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Wednesday, May 12, 2010

Break for consumers on the way
European Union money problems result in lower prices
Media release

Conception Bay South, NL, May 11, 2010- The European Union is having financial problems and it looks like consumers in Newfoundland and Labrador are going to benefit from that when the PUB adjusts prices this coming Thursday. That news comes from George Murphy, group researcher with the Consumer Group for Fair Gas Prices.

What the numbers say
“Numbers show a strong downwards direction based on the data I compile on a weekly basis. Consumers will be looking at 3.36 cents a litre down on heating and stove oils, 3.5 cents a litre off diesel prices and a good drop of 4.5 cents a litre down on gasoline this coming Thursday morning.” Murphy said.

The big reason why prices will drop this Thursday
“Big money troubles in some of the European Union nations, particularly Greece, Spain Portugal and Italy, has resulted in a heavy investment in US dollars and that drove oil prices down in a hurry. In spite of the European Union’s support of a loan program that amounts to 750 million Euros, oil still did not show strong growth as a result. Investors remain cagey about the scope of debt and they’re doubtful that the aid package is sufficient to bring relief to the problem nations. All the data and the financial news seems to indicate lower oil prices will remain for some time in the face of doubts about any European economic recovery in the short term. Some Euro nations are going to be forced to take some very tough austerity measures to get out of debt and the citizens of those countries are the ones that are going to have to pay. That means cuts to consumers spending are on the way. Petroleum products are, in general, the first consumer commodity to take the hit. I don’t think we’ve seen the bottoming out of oil prices yet.

Inventories keep building
“This is supposed to be the big lead-up to the traditional start of the summer driving season and the numbers are just not there to say that prices will go up anytime soon. There has been a strong build in all refined product inventories, enough to say that demand remains flat in spite of the demand numbers being up just slightly from last year. Refiner capacity is also up again and that means refiners are meeting consumer needs right now. If Big Oil wants increased prices, they have a problem. They will have to reign in on production and that means the possibility of hindering any economic recovery.”

Louisiana spill could be big for green programming
“If drilling in deep water is becoming a concern, it may very well prove to be beneficial to green energy advocates and green technologies. The simple fact of the dangers that result in oil spills in deep waters have become readily apparent in the past few days, particularly in light of the loss of the rig off the coast of Louisiana and eleven souls aboard. So far, the leaching has not stopped and upwards on 4 million gallons of oil have spilled into the Gulf of Mexico resulting in the loss of income of hundreds of people dependent upon the other ocean resources, like shrimp. It has also cost British Petroleum (BP) close to $350 million in resulting expenses so far, and much more in legal settlements when it is all over. There is good cause for governments everywhere to develop green programs to help thwart offshore drilling of there is that much of a danger. Indeed, Big Oil is now forced to look at its own security measures as well as its own investments in offshore drilling, not only because of expediency but to attract more investment in programs that are deemed to be safe to carry out. BP probably learned this lesson when its own share price tanked this week Barack Obama has already placed a moratorium on new exploration licenses to explore the safety concerns that offshore drilling there will mean and also to ensure accurate safety measures are in place in the event of another disaster unlike that in the Gulf. Perhaps it’s a pause that we as a province might also want to take. The possibility that we may circumvent green programming because of the use of crude oil products and its benefits to government treasuries may be reason enough to ask the question of us; ‘Is offshore drilling for crude oil worth it?’ ”


For more information, contact;

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

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