Minor adjustments to pricing this Thursday
And more budget thoughts

Media release

Conception Bay South, NL, March 30, 2010- Consumers in Newfoundland and Labrador will again see some slight changes to fuel pricing this Thursday when the PUB adjusts prices based on the market’s last week of activity. That’s from George Murphy, researcher for the group.

What to expect with prices
“I expect heating and stove oils to increase by 28/100ths of a cent, diesel to decrease by two tenths and gasoline to decrease by 8/10ths of a cent. All this comes with oil increasing to $82 US a barrel. The last time we saw this amount for a barrel of crude was back on October 12, 2008 when oil dropped to $81.19 US a barrel, just shortly after the July slide. Oil climbed to a record of $147.23 on July 7th of that year. The big difference was that the Canadian dollar was measured at $1.19 against the US greenback. Consumers have saved about four cents a litre simply on the dollar difference.

State of flux
“Again this week, the markets are in a state of flux as they seem to be waiting for something substantial to happen. In spite of the positive economic news coming from the US, it’s like they’re waiting for something to build on before any other investment in the markets occurs. I believe that they’re fearful of a deepening financial crisis coming from Europe, in spite of some success met by Greece this past week in securing finances,” Murphy said.

“A huge build in crude oil inventories is another reason why the markets are taking a ‘wait and see’ approach to crude oil prices. A strong sign of waning demand for raw crude product is playing heavily into the markets. Another substantial build in inventories of raw product this week may be enough to send investors for cover in the interim until extra supplies are used up. That may very well take some time as production and rig counts have increased in recent weeks. The industry seems to be gearing itself up for another fall if the counts go up hand in hand with inventory building. Add to this the fact that refinery capacity also picked up for the last two weeks now and we have something troubling to the investor. All will hinge on an increase in consumer demand.

Provincial budget
“While it was a good budget, the province could have instituted a different tax cut that would have covered all individuals. Instead of the cut they gave to middle and upper class residents, they had the chance to offer some taxation relief to consumers and business in the form of tax cuts to all forms of heat and some relief to consumers from transportation taxes. The transportation sector would have welcomed the gas tax relief and it would have aided the export industries here that are fighting the uphill battle of a high Canadian dollar.
The relief from taxation levels on heat would have been all-encompassing and would have depended on your usage. Everyone would have been included in this measure and you would have saved in concert with your consumption. A complete removal of the provincial portion of the HST would also have taken government out of the consumers pocket and put disposable income back into the hands of the people that needed it most.”

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For more information, contact;

George Murphy
Group researcher/Member

Numbers so far...

And a little on the budget...

Here's what I have so far for this pricing session, and also a little on what I think about the budget; not that my opinion will change it!...

Six days out of seven at hand and here is what I have:

• Heating and stove oils show an added 14/100ths of a cent.


• Diesel shows 3/10ths down, and...


• Gasoline shows 9/10ths down.

I'll have the final numbers tomorrow night, so be looking for that post late in the evening...

Budget reaction

Overall, it's not a bad budget considering the investment of two badly needed schools in the St. John's area and the investment into six new ferries for the south coast of the province, but this round of tax cuts bothers me along with the government projection of an average of $83 bucks a barrel for crude oil.

Here's why...

So far this year, we have been warned about increasing interest rates and some areas of the world still facing an impending financial crunch, both of which will impact consumer spending. Look at the situation with Greece and impending problems with the Euro. The Bank of Canada has already set the Canadian ball rolling on higher interest rates increasing rates by 6 basis points.

Doesn't seem a lot but the warnings are already out there that they'll go nowhere but up from now on. This means that consumers are going to prioritise their spending with increasing interest rates on things like new homes and credit card expenditures, there's going to be a shortfall for some people out there. If they don't spend, the high price of fuel will "enforce" conservation and that will make the price of oil drop.

High prices impacted consumer spending that partially lead to crude oil's price collapse in July, 2008. With a government so heavily dependent on oil revenues, that should be worrisome.

For some reason, I don't think the word "risk" was brought out by anyone. I guess it is now.

Regards,

George

Just a short note:
Don't forget that my margin for error with the numbers is close to three tenths of a cent. With the numbers you see here in the release in this case, there may be no price changes to the fuels I measure when you take that into account!

It’s like the markets are waiting for something
Fuel prices show very little change

Media release

Conception Bay South, NL, March 23, 2010- For the fourth week in a row, consumers can expect to see very little price movement at the pumps this Thursday when the Public Utilities Board adjusts prices. That’s according to George Murphy, group researcher with the Consumer Group for Fair Gas Prices.

‘Numbers are showing no great changes for this pricing session. I expect heating and stove oils to decrease by 33/100ths of a cent, gasoline to drop by close on 2/10ths and diesel to increase by 2/10ths of a cent respectively. It’s almost like the markets have been waiting for more substantial news before investors withdraw or invest in the markets. It’s odd,” Murphy said.

“For weeks, the markets have been watching demand stall and crude oil inventories show insignificant builds, while refined commodities have been unsettled as well. One week we find a build in gasoline inventories and the next, a draw-down. The same goes for other fuels I measure. It seems like winter heating oil prices showed the same trend although they did come close to my predicted peak of 82 cents by February, they also stalled, reaching 78.67 cents a litre this past week. While diesel prices are elevated, again they also stalled for the past few weeks.

“Near as I can figure, the economic recovery remains spotty in some markets and there are countries out there that are predicted that will be facing the burden of taxing their consumers to deal with an increasing debt load. Greece is a prime example of what the markets are seeing as a few quirks with the worldwide economic recovery. Match that with weak demand for petroleum products and we have a “wait and see” approach apparent in the markets. While things are status quo for now, the question needs to be asked “just for how long before the bulls enter the markets again?”

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For more information, contact;

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

Oil holds steady and so will pricing

Not a lot of changes to be expected again this week as oil prices show "steady as she goes" for the time being.

Seems that the markets have taken a wait and see approach to what's happening in far centers before prices again start to climb.

The big news seems to center on how some European countries will be dealing with debt and policies that they will institute before we see any other long term effects to pricing. What they do to consumers in their own countries has played a big part in the stall of oil prices as consumers stand to be hit by any increases in taxation levels in countries like Greece and Italy. Until they deal that blow, it seems that oil will hover right where it's to right now, barring any unforeseen obstacles like OPEC cuts.

To that end, here's what I have so far for this pricing session:

• Heating and stove oils show a decline of 39/100ths of a cent.
• Diesel shows an added 2/10ths, and...
• Gasoline shows a drop of 2/10ths of a cent.

Like I said. Nothing disconcerting.

I'll be back tomorrow night with a final run-down on the changes we can expect this Thursday.

Til then!

George

Numbers still pointing down

Hi to all...

Not much change from yesterday's projections I had listed on the blog so, again I won't bother you all with an official news release, just this little emailer!

What you'll see this Thursday morning

All fuels still show a drop coming. Not by much again but they are down.
**Heating and stove oils to drop by 24/100ths of a cent.
**Diesel to drop by a half cent, and...
**Gasoline to drop by 8/10ths.

Some market highlights:

*** The Canadian dollar continues to make gains against the faltering US dollar, reaching $1.0148 at Tuesday noon.
***Some building of crude oil inventories last week an indicator of weak demand.
***The Euro gained ground against the US dollar also this week and that renewed the appeal of commodities like crude oil and it's related, refined products. In spite of that, oil bounced around $82.00 US all this week, with the exception of the March 15th sell-off down to $79.00 US a barrel.
***News from Vienna, Austria indicates that OPEC will keep production figures steady in the interim, unless consumption again falls off, all in spite the latest news that indicates weak demand for oil products. keep an ear to the ground on OPEC as they have been known to change their minds on a moments notice. The news from Vienna later today could be different than what's coming from there right now!

Local heating oil prices remain fluid

Here's a breakdown of heating oil prices in the immediate St. John's area:

Harvey's Oil........78.67/Lt
Irving Oil Ltd.......76.67/Lt
North Atlantic.....76.67/Lt
Ultramar.............76.67/Lt
Chafe's Oil..........76.67/Lt
Esso (Imperial)....76.67/Lt
Skinner's Oil........70.67/Lt
A1 Fuels.............70.00/Lt
Discount Fuels....69.95/Lt

Price difference.....8.72 cents per litre ($89.00 HST included and based on a 900 litre fill-up)

Shopping around for heating oil could prove profitable!

That's it for this week!

Regards,

George Murphy

Down, but not by much

As the headline says, the numbers this week are showing down, but just by a little so far this pricing session.

Here's what I have so far, six days out of seven reporting:

• Heating and stove oils show a drop of 24/100ths of a cent.
• Diesel shows a half cent drop, and...
• Gasoline shows 8/10ths of a cent down.

Some highlights:

• The Canadian dollar continues to gain against the US greenback, gaining almost three cents to reach today's $1.0217 in close parity.
• Crude inventories continue to build against what is already stocked south of the border, just another indicator that demand for oil products remains weak.

I'll be back with the final numbers late tomorrow night along with a comparison of local heating oil prices for the immediate St. John's area, so, be in touch to read that!

Regards,

George

Hi to all...

Sorry that this one is posted later than the usual, but I didn't get in until late tonight, a little later than the usual. I hope you all forgive me.

George

Prices on a steady move upwards
Consumers to see another slight increase to prices

Media release

Conception Bay South, NL, March 10, 2010- some more slight upwards moves in petroleum prices will be the order of the week to consumers again when the PUB adjusts prices this coming Thursday. That’s according to George Murphy of the Consumer Group for Fair Gas Prices.

“Again, investors are beginning to speculate on economic recovery, albeit in sporadic fashion, as they try to maximize returns for the future. I expect to see consumers paying slightly more when prices are adjusted upwards this week as a result,” Murphy said.

“Numbers show only a 49/100ths of an increase coming for heating and stove oil prices, and an increase of another penny to both gasoline and diesel fuel prices. It may be another small increase but the last few increases add up to a larger number that is beginning to make an impact on consumers spending. Any increase that becomes measurable like these last few have totaled will shortly begin to impact demand as consumers sense that prices are not staying down. They’ll begin to hold back on other purchases, making an impact on any economic recovery. There are already signs that this is occurring.

Industry report shows increasing crude oil inventory
A report today from the American Petroleum Institute (API) shows that the US crude oil inventories probably increased by close on 6.5 million barrels. The report comes ahead of the US government Energy Information Administration (EIA) report that is expected to show an additional two million barrels of inventory for last week. “If that is the case, then we can expect to see lower trading in commodities and a corresponding drop in prices in the coming week. We should also see traders making investments in the US dollar rather than the Euro and commodities. It all depends also on the inventory status of refined commodities rather than raw crude,” Murphy said.

Beware the Ides of March
OPEC meets in Vienna next week to discuss its pricing policies and also to discuss production from its member nations. With any sign of a drop in consumer demand, the possibility is there that there could be a production cut in the offing. We’ll find out March 17th if this will be the case. The last thing OPEC will want is to institute a cut though, as it could hinder any economic recovery perceived to be ongoing.

Marine Atlantic receives a budget tidbit-A suggestion
Marine Atlantic received an infusion of funds with the O’Flaherty budget this past week, bringing with it the promise of an update to the service fleet, but is there a possibility that any of the money could be used for another purpose?

“I’m hoping that Marine Atlantic could take some of that money and help itself, and consumers too, by infusing some of that money to alleviate the pain of added fuel surcharges to ferry traffic. If they lowered prices by doing this, perhaps they would increase user traffic as a result and then positively affect their own bottom line. One of the problems that added fuel surcharges has is that it adds an artificial inflation rate to anything coming into the province, or leaving it. Newfoundland and Labrador businesses need the stability in transportation prices that can be achieved by doing this. Besides being seen as a possible economic recovery measure, is it possible that we could increase tourist traffic by lowering ferry rates as a result of making a move like this? I believe it would.”

-30-

For more information, contact;

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

No big changes in the numbers this week

Hi to all...

I won't bother you all with working on a press release for this one.

No big changes this week.

Numbers show a drop in heating and stove oils by 27/100ths of a cent, gasoline to increase by just a penny and diesel prices to remain the same.

Of note in the markets this week:

*The Canadian dollar has gained almost 2.24 cents against the US greenback.
*Last inventory report from the US Energy Information Administration showed an increase in crude oil inventories of 3 million barrels. The same report also showed a drawdown in gasoline and distillate inventories, possibly an indicator of increasing demand. Gasoline consumption is close to 3/10ths of a percentage point below last year.
*Refinery capacity also increased this past week, reaching 81.2% of operable capacity.
*Total of the product supplied against last years numbers shows a drop in imports into the US markets, possibly another indicator of the industry trying to stymie any increase in an already excess inventory. That move is also helping to support prices.

That's it for now!

Don't forget to scroll back and have a look at the local heating oil prices. You'll find quite a difference!

Regards for now,

George

Latest price check show intense competition in the region

Before I do anything, here's what I have so far this week with five days data out of a possible seven days:

• Heating and stove oils show a very modest 14/100ths of a cent decline.
• Diesel shows "no change" and...
• Gasoline shows an added 1.4 cents a litre.

I'll keep you updated with another release and blog posting late tomorrow night on what to expect for Thursday.

Now, here's what I have for this weeks price check of heating oils in the St. John's region. I have added a few observations from the calling around that I done this morning with a few odd things showing up.

Make note of the "notations" at the end:

Company......................Cents/Litre

Harvey's Oil.......................................78.05*

Irving Oil...........................................76.05**

ESSO (Imperial)...............................76.05*

North Atlantic...................................76.05

Ultramar Ltd....................................76.05

Chafe's Oil.........................................76.05

Discount Fuels..................................70.40

A-1 Fuels...........................................70.00

Skinner's Oil......................................71.76

Price difference.......................8.5 cents/Lt or $76.50 + HST

That means a difference of $86.75 based on a 900/Lt fill-up!

Of note!

*To get prices from Harvey's, they asked for a lot of information as regards to my street addy and such which was a little troublesome considering all I wanted to know was the current price, but here's where it got a little too strange. I was given two prices, one of which I was told was if I was a current Harvey's Oil customer. That price was 78.05/Lt cents a litre.

If I wasn't a Harvey's customer, then my price was 70.05/Lt cents a litre just to switch over to Harvey's. Now, pardon me for saying this, but if I were a Harvey's customer, how come I'm not getting the 70.05/Lt price anyway?

**Both Irving and ESSO (Imperial) had phone center operators answering calls from New Brunswick. If I'm going to buy here in Newfoundland and Labrador, it might be a good idea to check where their main centers of operation are located in order to keep workers here in the province. On the same note, these companies may be well advised that if they're going to be operating here in the province, why don't you have more office staff here in the first place?

That's it for this entry. If you have any information that you might want to pass along that might be pertinent to the readers out there, why not drop me a note?

Regards,

George