Wednesday, April 28, 2010
Tuesday, April 27, 2010
Markets could be on the verge of another collapse
Conception Bay South, NL, April 27, 2010- Consumers in Newfoundland and Labrador will see some slight upwards movement in prices this week when the Public Utilities Board adjusts prices this coming Thursday. That’s according to George Murphy, group researcher for the Consumer Group for Fair Gas Prices.
“Numbers are up slightly this week, all due to the three dollar a barrel increase in crude prices, that is, up until yesterday’s sudden drop. Numbers show that heating and stove oils could increase by 6/10ths of a cent, gasoline should increase by 1.8 cents a litre and diesel, also up by 7/10ths of a cent a litre,” Murphy said.
Europe faces tough financial crisis
“If there is good news in the markets against prices increasing further, you need not look further than the ongoing fiscal situation developing in Europe with Greece’s fiscal problems. Portugal and Spain are also dealing with a high debt-load and are both being forced to take some tough austerity measures to help support their end of the Euro. In the meantime, both Greece (BB+ from a BBB+ rating) and Portugal (A- from A+ rating) have both had their country’s credit ratings reduced and that led to a drop in the Euro against the US dollar. The Canadian dollar also lost ground against the US greenback. Equities also took a pounding yesterday and that spells trouble as the European Union tries to manage its members debt-loads.
“These tough financial times in Europe and Portugal have presented the people there with the possibility of hard times to come and the markets see that as a future sign of dropping demand for petroleum products as consumers cut back. Those problems, along with rising interest rates and increasing worldwide crude oil inventories, spell further trouble for crude oil in the weeks to come. The austerity measures these countries will have to take will, no doubt, be harsh on consumers there.”
• According to an industry petroleum report, inventories of crude oil probably increased by as much as 5.3 million barrels, extending increases for the last few weeks. The US Energy Information Administration releases its report Wednesday. If that also shows an increase, look for the slide to continue.
Iran using more tankers for storage (Bloomberg)
• “In a further sign of crude oil troubles, Iran added three more super-tankers to the fleet now being used for storage purposes. The number of tankers now being used now matches the same number they used when crude oil prices collapsed in 2008. Iran now has sixteen tankers used for storage out of a fleet of twenty eight, each being rented for that purpose at a cost of close to $47,000.00 US per day.”
IEA says $85 US oil will damage recovery efforts. (Edmonton Journal)
• “It’s something I have always said all along, that high prices for oil will hurt the consumer and hinder any economic recovery, but now we’re hearing it from the International Energy Agency. Now, the IEA says that anything upwards of $70 US to $85 US will hinder, if not harm, any ongoing economic recovery efforts. While the royalty numbers might look good on the provinces treasury, consumers are beginning to hurt. High prices for oil also bring with it the specter of the possibility of surcharges again and we're also dealing with artificially high inflation to prices caused by increased transportation costs.”
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Wednesday, April 21, 2010
Will an Icelandic volcano engineer a price collapse?
“All the numbers are down, but by tenths of a cent in all cases. I expect a drop of two tenths to heating and stove oils, down by four tenths to gasoline and a drop of a half cent to diesel prices,” Murphy said.
Distillate prices to collapse
Consumers could see the beneficial effect of a volcano in the markets, but the oil company Vitol, according to a Bloomberg news story, is trying to prevent a break to consumers at the same time. The longer the volcano spews ash and cancels flights, the more likely a collapse in prices. However, while jet fuel inventories have increased because of cancelled flights in the volcano cloud regions of Europe, Vitol is attempting to store its jet fuel in a tanker until jet fuel demand increases, and when the cloud of volcanic dust dissipates.
“The last time we saw a drop in demand of jet fuel was immediately after the attacks of 9-11 and that saw a drop in consumer demand for jet fuel and other distillates that brought down prices to consumers. Back then, refined product was still flowing freely in the markets. This time, things are different with Vitol artificially removing jet fuel from the markets just to manipulate the price and prevent its collapse. Jet fuel is also an important winter fuel for the winter heating blend in Newfoundland and Labrador, as well as other cold climates. What we have here is a company willingly manipulating the market conditions to help support the price simply by leaving this product in storage.
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Tuesday, April 13, 2010
- Heating and stove oils show a drop of 37/100ths of a cent.
- Diesel shows down by 7/10ths of a cent, and...
- Gasoline shows a drop of 9/10ths coming.
Sorry I don't have a lot of news from this side of things. It's been a busy week on this end with other issues popping up and a lot of work besides!
I am also still trying to find sources other than my own pertaining to last week's price change that might show why I was so "off" with the change at the gas pumps. I had upwards movement, but not as substantial as that of the PUB. When I find that info, I'll try to get it to you.
The rest of the numbers came close to perfect, however.
I also have been inundated with emails from the readers out there about the changes to consumer product weights and the prices being charged. I'll have a little more on that topic later the week as I have a little more research to be done. It has become plainly obvious however, that consumers are being hurt by the business practice of "product downsizing".
I'll be back again with more oil news next time, I promise!
Monday, April 12, 2010
Did you notice?
Out on my rounds this weekend when yours truly decided to stop into one of my favorite corner stores for a plain, ordinary bag of chips and I thought it passing as strange that the bag I bought looked a little smaller than usual.
Hostess chips and Humpty Dumpty cheezies dropped the last couple of weeks from 85 gram bag sizes to 65 grams. The price of the product stayed the same.$1.29 a bag.
Kit Kat bars are five grams less and still sell for the same price.
Not important to you maybe, but how about this one? Did you notice that some loaves of bread out there on the shelves are smaller? Apparently, Weston's breads downsized their loaves by three or four slices.
In the mood for ice cream?
Brookfield Ice Creams have dropped in size from a two litre to a 1.65 litre size but still maintained their same price.
Inflation comes in many forms. How many people are going hungry as a result of changes in weights to healthy foods?
Next thing you'll hear about is Big Oil adjusting temperature compensation because of global warning!
In the meantime, I'll have an update on where fuel prices are so far this session just as soon as I have tonights figures.
Tuesday, April 06, 2010
Consumers to see increases to all fuels
Conception Bay South, NL, April 06, 2010- Consumers in Newfoundland and Labrador will see a substantial increase, the first in weeks, when the fuel regulator sets prices this coming Thursday morning, that’s according to George Murphy, group researcher for the Consumer Group for Fair Gas Prices.
What’s in the numbers?
“After the latest run-up in crude oil and refined product prices, we will see an increase to all fuel prices I measure. Heating and stove oils show an increase of 2.54 cents a litre on the way, while diesel shows an added 3.1 cents per litre. Gasoline prices will also take a hit, increasing there by 2.2 cents a litre,” said Murphy.
“The recent rise in the Canadian dollar has insulated us somewhat from this price setting round. If we had been dealing with last years Canuck Buck, we could be talking about an added 11 cents per litre on gasoline. US consumers are looking at a fourteen cent a gallon increase as it stands now for the last week’s performance in the markets.
“Some of this data is starting to suggest future trouble for some consumers. We’re looking at an increase in distillate prices that means an elevated price for heating and stove oil product when, traditionally; prices have been declining at this time of year. Will we see the possibility of fuel surcharges coming to play into consumers pocketbooks through increased airline fuel surcharges and another possible adjustment to Marine Atlantic ferry rates as a result of the meteoric rise in crude oil and refined product prices? While the numbers to substantiate any increase may not be there now, there is a guarantee of increases in fuel surcharges to consumers as the rising cost of crude becomes a factor. Consumers may see some relief in the coming weeks if petroleum pricing becomes a pocketbook issue but right now, the market has momentum that seems to suggest a July, 2008 repeat. The collapse of oil prices could be close at hand again.”
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Monday, April 05, 2010
Six days out of seven reporting are showing a jump in fuel prices to come this Thursday. They will be up over what I'm showing here, if all holds well in the oil markets tomorrow as well...
If they are, you can be sure that all these numbers could go up at least another half cent from what I'm showing.
Here's a run-down on what I have so far this regulation period:
- Heating and stove oils show an added 2.45 cents a litre.
- Diesel shows an added 3.1 cents, and...
- Gasoline is up by two cents a litre.
from last weeks upwards climb of three bucks a barrel, I guess it could be worse. The Canadian dollar is becoming an important factor in insulating consumers here in getting tagged with added increases. If this were the same time-frame from last year, it very well could be that, just for gas prices alone, we could be dealing with an added 11 cents a litre upwards.
That would have been a shocker on that fact alone. US consumers are looking at an added fourteen cents a litre at the pumps over this last week!
In the meantime, days are limited for oil to keep climbing. At least that's my opinion on the situation. Just how long can oil go up before high refined prices start to affect consumer spending?
My belief is "Not long".
I'll have an official release on all seven days activity late tomorrow night but keep your ears to the ground for talk from the consumer perspective, on how high prices are beginning to affect their spending. That's when the large oil sell-off could begin.
More tomorrow night, as I've said...
Regards for now,