a litre including taxes.

Here's hoping oil trades relatively unchanged tomorrow!

Tune in tomorrow night for the final outcome. I'll have a release posted around eleven or so, if interruption is the case.

Regards,

George

Early interruption coming?

First off...

This morning I got the emailer from this site with the predicted drops in pricing to come for Thursday...

Problem is, I never got it until today, a day later than the usual.

I'm guessing that it has to do with the service itself. Fact is, is that I did make that posting on Tuesday night, a full two days ahead of the auto emailer delivery.

I wonder when you'll get this one?

Anyway, just a short note here...

With oil dropping below $67 US a barrel today, I fully expect that when I get home from work later tonight, that I will find that gasoline prices on the New York mercantile exchange will have dropped so much so, that they would have entered into interruption territory. Wednesday's numbers put the average down by 3.2 cents a litre plus taxes but we need a four cent a litre average between Wednesday and Tuesday of next week.

In other words, go light on the gold stuff as we're probably going to see prices below a buck a litre this time next week...IF...the downwards trend in oil continues into Tuesday.

Look for another posting on that topic on Tuesday night if the numbers are there for it!

You might want to pass the word along as well....

Regards,

George

Update #1

It's Saturday morning and I'm fresh in the door.

Just checked the latest numbers and they now show a drop of 4.24 cents a litre, not including taxes for gasoline. That puts it in the range needed for interruption.
It's all now going to come down to the next two business days.
Unbelievable, but Thursday morning may very well find us below a buck a litre again!

I'll keep you all updated!

George

Prices should drop this Thursday

Winter heating forecast!

Media release

Conception Bay South, NL, September 22, 2009- Consumers in Newfoundland and Labrador can expect to see a slight downwards adjustment to prices this coming Thursday. That’s when the Public Utilities Board moves to set prices again.

George Murphy, group researcher for the Consumer Group for Fair Gas Prices expects to see numbers for all fuels to drop slightly in the wake of the fluctuation in oil prices and its related commodities over the last two weeks. “I expect heating and stove oils to drop by 97/100ths of a cent, diesel to drop by 1.2 cents a litre and gasoline to drop by two cents per litre. It may not be a lot but it does signify both stagnation in the increase in oil prices and a steadying out in oil’s refined commodities. Having said that, we also haven’t witnessed any appreciable increase in world demand and that has helped keep prices between $68 and $72 a barrel US.

Marine Atlantic to keep fuel surcharge in place?
“There has been no drop in marine type diesel fuels that would show in the consumer favour. I expect that Marine Atlantic will make no moves in reducing their fuel surcharge. As a matter of fact, residual fuel oil prices have increased in price since the last time the company placed fuel surcharges on Marine Atlantic rates so; it wouldn’t surprise me to see them act in placing an increase to rates this week coming when they look at the numbers for the last quarter.

Winter heating forecast is in
“Consumers can expect some consolation that we will not be seeing prices hit $1.20 a litre as we did a short time ago. This winter looks somewhat better than in 2007 as numbers are showing a projected November number of close to 70 cents per litre with stove oils reaching 72 cents. I expect winter heating oil prices to peak at close to 80 cents in February of 2010 before we see a decline with the advent of spring weather breaking in the US northeast. November of 2007 showed heating oils at 82.4 cents while stove oils hit 84 cents. It was early in 2008 that we were witness to the skyrocketing price of heating oil until the price of oil collapsed later in July of that year when oil prices hit $147 US a barrel. January 2008 heating oil prices hit almost $1.05 a litre as a result of demand on jet fuel along with a high jet fuel price.

Reasons for heating oil being a little cheaper this year
“There are several reasons why heating oil will be slightly cheaper this year. Chief among them are factors such as an elevated Canadian dollar that is helping to keep the price down, a drop in demand compared to 2007 and elevated inventories as compared to that year. That same year, we weren’t dealing with a faltering economy as we are now, so prices for any distillate group fuel was increased from 2006 and that showed at the fuel truck level. This year, for example with jet fuel, which is a component of the winter heating blend in the province, with demand down, I’m expecting to see a slight retreat in the heating oil price overall when the PUB sets prices the first week of November when jet fuel enters the mix.

“Crude oil and distillate inventories are higher than normal for this time of the year. Usually, we see some tightness in inventories but distillates, for example, are almost 40 million barrels more than what they were for the same time frame last year. There’s going to have to be some heavy economic activity happen or an increase in demand if Big Oil is hoping on increasing the price of some distillate product.

“Market conditions could change things, but barring any unforeseen circumstances like a drop in the dollar, an increase in oil prices spurred on by an improving economy, the possibility of OPEC cuts or a slack demand for the product because of warmer than usual winter weather, I am expecting not too much fluctuation in price overall. If however, we see an increase in oil prices such as was witnessed later that winter of 2007 then the game is up and you can be assured that consumers will suffer as a result. The price that is projected now is still unaffordable by most people so government will again have to step in and help people out with rebate-type programming.”

-30-

For more information, contact:

George Murphy
Group researcher/Member
Consumer Group for Fair Gas Prices

Numbers pointing down but no interruption forecast

Six days out of seven needed and the numbers only show a rough two cents a litre down on most fuels.

Gasoline shows downwards by a rough 2.5 cents but that's still not enough for interruption to occur. Four cents a litre over or less than the previous price setting is needed for that to happen.

Be watching for next weeks update as I'll have some preliminaries on what to expect for the winter heating season to come. from the look of things, it may not be as bas as early last year!

Regards,

George

Consumers to catch a break at the pumps?
Diesel, heating and stove oils will drop

Media release

Conception Bay South, NL, September 08, 2009- Consumers of diesel, heating and stove oils will all be looking at lower prices this coming Thursday morning when the Public Utilities Board moves to adjust prices, that’s according to George Murphy of the Consumer Group for Fair Gas Prices.

Gasoline numbers
“At this point we have two different numbers for gasoline, one that shows a one tenth of a cent increase on gasoline, and the other showing a 2.8 cent a litre drop coming. This was all necessitated because of the differential we have been seeing between our numbers and those of the PUB. There’s been a large difference as of late that I’m trying to get a handle on, and I may have it. I’m betting on the price dropping this week for gasoline.

“I can’t say if they have changed the way they do things at the P.U.B as of late. All I know is that while my numbers have been dead on for the other fuels I measure, gasoline has been out substantially and it concerned me. I had to go back for a few weeks and work up some other models to try and account for the differences. I think they’ve changed their ways of doing things for that fuel. We’ll find out Thursday morning if I’m back in the saddle again.

Other price changes expected
“Heating and stove oils are expected to take another drop this week of 2.82 cents a litre. Diesel is expected to drop by 3.3 cents a litre following the trend in the last two weeks of crude oil prices. Crude prices over the last two weeks started out at $72 US a barrel, bottomed at $68 US and climbed again today to reach $71 US a barrel. Some of the focus of the markets has come off distillates again as some economic worries are again permeating the markets in the face of dropping jet fuel demand and worries over the H1N1 virus and its economic effects.”

-30-

For more information, contact;

George Murphy
Group researcher/Member
Consumer Group for Fair Gas Prices

Numbers showing down

Numbers are all showing down for diesel, heating and stove oils.

Just not sure on gasoline yet.

It's a case where I have two models I'm working with that either show no change in the numbers so far this month or there is a modest 2.6 cent a litre decrease coming. That's with thirteen days out of fourteen showing their ugly faces.

I'll put in a full posting tomorrow night with all the numbers.

Regards,

George

Will Marine Atlantic add more on fares this week?

"Will" might be exactly what they will do...

Just finished a preliminary look at the numbers for residual fuel oils over the past three months and they're all up, meaning?...

The possibility is here that Marine Atlantic will, once again increase fuel surcharges by another two to three per cent. That's what the numbers are telling me. We have seen increased numbers from June month, almost 38 cents a litre to a point last week that saw the price per litre hit 46 cents per litre.

If an increase is coming, then there should be an announcement imminent.

As to why they wouldn't make an announcement on added fuel surcharges?

The possibility of an election looming as of today's news. Makes one wonder if we aren't being pawed around by the crown corporation in the process. If you don't hear of an increase, or an announcement from the Prime Minister's office on the handling of extra fuel surcharges, then we can assume that there are some shenanigans going on in the light of an election call.

Either way, the people of the province here deserve a straight answer on the going's on in the "Strait".

It's time though, for the office of the Prime Minister to deal with the issue and protect the consumers of Newfoundland and Labrador from the ravages of fuel surcharges passed to us with an addition of funds to help Marine Atlantic absorb the added costs of fuels when necessary.

If then, there is an election around the corner, every person in this province should make this their tantamount election issue...Put a stop to added fuel surcharges on the Marine Atlantic run.

More on this one to come!

Regards,

George

Numbers are up but only slight increases expected

Media release

Conception Bay South, NL, August 25, 2009- Last week’s surprise draw on inventory will translate into some minor increases in fuel prices when the Public Utilities Board moves to adjust prices this coming Thursday, that’s according to George Murphy, group researcher for the Consumer Group for Fair Gas Prices.

“The numbers are not too bad in the wake of market activity over the past two weeks. We witnessed a movement upwards in crude oil prices from $69 US a barrel, reaching a high of almost $74 US and a slight retreat to Tuesday's price of $71.55 US a barrel. Spot prices for most fuels also showed that there was only slight movement upwards in the prices for refined commodities”, said Murphy.

In the numbers
“The numbers show a slight increase to all fuels, some too close to call whether there will be any movement at all in price. Heating and stove oils show an increase of 85/100ths of a cent, gasoline shows an increase of 1.5 cents a litre while diesel fuel shows a bare one tenth of a cent increase. With the margin of error of three tenths, diesel fuel may in fact show a slight decrease, if no change at all.

Hurricane Bill brings questions
“It remains to be seen whether Environment Canada will see the data on Hurricane Bill and announce it as landing as a category one hurricane. While I haven’t heard if the North Atlantic refinery faced any difficulties with the hurricane the other day, it begs to question if, in the future more hurricanes will race into the coastline of the province affecting the viability of the placement of refining facilities in Newfoundland and Labrador coastal waters. We know what hurricanes did to Gulf of Mexico refineries in 2005 in the wake of Katrina and Rita. I believe that this is going to be a paramount issue in the further development of onshore processing of crude oils in the future if in fact there is going to be a distinct change in weather patterns that will bring hurricanes closer to Newfoundland and Labrador waters.”

-30-

For more information, contact;

George Murphy
Group researcher/Member

Oil on the edge of collapse?

A lot of breaking news stories seem to be following the trend that I detected some time ago that was fully leading to another collapse in oil prices, and, for some at least, it couldn't happen at a better time.

So, what evidence is there that a collapse is possibly in the works?

Let's look back at the last few weeks to set this one up for you and help you draw that mental picture....

Fact #1: While we have been witness to a small spike in prices during this summer that saw gasoline here in Newfoundland and Labrador reach $1.10.4 a litre just the other day here in St. John's, we simply didn't see a large increase in demand based from prices a lot lower than they were the same time last year. Demand for gasoline has remained flat and now we are at the end of the summer driving season and not a hurricane in sight of the Gulf of Mexico.

Fact #2: Just today, US consumer confidence, in a survey done by Reuters and the University of Michigan and reported by Bloomberg, conclude that consumers south of the border continue to be skeptical over any economic recovery. That means that consumers aren't going to be buying and a delay in any recovery of the economy.

Fact #3: The Energy Information Administration reported a good build in crude oil inventory, albeit a small draw on gasoline. The report also concludes that refiner capacity has dropped again to 83.5 per cent from last week's numbers. Refiners are trying to keep ahead of the massive drop in consumer demand and they're also trying to reign back production so they don't overdo it with current supply. The numbers for distillate fuels don't look much better. Demand for both heating oils and jet fuels has crashed again this week ending the summer dream of increased profits for Big Oil.

Fact #4: The price for Brent type crude oil has surpassed West Texas Intermediate, now resting some Three dollars above WTI as of today. Basically, there is too much inventory floating around, not only in onshore storage tanks but also in tankers, simply waiting for the value of WTI to increase and/or be consumed. It's not!

So, what to expect in the coming weeks?

Look for a mass retreat in prices that some are predicting will bring prices back to where they were in April. Cheap to the consumer and murder on the provincial and federal treasury!
At least, from this perspective, here's hoping the news comes to fruition! It's going to be a couple more weeks before we feel it at the pumps but, needless to say I think we've hit the summer peak.

Regards,

George

All numbers up for Thursday
Gasoline, diesel, heating and stove oils to increase

Media release

Conception Bay South, NL, August 11, 2009- Consumers in Newfoundland and Labrador will see prices for all petroleum products increase this coming Thursday morning when the Public Utilities Board moves to adjust prices.

“Other areas of the country have already been hit with increases in prices. We’re no different here. The numbers are showing an increase of 3.67 cents a litre on heating and stove oils, a 4.4 cent a litre increase to diesel fuels and a four cent a litre increase coming on gasoline pricing,” said George Murphy, group researcher for the Consumer Group for Fair Gas Prices.

“An increase in oil prices coupled with a US drop in refinery capacity along with the falling US dollar are to blame this time around, even though there has been no increase in demand. What I do see here is an attempt by the US refining industry to control output with demand factors. Refinery capacity has dropped over the past three weeks from close to 88 per cent to almost 84 per cent of capacity and that means pressure on refined commodities.

“Pare with that the fact that there are some inflation fears in the markets meaning a heavier level of investment in commodities rather than the US dollar. That’s why the Canadian dollar has gained some strength in recent weeks. The basic spot price has been insulated a little as a result and the increase in gasoline prices for example, has been mitigated somewhat. Consumers in the US have seen an increase of almost thirty cents a US gallon while we’ll be looking at a four cent a litre increase at the pumps here, or about 17 cents a US gallon.

“Last week showed its ugly head when the news of the drop in refiner capacity was published. There is a move to control output here in North America, particularly in the US according to the US Energy Information Administration. The drop translated into a drop, albeit slight, in US gasoline inventories. It was a concerted move by the oil industry to support prices in the face of very weak demand in spite of lower prices as compared to last years numbers.”

-30-

For more information, contact;

George Murphy
Group researcher/Member
Consumer Group for Fair Gas Prices

Numbers are up!

All The data isn't in quite yet. There is one more day to go.

However, there is enough data to show for increases coming down the pipes for this Thursday as a result of market activity this past two weeks. While the interrupt scenario thankfully didn't play out, the rise in the cost of oil will play into your pocketbook later this week.

One more day to go, like I say, but here's what I have so far.

• Heating and stove oils are up by 3.51 cents per litre.
• Diesel (9 days of data) shows up by 4.3 with taxes in, and...
• Gasoline is up by 3.7 cents a litre.

Just a final note here. The last price change showed i was off somewhat from the actual that occurred here and I have not taken that into account in the final summation of my numbers. The actual increase to gasoline might vary somewhat higher than what I will have here now, let alone that of tomorrow night when i post again with what I have. This one is just to keep you all ahead of the game.

Oh well!

Time to hit the pumps again!

Regards,

George

Just in case, you might want to top off the tank!

My numbers don't show interruption to gasoline pricing is definite, that's first off...

However, the last two trading days have me a little concerned as to how much volatility there was in the markets since the last pricing adjustment last week.

When the last numbers came out, and only showing a 3/10ths of a cent a litre increase, I had it different by a full cent. That's leading me to believe that there was possibly enough market volatility over the past few days to warrant something happening with the numbers that I can't track.

Of particular interest are the last two days on the markets that put gasoline spot prices over 60 cents a litre from my last average of 53.87 cents just a week ago. Yes, a full six cents since the last adjustment.

Faulty data over the weekend is the kicker. I haven't been able to get hold of the prices between Friday and Sunday night that could spell it out in the numbers for sure. In other words, while the last two days are well over those required for interrupt to occur, I can't predict that it will happen on Thursday as a certainty. So far, my base average for the days I do have put it close to interrupt territory.

Another clue that it might?...

The base price of West Texas Intermediate, which I take a measure of, has increased by almost eight bucks a barrel...

Enough said!...

I think I'd be apt to hit the pumps Wednesday night, just in case prices do move Thursday morning. In the event they don't move pricing up this Thursday, you can be darned sure that if the market trend does keep up, we'll be looking at substantial increases next week.

Regards,

George

Numbers show 'up a little"

With all the goings on at my place these last two weeks, I really haven't had the time to do a lot of posting and tracking of the news in the oil markets.

I have had the time however, to go though the numbers and see what's in store for the consumers out there in Newfoundland and Labrador.

Here's what I have for Thursday morning:

• Heating and stove oils to increase by 1.55 cents per litre.
• Diesel to increase by 1.6 or 1.7 cents per litre, and...
• Gasoline to increase by 1.6 cents per litre.

The US dollar lost against other world currencies over the past two weeks and that resulted in heavy investment in commodities like oil, driving those prices upwards over the time frame. Oil gained almost $8 US barrel since July 14th.

One side effect was that the Canadian dollar also was one of those currencies that gained ground a s a result of the investment in oil, with the dollar gaining over three cents against the US greenback.

Anyway, prices will be up slightly, not that it wasn't predicted to be like that with some volatility over the summer!

Hope it all helps!

Regards,

George

No increase in prices this week

Watching the markets the past few days probably made some people a little nervous, especially in the thinking that with a rise in oil prices of almost $4.50 US a barrel.

My email has been littered with the question "If"...

Here's the reality...

The numbers are not there for interruption to prices to occur. Both heating and stove oils as well as diesel, are now at "break even" with neither an increase or decrease showing in the numbers.

Gasoline prices show down by a half cent, so far...

While spot prices for all the fuels I measure has gone up a little, we are still a little under the average for the last price setting this week. Keep in mind that, if the trend continues, we may see a slight bump in prices at the next price setting next week, that's if the numbers allow for it and we see the price of the refined comodities take off again. This latest run-up has been caused by positive economic news out of Chine and a decrease in the US dollar. Of course, whenever we see the US dollar slide, it's a sign that traders will start investing in commodities like refined oil products, as a hedge against inflation.

Hope this will clear the air a little?

Any questions, drop me a note...

Regards,

George

So, where are prices going from here?

It's a nice summer morning here in St. John's, especially nicer after hearing the news that fuel prices are down; and a lot of questions from people asking if the downwards trend will continue...

Here's hoping! The evidence is certainly pointing towards "steady as she goes" and also "down" in the best of scenarios. If I were an oil trader, I think I would quit, let's put it that way.

Right now, the news is not good if you are an oil man. With waning consumer demand for gasoline and another build in inventories this week, it's hard to wonder why there should be any price increase in the foreseeable future. The fact that North American drivers just aren't buying to the same degree that a lower price should dictate, should be a forewarning to most of the change that drivers are facing. Consumers are not cutting back on consumption because of price, they are doing it out of necessity that the economic situation is bringing to them. Prices for gasoline are now about 35 per cent lower than the same time period last year, yet demand, is recorded at a mere 6/10ths of a percentage point above last years numbers.

Consumers can't spend because of the uncertainty of the ongoing economic recession. I like to call this "enforced conservation" a new economic term you'll soon be hearing about in your favorite business news network or late night TV host!

Enter the ongoing prospect of an oil glut in the markets. While the data from the US Energy Information Administration showed a draw on US inventory, the same still shows a huge 47 million barrel surplus in stock in holding tanks that should be heavily drawn upon during summer months of the past. The word from OPEC is that they produced some 57,000 barrels per day more than their own self-imposed quotas during the month of June and this is only now coming into the North American inventory grid. Talks are abounding of $45 a barrel US oil in August, not heard for a long time during peak summer driving season. Some experts like Philip Verlager are even predicting $20 US a barrel oil and an imminent collapse in prices this winter at best.

Also adding to the downwards pressure on gasoline pricing in the coming weeks is a pick-up in US refinery capacity, up again this week to almost 88 per cent. With added capacity and waning demand, why would I as a trader even bother investing? There's no return here.

The only possibility of upwards pressure on oil will have to come from here but, right now, it's showing just like a St. John's July 16th morning : Nothing but clear skies!

The trend of falling prices might be around for a while. The news from the Alberta oil fields won't be all good if that's the case.

Hope this answers a few questions out there?

Regards,

George

Update #2

Final Numbers

Here's what I have to come for Thursday morning with all fourteen days of data on hand:

• Heating and stove oils to drop by 4.79 a litre.
• Diesel down by 4.7 cents a litre, and...
• Gasoline to drop by 6.3 cents a litre.

I tried to get a copy of the press release posted but, for some ungodly reason, it wouldn't allow me.

The old "copy and paste thing just didn't do it this time. It's something I'll have to work on, I guess!

Hmmm....

Regards,

George

Update #1

Numbers still showing "down"

Numbers are still reflecting the big drop in spot prices last week and they will impact all prices this week (Thursday) when the Public Utilities Board sets prices for the next pricing period.

Here's what I have with thirteen days of data at hand.

• Heating and stove oils are down by 4.55 cents a litre.
• Diesel is down by 4.5 or 4.6 cents a litre with taxes in, and...
• Gasoline is down by 6.1 cents a litre.

One more day to go here but there may be no more real changes in pricing other than what I have. Another day may mean a couple more tenths off these numbers.

I'll post another update for everyone tomorrow evening and post the press release too.

Regards for now!

George

The week so far...

Here's a little update on the numbers I have. After the disappointing finish up to Tuesday, I think maybe I should keep everyone in tune as to what is transpiring out there...

First off, as regards to the possibility earlier this week that the PUB may use the interrupter formula, I'm not surprised that they never.

I'm more surprised that they didn't have the market volatility to show a more significant drop that would have allowed the formula to be used. In other words, that their numbers reflected more than four cents for the formula to kick in.

In the end, my numbers showed an exact 3.77 cents a litre downwards, just shy of the required four cents for interruption to occur.

Yes, it sucks to be out by that much but, that's the rule that is used.

An important point here to remember is that, while other jurisdictions see an almost immediate drop in prices relected in their respective markets because of the competative nature of their markets, our numbers are usually hit the pumps roughly a week later if they meet criteria for interruption. (We can only wish for competition here in Newfoundland and Labrador to be the final arbitor of the retail petroleum price!)

Conversely, whenever there is an increase in other respective markets, these increases are also immediate to their various areas and we then see any respective increases about a week after the event occurs. Here, we also take a two week (one week during interrupt scenarios) average of price movements before any alowable increase or decrease is passed on and that timeframe is also taken into account simply to allow any movements in pricing to "work itself out" as during the Katrina and Rita hurricane events of August and September 2005.

Other centers saw gouging to the point that some retailers in the Stratford, Ontario region charged upwards of $2.25 a litre for gasoline.

Halifax and the area there saw $1.89 a litre until word got out that the prices at the pump outweighed the spot prices of the day and we got onto them.

The fact is, is that we hit $1.48 a litre here in St. John's because we were regulated. Prices didn't change as much as the companies wanted them to fir the simple reason that the PUB waited an extra day to let the market work itself out, and it did.

I'm getting off-track here again...lol

Anyway, just to keep you all up to speed on what I have with nine days done and still five more days to go:

• Heating and stove oils are pointing down by 3.50 cents per litre.
• Diesel is down by 3.4 a litre and...
• Gasoline now shows down by 5.1 cents a litre.

My guess for the result after the full fourteen days are in?

• Heating and stove oils down by 4.5 cents a litre.
• Diesel down by 5.0 cents a litre and...
• Gasoline down by 6.5 cents a litre.

See how close they'll be after Tuesday night!

Anyone else care to take a shot at it?

Regards,

George

Oh well...No suprise that prices didn't drop

I'm irked...

Maybe I should just keep quiet every time I get a way of thinking and keep my thoughts to myself. No suprise that I'm a little disappointed though but in hopeful expectations for next weeks price setting nonetheless.

After Tuesday, I thought that the numbers would show those for interruption.

Didn't happen...

Numbers here showed a good start to a price drop but, for some reason, and I'm still looking into it, the drop showed a "stall" and the numbers averaged out to be 3.77 cents a litre down, just a mere 23/100ths away from the required four cents a litre for interruption to occur. Another day and things would have kicked in.

It was painful to watch the numbers come up on the calculator!

So, we have to wait for the regular price setting fornext week it seems because we know that the Ultramars, ESSO's, Irvings and North Atlantics aren't going to drop prices ahead of time on their own!

Use it sparingly for the next six days anyway. So far, with Wednesday data in, numbers are now showing close on a nickel down at the pumps. If oil continues to drop in the days leading up to the 14th, then the drop at the pumps could be significantly more.

Regards,

George

Is there enough volatility in the markets this week?

Those of you watching the markets this week are probably asking the same question this week, wondering if consumers here in the province will see a drop in fuel pricing: Is there enough volatility in the markets right now, to warrant a drop in prices?

This week shows a drop of almost seven bucks a barrel US with corresponding spot prices dropping by nearly five cents on a litre after yesterdays market close. While my average for the last pricing session was set at 58.05 cents a litre, that average has touched near three cents after yesterdays market activity. The average for the preceding six days I now have at 55.38 cents a litre, a difference of close to 2.7 cents a litre.

Interruption requires that four cents a litre, up or down, from the previous price setting, are needed for interruption to occur.

That being said, again today, we're looking at gasoline trading down by another two cents a US gallon and that number does not include any market volatility that my numbers do not record.

There is a possibility that gasoline prices may be adjusted downwards after Wednesday night as a result of that, market volatility.

Other fuels like heating oils, stove oils and diesels, are also down but are less than the 2.7 or so that I have for gasoline.

Trouble here is that I also have numbers for the first six days that also shows greater than 3.4 cents a litre down on gasoline, taxes not included.

With oil prices collapsing again in the face of weakening demand and bad economic news, it may be well advised to hold back on any purchases you might want to make in the next day or so, that is, until we see what the Public Utilities Board is going to do this coming Thursday.

Those in other jurisdictions might want to follow the same advice: drops in pricing are on the way!

I'll know more after tonight's numbers come in for Newfoundland and Labrador, so stay tuned!

It's going to be close!

Regards,

George

Drops coming you say?

Might be the first time some of you will be happy with me, at least for the next two weeks.

Sorry I'm posting late as I was working late last night.

Here's what I have, with all the data in. Nothing substantial but it all helps I guess:

• Diesel to drop by 3/10ths of a cent.
• Heating and stove oils to drop by 64/100ths of a cent, and...
• Gasoline to drop by 1.5 cents a litre.

No official release on this one this time. What you're looking at is coming for this Thursday morning.

Hope it works out!

Regards,

George

The following is a copy of a letter I sent off to the Prime Ministers office and the Minister of Transport for the Government of Canada on the Marine Atlantic fuel surcharge issue.

Let's see if we can get an answer!

Right Honourable Stephen Harper
Prime Minister
Government of Canada
Office of the Prime Minister
80 Wellington Street
Ottawa, Ontario
K1A 0A2

Dear Mr. Prime Minister

I am writing to you today to tell you of my concern as regards to Marine Atlantic’s possible application of a round of fuel surcharges on ferry rates and what the Government of Canada can possibly do about it.

During the sailing season of June, 2007 and again in 2008, Marine Atlantic was forced to institute a round of fuel surcharges that were applied to ferry rates and passenger fares to users of the service across the Gulf of St. Lawrence. This caused an undue hardship and an artificial inflation rate, especially to goods and services being used by Newfoundland and Labradoreans. Particularly hard hit was grocery items that were being transported across the Gulf by trucking companies who also recouped their added fuel surcharge expenses crossing the gulf by adding fuel surcharges onto their goods and services entering the province. In turn, these added costs were handed down to the consumer in the form of higher prices for commodities, adding more stress to consumers and businesses here.

While earlier this year (January) fuel surcharges were removed from Marine Atlantic ferry rates, prices for marine type fuels have been increasing from their near record low of last October. Prices for marine type fuels have increased since January when fuel surcharges were removed and have reached a point where Marine Atlantic will be making a decision on adding a fuel surcharge once again to Marine Atlantic ferry rates, again increasing pricing to the end user, the consumer of Newfoundland and Labrador. Today, according to my research, the price of residual fuel oils has surpassed the June, 2007 price by almost thirty per cent, making the possibility of added fuel surcharges almost imminent during the start of the auto tourist user season across the gulf. A decision by the Marine Atlantic board is due shortly on any fuel surcharge addition.


I am writing you to ask you to help Marine Atlantic absorb these costs by adding additional funding to the Marine Atlantic budget as a measure to help the Newfoundland and Labrador consumer avoid seeing an added, artificial inflation rate added to consumables as a result of added fuel costs.

This is possible for the Government of Canada to accomplish. The Government of Canada recently announced a 10.7 billion dollar investment in the automotive industry to help the Ontario economy and other areas affected by the downturn. It would be my estimate that, in order to maintain the level of consumer spending and help support the tourism industry here in Newfoundland and Labrador, the Government of Canada could make the strategic investment into Marine Atlantic’s fuel budget to ensure consumables and visitors to this province do not get hit with added fuel surcharges.

I’m hoping that your office and the Government of Canada can turn some of its attention to this issue and I await your reply to my query.

My regards,

George Murphy
Group researcher/member
Consumer Group for Fair Gas Prices

Final update (#3)

Oil markets still in drive mode
All fuels show increases on the way

Media release

Conception Bay South, NL, June 16, 2009- Oil prices are rising and so are the costs to the consumer with all fuel prices set to increase later this week, at least that’s according to George Murphy’s data.

Final numbers in
“Stronger numbers are in today that show all fuel users in Newfoundland and Labrador will experience increases in consumer prices this coming Thursday morning. With all data now in, consumers will see an added 2.01 cents per litre on heating and stove oil pricing, an added 2.8 cents a litre on diesel prices and a huge 6.6 cent a litre hike in gasoline pricing,” said Murphy

“In spite of inflation fears, investors are still betting on increased demand of fuel products. That, and a failing US dollar have also helped in supporting pricing to consumers that will be very noticeable later this Thursday morning with anticipated increases on the way.

Watch out for the gas and go
“With the increase in pump prices about to hit, consumers should be aware of the person next to them fueling up who may attempt the “gas and go”, a common type of theft whenever there is a run-up in pricing. As in other years, consumers have to be aware of the fact that this is a type of theft that gets passed down to the consumer in added costs to service stations. We can help avoid this problem by being aware of who you are filling up next to and making note of who the person is and what kind of car they are driving, getting the necessary data for . The last thing we need to see as consumers is the cost of theft being passed down to the consumer.”

-30-

For more information, contact;

George Murphy
Consumer Group for Fair Gas Prices

Update #2

All numbers are up...

One more day of numbers to get and here's what I have...

• Heating and stove oils up by 1.92 a litre.
• Diesel up by 2.7 cents per litre, and...
• Gasoline up by 6.3 cents a litre.

Yes...

Going to be a line-up at the pumps again Wednesday night...

I'll be back in here sometime after eight tomorrow night with the final but don't expect to see much change...

Regards,

George

Update #1

Just wait for later this week!

If you think we just might get the rout at the pumps later on this week when the PUB sets prices again, you'd be right.

With oil prices increasing and with no signs of abatement, it's looking more positive that we're going to take quite the jolt when they are set Thursday morning. To put it mildly, when we skipped out on interruption to pricing, we just missed getting a four cent a litre hit at the pumps.

Since then, oil and all it's related refined commodities, have also increased in value.

Here's what I have for this coming Thursday, keeping in mind that I have to get two more business days of data before I call the final shot on Thursday;

• Heating and stove oil prices to increase by 1.85 cents per litre.
• Diesel prices increase by 2.6 cents a litre, and...
• Gasoline to increase by 6.1 cents a litre, so far.

Yup...

Hurts...

Talk about hijacking economic recovery...

Regards,

George

Will prices spike this week?
Numbers show interruption a possibility

Media release

Conception Bay South, NL, June 10, 2009- The rise in oil prices this last week may leave a very sour taste in the mouth of consumers, that’s according to George Murphy, group researcher with the Consumer Group for Fair Gas Prices.

“I’m seeing a steady rise in the price of oil and its related commodities and that doesn’t bode well for consumers. While some numbers are close to my margin for error, I’m putting out a recommendation that we all err on the side of caution this time out because of the volatility of the markets these past few weeks. I’d much rather I was wrong more so than right sometimes,” said Murphy.

What consumers can expect this Thursday
“Numbers show large increases on the way. Heating and stove oils are expected to increase by 4.37 cents a litre, diesel by 4.7 cents a litre and gasoline by another 4.9 cents a litre. My actual on gas before the addition of taxes shows a 4.17 cent a litre increase, so that’s why the call of ‘erring on the side of caution’ in this case. The margin for error would bring it below the 4.17 cent a litre margin and hence, no increase this week. The possibility of an increase however, is much more likely than not.”

-30-

For more information, contact;

George Murphy
Group researcher/Member
Consumer Group for Fair Gas Prices

Update #2

Prices slightly up for this week
Increase in prices renews concerns over added fuel surcharges

Media release


Conception Bay South, NL, June 02, 2009- Most fuel prices will probably increase on Thursday but that’s not the big worry. The creep up in all fuel product prices is renewing concerns that some companies may be forced to consider the likelihood of adding fuel surcharges to account for the latest increases in prices.

Marine Atlantic costs to go up?
George Murphy, group researcher for the Consumer Group for Fair Gas prices says that businesses operating within the province should be concerned that there is a possibility that some costs will be increased because of the extra costs for fuel in recent weeks, leading to the possibility of added fuel surcharges again.

“We’re keeping an eye to Marine Atlantic who will be making the decision on added fuel surcharges later this month. The first time they did that back in 2007; prices for most marine type fuels were averaging close to 35 cents a litre when a fuel surcharge of two per cent was applied to passenger fares. As of the first of June, 2009 those numbers exceed that of 2007 by almost 2.5 cents a litre, creeping upwards in recent weeks and showing no signs of abatement. The province should immediately be concerned about any addition to prices crossing the Gulf and should be taking steps to ensure these costs are not going to be passed down to the consumer or to businesses in the province. We also have a very important tourism season to protect,” said Murphy.

“Our federal representatives should press the government in Ottawa to help the Department of Transport and the minister responsible, John Baird, absorb these added costs to Marine Atlantic. If they can step in to the automotive industry with financial assistance, they can help Marine Atlantic absorb the additional costs of marine fuels. We’re seeing the numbers increase and we still have time to deal with anything that is forth-coming provided the federal government is receptive to protecting the province from added increases to rates.”

On the consumer front
“Consumers in Newfoundland and Labrador can expect to see an added 1.77 cents a litre to heating and stove oils, an added one cent a litre to gasoline prices and 1.9 cents a litre on diesel fuels as a result of this past two weeks market activity. Even though numbers show inventories of crude oil almost 50 million barrels more than the average, prices continue to climb as a result of positive economic news. They may be positive for the provincial treasury but, it’s not so positive for the consumer when we see the removal of disposable income from the consumer’s pocket.”

-30-

For more information, contact;

George Murphy
Group researcher/Member

Update #1

Price increases coming

I'll be posting more on this tomorrow night when all the data is in, but for now, it ooks like price increases are coming.

Here's what I have so far, thirteen days out of fourteen available days data:

• Heating/stove oils up by 1.48 a litre.
• Diesel up by 1.6 a litre, and...
• Gasoline shows up by close on a penny.

A few notes for this period:

• Canadian dollar has gained by six cents against its US counterpart.
• Refiner capacity has increased to 85 per cent from last week's 83.7 per cent.
• Consumer demand for distillates measured down by 9 per cent from last year.
• Jet fuel demand down by slightly better than nine also.
• Demand for gasoline is 4/10ths of a per cent below last years levels.
• Crude stocks are almost 50 millionbarrels more than last year for the same timeframe.

More tomorrow like I say...

Regards,

George

OPEC ideas with oil prices might change your mind

If the Saudi Arabian oil minister is right, and OPEC succeeds in jacking up oil prices well above the July, 2008 record of $147 US a barrel, what would you think?

Good for the Newfoundland and Labrador treasury?

Good for the environment?

Just the other day, a CBC news story quoted Ali al-Naimi as saying that oil prices could surpass the record by the year 2012. In a nutshell, a boon for the OPEC nations that comes with much trepidation and concern for the consumers in North America and indeed, worldwide.

Consider this...

As oil prices hit the record of $147.23 a US barrel last July 7th, consumers were also facing the elevated price of heating oils that hit close on $1.24 a litre. The record heating oil price came close to killing the local heating oil industry here, leading to some radical changes in the ownership of the local dealers. Some retailers sold out leaving the industry here dominated by big oil rather than being influenced by the mom and pop operation.

If OPEC succeeds in driving prices in excess of the old record, will OPEC also succeed in killing the heating oil industry? Will we see an enforced conservation because people simply will not be able to afford to buy heating oils?

What of the affect on gasoline or diesel prices?

No doubt that pricing for refined commodities would hit the roof. The fact that OPEC is even of this way of thinking is both alarming, and a foreboding of the possibility of things to come if you're a heating oil user.

I don't think there's any consolation in OPEC's way of thinking and the provincial treasury simply would not be able to keep up even though the treasury would like the influx of cash. The reality is that OPEC is stepping on insecure ground and it's actions like driving up the price of oil could do more to impact demand by the consumer.

They could end up sshooting themselves in the foot...

But really...Isn't it time that Canadians insulate themselves from OPEC?

Your thoughts?

No change in pricing this week

Just a short note...

No change in pricing for any fuels I cover, at least for this week.

Here's what I have so far, for this pricing period;

• Heating/stove oils up by 53/100ths of a cent.
• Diesel up by 6/10ths, and...
• Gasoline up by close on 4/10ths of a cent.

Hopefully, we'll see a drop next week or, at least see prices steady.

Regards,

George