Consumers to take a hit

Hi to all…

Here’s the final numbers and what to expect with all seven days of data now in.

Sad to say, but after last week’s drop, they’ll be increasing again.

· Heating and stove oils show an increase of 2.45 cents a litre.

· Diesel shows an added 2.1 cents a litre, and…

· Gasoline shows an added 4.5 cents a litre.

Highlights

European Union money woes

The bailout of Greece continues to weigh in the markets the last week after the Greek government passed austerity measures to pay off debt financing from the European Union. It will be some time before faith is restored enough in the financial markets of Europe to say that the financial crisis is over however. Greece has maturing debt that will probably be called in by other institutions in the next few years that some fear that Greece will eventually have to face a default situation.

In the meantime, investors poured money back into commodities from other currencies like the US dollar, and that resulted in the rise of oil prices and refined commodities.

Saudis to keep production the same

It was thought by some in the markets last week that OPEC’s leading oil producer, Saudi Arabia, would follow western nations in increasing oil production after some western nations decided to release oil from strategic reserves.

“Not so fast” now seems to be the catch phrase in the markets after word got out that the Saudis would instead reign back oil production with the US moving first to increase overall crude oil supply. The Saudis walked into a meeting of OPEC members two weeks ago asking fellow members to increase output to keep oil prices down to $90 US a barrel, but they were met with opposition to any increase in output by Iran and Venezuela.

The move by the west was designed to bring down oil prices in the hope that the timed release of oil would help replace lost Libyan oil production as well as drop the price of oil. Western leaders like President Obama of the United States openly stated that high oil prices were going to hinder any possible economic recovery and the move was an attempt to bring prices down.

Inventories drop

Crude oil and gasoline inventories took a pounding last week with total refinery production picking up to range 88% of operable capacity. The numbers pointed to a pickup in demand and a sign that consumers were buying in spite of the high price again.

That’s it for this week!

Regards,

George Murphy

Group researcher/Member

Consumer Group for Fair Gas Prices