Again, my apologies for being late posting. It's a long day on the campaign trail!

Canuck buck takes it on the chin

Oil drops on financial and economic news

Media release

Conception Bay South, NL, October 4, 2011- Consumers would be surprised to find that in spite of a drop in oil prices, there’s no huge changes to fuel prices. In fact, there’s a slight increase to gasoline. That’s according to George Murphy, group researcher with the Consumer Group for Fair Gas Prices.

“What’s more apparent in this week’s data is how much of a beating the Canadian dollar has been getting against the US greenback. We’ve lost close on seven cents since September 21^st . This pricing session saw us lose four cents against the US dollar and that figure is central in figuring out price changes. The loss is that extensive against the US dollar that, while numbers in US terms are down just slightly, they’re showing ’up’ for Canadians.’ Murphy said.

“Seven days data shows heating and stove oils to drop by just 15/100ths of a cent for consumers while the US price per gallon has dropped nine cents a US gallon. Diesel is projected to increase by a half penny.”

“Again, I will be cautious here. My numbers may be off as there’s plenty of market volatility out there! Six days of data shows the US price for gasoline down by seven cents a US gallon but a 1.4 cent a litre increase to Newfoundland and Labrador consumers as a direct result of the drop in the Canadian dollar. If the dollar had held all week, we would have seen a drop of close to two cents instead. That’s all in spite of oil prices for West Texas Intermediate dropping by $6 US over the pricing session. It’s not easy being too closely connected with the US economy.”

Fears over a default by Greece and the bailout plans for other European Union nations continues to rage in the markets and the economic news out of the US doesn’t help the situation much either. Bernanke’s comments about the US being perilously close to recession added fears of a drop in consumer spending sent oil prices downwards. If consumers aren’t going to spend, then a drop in demand in refined products isn’t far behind.

“What we need to see now is the Canadian dollar to stop falling and we’ll see refined commodity prices begin their retreat as well.”

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For more information, contact;

George Murphy

Group researcher/Member

Consumer Group for Fair Gas Prices