Not much change in prices this week
The real oil news may be later this week
Conception Bay South, NL, February 9, 2010- There won’t be any big changes to fuel prices this week as oil and commodity prices showed a slight gain, erasing any possibility of a more substantial cut in prices. That’s according to George Murphy, group researcher for the Consumer Group for Fair Gas Prices.
Numbers are down slightly
“Numbers are showing drops in all fuels I measure but I only have it in tenths of cents. Heating and stove oils show 29/100ths down, gasoline is 3/10ths down and diesel shows the largest decrease at just a half penny,” Murphy said.
“While crude supplies increased slightly last week that was offset by an increase in investors sinking their money into the US dollar as a hedge against inflation. They pulled their winnings from commodities amidst a drop in demand for oil. The Canadian dollar also lost a penny in value against the US dollar as a result. The real news for consumers may be signaled later today when the US government releases its inventory data. If it also shows an increase, oil will drop along with the price of refined commodities and there are plenty of signs out there that it will.”
Iran has several tankers loaded and ready to go to world markets, but they have a problem. The tankers have no place to deliver as the markets are now signaling a drop in demand for oil and rather than ship the oil out for a cheaper price, the Iranians are using the tankers for storage in the hope that prices will rebound before the next OPEC meeting.
OPEC meets March 17th in Vienna
The Organization for Petroleum Exporting Countries (OPEC) will meet in Vienna next month to discuss production targets. The possibility is there that OPEC will discuss a cut in production if oil prices keep slipping amidst the bad news coming from the world economy. Any drop in the world economy will signal a drop in demand for oil and that brings about the possibility of a production cut to help support prices.
Industry report indicates inventories gain
The American Petroleum Institute (API) is reporting a gain in inventories of most crude oil and refined products this week. The industry organization’s report shows that supplies of crude oil increased by a very substantial 7.2 million barrels and gasoline also increased by 1.6 million.
“Hopefully, the positive news here will mean a drop in the coming weeks for consumers but, the news still has to face some confirmation in a report by the US Energy Information Administration (EIA) report scheduled to be released tomorrow. If their report shows anything of an increase in supply, then we should look for oil to trade lower again in the next week,” Murphy said.
For more information, contact;
Consumer Group for Fair Gas Prices