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Wednesday, March 10, 2010

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.”

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For more information, contact;

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

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