Wednesday, August 26, 2009
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.”
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Friday, August 14, 2009
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.
Tuesday, August 11, 2009
Gasoline, diesel, heating and stove oils to increase
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.”
For more information, contact;
Consumer Group for Fair Gas Prices
Monday, August 10, 2009
- 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.
Time to hit the pumps again!