Oil prices bounce back

Consumers to take a hit

Media release

Conception Bay South, NL, May 31, 2011- Consumers will see a solid move upwards in prices when they hit the pumps on Thursday morning. That's according to George Murphy, group researcher with the Consumer Group for Fair Gas Prices.

"Numbers are solidly up this week after oil's rally in the markets," Murphy said."Prices rebounded for oil and that pushed refined prices up further after they made a move upwards even before oil prices did. I don't get it, especially when crude oil supplies are the highest they've been in two years and demand is dropping off somewhat."

What the numbers say

"Heating and stove oils are up by 2.94 cents a litre. There's still no sign of a drop in the price of the important winter heating fuels when there should be. We're entering a non-demand season for heating oil and the numbers are rising. Diesel is also moving upwards, showing an increase on the way of 3.2 cents a litre."

"Gasoline prices will also take a move upwards with that fuel showing an added 3.8 cents a litre at the pumps come Thursday morning, the first increase in four weeks. It's easy to tell we're into the US summer driving season. Not only are the leaves coming out, the speculators are too.

Changes need to be made to trading laws

News out of the United States late last week included proof from our group that changes needed to be made to trading laws in Canada, besides south of the border. The United States Commodities Futures Trading Commission (CFTC) has pressed charges against two speculators who made over $50 million US trading in the WTI crude oil futures market between January and April of 2008. Senators are looking for changes to trading laws
.

"What they were doing was a practice called "shorting", or trading a commodity for a sum of money and then selling very quickly for a profit before paying the original bill. It was like going to a car lot, bargaining a price for the car, then turning and selling it to someone else for a huge profit before you had even paid for the car. It's like these guys thought they owned the markets before they had to pay for the trades they made."

"Is it ironic that these two may have been just part of the reason why oil prices enjoyed a run-up to $147 US a barrel that spring, only to collapse, and almost caused a catastrophe in the world economy with high energy prices? Someone try and tell me that Canada shouldn't act to protect consumers from this."

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For more information, contact;

George Murphy

Group researcher

Consumer Group for Fair Gas Prices