Oil prices up
Distillate users to be hit hardest

Media release

Conception Bay South, NL, August 30, 2011- A four dollar increase in the price of oil will hit distillate users the most this week when the Public Utilities Board adjusts prices this coming Thursday. That’s according to George Murphy, group researcher with the Consumer Group for Fair Gas prices.

“Oil prices increased this week with some positive economic news breaking all week, especially with housing unit sales in the US and a draw-down of crude oil stocks last week. Oil has risen by close on $4.00 US a barrel in the process. Now investors are also trading on supply fears with some minor refinery outages and re-starts in the US northeast in the wake of Hurricane Irene. Hurricane syndrome is at play in the markets, especially with a sharp upwards movement in gasoline prices on the New York Mercantile Exchange today that took a chunk out of consumers’ pockets this week,” Murphy said.

Distillate movement not good

“Distillate users will notice increases across the board with heating and stove oils forecast to increase by 2.54 cents a litre. Diesel prices will also spike upwards with numbers showing an added 1.9 cents a litre. Gasoline initially showed a drop of close to a cent and a half but that is now showing just a four tenths of a cent decrease on the way to consumers after today’s speculative trading. Distillate movement upwards was indicating a turn of attention away from gasoline to distillate fuels as of yesterday, indicating the close end to the summer driving season, and the approaching winter heating season.”

Conflicting news

“I monitored this storm closely, in spite of the few refinery complexes in the US northeast. Initial word from several news sources indicated that there were no problems with refinery outages just last night to today’s news of flooding in some refineries along the eastern seaboard. A “investors panic” set in the markets that I like to call ‘Hurricane syndrome’ and the result was a 23 cent a US gallon increase in price from Monday’s market close to today’s market close. Someone in the US really needs to investigate the reasons why there was erroneous information spread like wildfire in the markets and put a stop to the speculation. They simply aren’t dealing with the reality of the situation. I would have expected a drop in imports of oil to the US northeast and an increase in gasoline supply, as demand would have wavered in the wake of the storm. The end of this pricing session does not bode well for next week’s gasoline setting, let alone winter heating oil prices. Frankly, I’m worried about the coming winter again.”

-30-

For more information, contact;

George Murphy

Group researcher/Member

Consumer Group for Fair Gas Prices