Prices steady for this week

Word from Saudi Arabia may bring price relief Next week

Media release

Conception Bay South, NL, January 25, 2011- Consumers in Newfoundland and Labrador will see some changes to pricing this week when the PUB moves to adjust prices, but they may not experience any major pricing relief until next week. That's from George Murphy, group researcher with the Consumer Group for Fair Gas Prices.

"The numbers for this week don't show a lot of movement, but the news out of Saudi Arabia may be enough to play into downwards pricing pressure for next week," Murphy said. "This week, I have heating and stove oils up by 1.03 cents per litre, diesel up by 4/10ths and gasoline shows a modest drop of 9/10ths of a cent.

However, I'm watching the last day of this regulation period with great interest as the Saudi's have entered the news, affecting spot prices during the last day or so. My numbers are already showing a drop in all prices coming for next week on the news from the markets today, and I'm hopefull that this pricing trend will continue for the next week bringing some pricing relief for the next price setting. Consumers may want to gauge their purchases accordingly."

Saudis announce possible production increases

"The real break for consumers may come into play next week as, late yesterday, the Saudi Arabian energy minister, Ali Al Naimi said that the Saudi Arabian government does not want to see oil prices break the $100 US per barrel mark. In his statement to Bloomberg, he talked about the possibility of high oil prices doing damage to the world economy, something we've been talking about for a long time now. What he also said that was so important was the fact that other OPEC countries were prepared to boost production to keep prices below the $100 US per barrel mark and that fact alone tells the world that even OPEC is nervous about the price of high oil on any recovering economy.

Signs that world economic recovery has stalled

"News from London was not good today with the British government announcing that their economy contracted by a half percentage point and gross domestic productivity also unexpectedly shrank during the fourth quarter. Match that with numbers out of the US that signaled a stall in residential housing prices in the US and we have good reason to see why oil prices have also stalled. No one has the money to buy, and there are good signs that no one can afford high energy prices.

Also out of the US, there is expectation tonight that there will be a build in US crude oil inventory that may also be signaling a stall in consumer demand. I believe that what I predicted earlier is now coming to fruition: that high energy makes economic recovery that much harder. It's just unbelievable that world leaders find it so hard to believe too."

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For more information, contact;

George Murphy

Group researcher/Member

Consumer Group for Fair Gas Prices