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Tuesday, September 20, 2011

Sorry I'm so late!
Out on the door-steps all week!

Consumers to catch a small break

Winter heating projection out

Media release

Conception Bay South, NL, September 20, 2011- Consumers should see no real increases in heating oil prices this winter, if the world financial and geo-political situations stay as they are. That’s from George Murphy, group researcher with the Consumer Group for Fair Gas Prices.

Winter heating projection

‘There are some factors that are playing well into the picture being formed on heating oil prices. Evidence is slowly mounting that tells me there is no room for any increase in prices, simply based on world economic, consumer and financial factors”, said Murphy.

“While investors and OPEC members are waiting for word of a possible drop in world demand based on the European Union member country’s ability to deal with debt problems and the fact that the US could possibly be entering a recessionary period. If that is the case, then it looks like there’s no reason to see heating oil prices increase beyond where they are now, barring any other outside factors. Continuing builds of distillate inventories should hopefully insulate consumers from any added increases in price at least until December month. What we see right now, essentially, is what we’ll get, but there is room for prices to drop back, if economic factors from Europe and the US come into play.”

“we’re also dealing with prices that are robbing consumers of disposable income. Prices are really high as they are now with consumers having trouble paying the prices as they are. That itself is a factor in inventory building, as consumers will only buy as much as they need to get by, and not as much as they need to be totally comfortable. Prices need to drop for all fuels in order for everyone’s economic situation to improve.”

“The other clue that there shouldn’t be any upswing in prices comes strangely from OPEC members Libya and Saudi Arabia. Both countries are calling for world oil prices to remain stable between $80 and $100 US a barrel. Generally, what the Saudis say is paid a lot of attention by oil market profiteers, and with a new government in Libya being seen as more moderate, you can bet that they’ll have some influence as well on oil prices and what consumers will pay for the immediate future.”

“Don’t get me wrong. There are still going to be people out there that will still need to fall back on rebate programs, but the news here is that the rebate programs are still in place along with the removal of the provincial portion of the HST. We’re just going to have to start working on the federal government for the removal of federal taxes on heat now. It could be a longer road to get there, but not insurmountable.”

Numbers are in.

Here’s what I have for this Thursday’s price change:

· Heating and stove oils show down by 79/100ths.

· Diesel is down by a penny, and…

· Gasoline is also showing down, but by 2.7 cents a litre.

Market Notes

· OPEC member nation Libya is again exporting oil onto the world markets. Numbers show the country has exported a rough 160,000 barrels a day in the last month as the war-torn country strives to revive its oil industry. It is not known when the country will again achieve its original OPEC quota of 1.5 million barrels a day.

· Also from Libya, the country’s National Transitional Council (NTC) will try and arrange an increase in quota from OPEC as the country tries to recover from war. The Libyan NTC is also looking at oil prices sustained around the same mark the Saudi Arabian government is looking for; prices between $80 and $100 US a barrel. OPEC will meet to discuss the Libyan request in a December meeting in Vienna.

· Oil is still trading between $80 and $90 US a barrel as the European Union financial situation, namely from member countries like Italy and Greece, both play a role in future demand for oil. It’s thought that austerity programming and a possible world economic slowdown will stymie demand for oil products. It seems the markets are in a “wait and see” pattern as investors are waiting for proof that the worst is behind us, and that hasn’t happened yet.

That’s it for now!


George Murphy

Group researcher/member

Consumer Group for Fair Gas Prices

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