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Tuesday, July 27, 2010

Not much change in the numbers

Hi to all...

Another quiet week in the markets means not much movement to fuel prices again this week.

Here's what I have coming for this Thursday morning when the PUB moves to adjust prices:

  • Heating and stove oils should drop by 37/100ths of a cent.
  • Diesel to drop by 4/10ths, and...
  • Gasoline shows an added 8/10ths of a cent.

Some market highlights:

  • Some lack of faith amongst consumers today resulted in a retreat by oil prices from a high this week of $79.30 US a barrel. Oil started out this pricing period at $76.28 US a barrel. What is known in the US as the Sentiment Index declined to a five month low on the US job outlook and that started today's oil sell-off. The expectation are that things are not likely to turn around for at least the next six months in the US as consumers worry over paying down debt.
  • July 23rd broke in Europe with the report of several European banks failing their means test. The test was designed to test the ability of main European banks to raise funds in the event of an impending credit crunch. The European Union ended up having to come up with another 4.5 billion Euro to cover those same banks adding some questions about European economic recovery.
  • Inventories of crude oil and its related refined commodities also showed gains in inventory, gasoline inventory increasing by 1.1 million barrels last week. While not a huge increase, it is possibly signaling weakening demand as consumers turn their eyes to the weak US economic recovery. Demand for gasoline remained at a stagnant two per cent over last years numbers.


That's it for this week!

Regards,

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

Tuesday, July 20, 2010

Consortium to build one billion deep water containment system


Word on the Bloomberg news site has it that Exxon, Chevron, Shell and Conoco-Phillips are investing $250 billion dollars each to build a deep water containment system that will be able to operate and contain underwater leaks as deep as 3050 meters (10,000 feet) in the Gulf of Mexico. Story here.
Is this collusion?...

According to the story, the system will be able to handle spills of close to 100,000 barrels per day and become part of any offshore deep water drilling program. It will involve piping the oil and gas to topside vessels to contain the spilled oil or gas. The system is said to be possibly adaptable to other areas where deep sea drilling is ongoing.

The story does not say if vessels designed for this use will be available at a few days notice or if they will be already on stand by at the drill site should an accident occur. It still makes one wonder what are the repercussions of not having such a system in place here in Canadian coastal waters, in particularly the Orphan Basin where the waters are 2800 meters, close to 9500 feet deep.

Do you think that Big Oil may be feeling the heat from politicians to erase any doubt about deep sea drilling? After the Gulf of Mexico disaster, do you think that voters might be having some influence over what government is deciding?

My personal opinion?...

This is an attempt to deflect any government from instituting any freeze on deep-sea drilling until safer drilling methods, and the cause for the Gulf disaster, have come forth. The United States and the European Union are already taking steps for a hiatus to deep sea drilling.

Of note here: It's awfully funny that they can collude to share a deep sea response like this but they can't share their clean-up strategy on the east coast of Canada, off Newfoundland and Labrador in the interests of company secrecy...

I'll be in touch!

Regards,

George
Numbers are all up by less than a cent

Nothing happening in the field of oil this past week. it's almost like the news has stagnated the markets somewhat.

From what I hear out there, there's still a bone of contention on whether there's a slowdown in the world economy again, and that may be part of the problem why any increase in oil prices has also stalled; until there is concrete news on unresolved financial issues worldwide. July 23rd is probably the date that everyone, investors included, is waiting on. It seems that countries like Spain, Greece and Italy will face the biggest test in handling their own debt and any resolution to their own financial crisis, the results of part of that test becoming known on that date.

Portugal, part of the European union's financial bailout just two months ago, faces an even deeper means test, all while Moody's has downgraded their credit rating again just last week.

In the meantime, here's what I have for this weeks price changes for Thursday coming:
  • Heating and stove oils will increase by 79/100ths of a cent.
  • Diesel shows an increase of 8/10ths, and...
  • Gasoline shows an added 5/10ths, just a half cent.

It's been really busy around here the past couple of weeks, and it's bound to get busier with all the things going on. Some of you know what's on the go. i just want to thank the lot of you for keeping us all in your thoughts and prayers!

I'll be here next week!

Regards,

George

Friday, July 16, 2010

The eighty seven days
For what must have been a small amount of time in the scheme of things, plankton and various forms of pre-historic plant life had come together to form a thick, gelatinous mass under a blanket of sand.
In Mother Nature's own primeval way, that same layer baked, rotted and transformed itself into one of man's most wanted chemicals that was ever discovered. Oil, sulphur, hydrates, carbon, methane, propane, and the list goes on. Either way, what once was life and buried long ago under a part of earth's crust,now serves man in it's death, and caused more death while it poured forth from a wounded earth many feet below the Gulf of Mexico.
What was once probing it, the remains of some of the crew and the drill rig, Deep Horizon, now all resting on the bottom not far away from the rent in Mother Nature's skin, this prize to keep man's existence going. The pursuit of black gold we now know again holds with it a terrible price.
So, what of the cost? So what if we don't know what it has cost the people of the southern US coastal states, victims of possibly cut corners, unknown participants in a bold experiment at getting the black gold into corporate hands. What was the bold rush forward to garner the wealth from Mother Nature's perfect hideaway all about, that safety had to take a back seat all about?
For eighty seven days the taps flowed freely, ruining lives and economies. Families again displaced in a region that has of yet to recover from Hurricane Katrina and Rita not long ago. For eighty seven days part of a vast eco-structure of birds, fish, and other wildlife was devastated, possibly not to recover for years.
Finally, the taps that spilled the black prehistoric goo from deep down were turned off.
Eighty seven days late...
5.2 Million barrels late, if the 60,000 barrel per day rate is right...
Why is it that here in Newfoundland and Labrador we have to let Big Oil sally forth into the abyss of the Orphan Basin off the coast, again probing the depths and piercing the underbelly in the search for crude oil without first waiting to find out what caused the environmental disaster in the Gulf of Mexico? For the pursuit of an added few coins to the province's treasury, are we about to fore go safety again and throw caution to the wind in the reckless search for oil?
In a bold move the other day, the European Union has begun a pursuit of tougher environment rules for deep-water drilling. The new rules will ensure also that any company drilling in deep water can demonstrate that they are capable of handling and fixing in the shortest of time any disaster or incident that may befall them in the event of an accident offshore. Do we have that security in the Orphan Basin?
While we sally forth in letting the Orphan Basin drilling program proceed, Norway has voluntarily placed a moratorium on any exploration of deep sea areas until the full extent and cause of the Gulf of Mexico disaster has become known. The United States has again placed a two year pause in deep sea drilling until they explore the safety standards that have been set. What is the rush that Newfoundland and Labrador go against a world standard that is now being set, albeit because of a disaster that we have yet to comprehend?
For what took millions of years to put together in the form of black gold that lies deep beneath charted waters, should we also take pause and follow a new world deep sea drilling standard?
Do we also want to risk the offshore environment, the fishery, and other far away coastlines because we ignored the warnings from deep down?
Can someone please tell me why we can't stop-just stop- for a few and take stock of the venture we are about to participate in?
I'm sure that if there is a vast amount of oil in the Orphan Basin, that it can wait a few more years and brew a little longer before we do something stupid.
If they want it bad enough, they'll come back if we say that Big Oil is going to have to wait for just a little bit longer. Right now, it just looks like the province and the Canadian government are part of a foolhardy venture we can ill afford to see go wrong.
Tell me, what is the rush?
Regards,
George

Tuesday, July 13, 2010

Numbers up slightly
Canadian dollar pares a larger increase to consumers

Media release

Conception Bay South, NL, July 13, 2010- Consumers in Newfoundland and Labrador will see a slight upwards adjustment in pricing when the PUB adjusts prices this coming Thursday. That’s according to George Murphy, group researcher for the Consumer Group for Fair Gas Prices.

“Oil prices increased close to seven dollars US since the last pricing adjustment and the Canadian dollar also increased in value with its US counterpart right along with it. The result is an increase in all prices I measure, but not a great one, considering that the dollar also gained close to three and a half cents also. That alone saved the consumer an average of close on 1.5 cents on every litre of fuel sold. Instead of looking at one cent a litre up this Thursday for gasoline for example, we could have been looking at a 2.5 cent a litre increase in prices instead,” said Murphy.

For this Thursday then, I expect gasoline to increase by one cent a litre, heating and stove oils to increase by 1.3 cents and diesel to increase by 1.5 cents a litre. The numbers are still hanging just under what was predicted early spring for this summer’s pricing of gasoline of $1.10 a litre. As surprising as it may seem, distillate numbers are still higher for this time of year, probably as a result of diesel’s usage as a main transportation fuel in Europe and elsewhere. It still brings some concern here with the advent of winter usage of distillates. There’s very little time left for the numbers there to come down before investors put winter pricing pressures to bear. Here’s hoping the numbers go down further for the rest of the summer!

-30-

For more information, contact;

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

Monday, July 12, 2010

Not much change in the numbers
There's not likely to be too much change in the numbers this week in spite of the overall increase in oil prices.
Last weeks final day of prices showed a slight retreat in oil prices down to just under $72 US a barrel. Since then, oil has increased to just over $76 US and is now again, on a downwards trend yet again. After today's activity, it's down to $74.95 US a barrel at market close today.
Here's what i have so far. Again, six days of data and if tomorrow's data also is down, there may be no change at all with some prices;
  • Heating and stove oils are up by 1.23 cents
  • Diesel shows an added 1.4 cents, and...
  • Gasoline shows an added one cent a litre increase.

So, what's up with oil? Why hasn't it gone bonkers as in other years?

Good questions, but there seems to be just one answer, and that one can be a loaded answer on my part, but it's best described in one word; trust.

Right now, and this is just my view, the investor is caught between the realities of a world market that has become "undefined". We used to know who could pay their bills and who in the world could spend. We used to know that it was a safe bet that we could take a summer vacation and still have a job when we came back from it. It is my view that this one-time reality has changed and that we simply are dealing in a world where we can't trust the economics of the world anymore, or, at least, not like we used to, and that reality is showing itself in the face of instability with oil prices.

When was the last time you heard of a recession where there were several world countries debt being talked about so openly? This world has become so small that information about debt-load has become a fixture of conversation right up there with who's going to pay the Visa bill next month.

We have countries so mired in debt; Dubai, Italy, Greece, Spain, Hungary, Portugal, Ireland and the United States just to name a few. While most of these countries have put in austerity measures, we still have to see the results of debt-load being paid down and a level of spending maintained by the same countries in question. We also have to see them maintain those payments back for loans to cover their debt-loads. Problem here is that I believe that investors can't trust their money on a concept that has yet to be carried out by the countries at question.

If that's the case, what we're witness to is a "wait and see" approach that investors have taken with today's world economy and probably why oil prices have stalled their regular, upwards summer climb.

It's probably another reason why there's a good chance we'll see another retreat in oil pricing too, at least until the markets are all something we can trust again. economies need oil, but economies need financial stability too.

I'll be back tomorrow night with the final numbers!

Regards,

George

Tuesday, July 06, 2010

Break for consumers coming as oil retreats

Media release


Conception Bay South, NL, July 6, 2010- Consumers in Newfoundland and Labrador will see a substantial drop in prices this week when the PUB adjusts prices this coming Thursday morning. That’s from George Murphy, group researcher with the Consumer Group for Fair Gas Prices.

“Oil showed a strategic retreat as the bad economic news told of a possible double-dip recession possibly about to hit the world’s largest consumer of oil. That, along with a retreat in the US dollar against the Euro also sent the signal for oil to lose ground, losing almost four dollars in the process. Jobs numbers down and gasoline inventory up, signifying weak demand for the product were also harbingers of possible troubles to come, not only with the US economic recovery but also with oil prices,” Murphy said.

“Heating and stove oils show a 3.55 cent a litre drop, 3.3 cents down on diesel pricing and a drop of 2.8 cents a litre for gasoline coming for this Thursday morning. I have to be a little cautious here as well, considering the US Independence Day holiday. Some of the data was not published so, I am going on the five days that I have and taking an estimate for the remaining days. There may be some subtle differences with the numbers this time around. Things should be back on track after the pricing adjustments have been made.

“The numbers I predicted for the run-up to summer have been right on so far. I predicted anywhere between $1.10 and $1.14 a litre for the first week of July and we’re there, and better yet, another drop in prices to carry us farther into the summer season. That should be a welcome break for anyone travelling at this time of year, and hopefully, another sign of things to come. I don’t expect to see a heavy play in pricing even if investors like to play the hurricane syndrome card. With demand weak, inventory building, and doubts about any economic recovery, there’s not much impetus to see oil increasing at this juncture.”

-30-

For more information, contact;

George Murphy
Group researcher/Member
Consumer Group for Fair Gas Prices
Numbers are down
You guessed it...
After this weeks trading session, the numbers will be down for next week and so will retail prices for the fuels I measure.
While I won't have the exact figures until later tonight, the data looks good. I expect heating and stove oils to drop close on 3.5 cents and diesel by close to the same.
Gasoline should go down another three cents a litre, according to what I have so far.
The trouble with data gathering this week is all centered on the US Independence Day holiday, which will offset the final numbers by a day. I should have most of the data by late this evening when I post the final press release and give you all the heads up.
Anyway, the word is : Expect a break at the retail level this coming Thursday morning.
I'll be in touch!
Regards,
George