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Tuesday, October 25, 2011

Weird week on the markets

Oil prices up but refined commodities down

Media release

Conception Bay South, NL, October 25, 2011- In spite of the price of oil rising by almost seven dollars US a barrel this week, consumers could be looking at a drop in gasoline prices instead. That comes from George Murphy, group researcher and member of the Consumer Group for Fair Gas Prices.

“It’s true. Numbers here are showing that, in spite of an almost seven dollar US climb in West Texas Intermediate(WTI) oil prices, consumers should see a 4.2 cent a litre drop at the pumps.” Murphy said. ”Of course, there is no accounting for any volatility that may be there that the numbers aren’t reflecting, but there is certainly a break for gasoline users there.”

“I don’t believe that I have ever seen this happen on the markets before. It looks like investors poured their money back into oil and treasury bonds south of the border, and didn’t put cash into refined commodities. I think they’re looking for solid ground, and the news from China and Japan on their economic growth seems to have signaled a return to WTI inventory numbers. It may be a case where investors didn’t want to see consumers driven to conserve in a forced run-up in prices as well, knowing the weakness of the markets. Refined commodity prices actually fell back after two weeks of gains. Other oil types like Brent, actually stayed relatively steady this past week in comparison.”

“The Canadian dollar also gained in value against the US greenback, reaching par earlier today before retreating to rest just slightly lower than its southern counterpart. That helped consumers gain back some of what was lost when the Canuck buck got burned against the US dollar when oil prices retreated just a few weeks ago. At that time, refined products rose in prices while oil prices fell.”

“Next week will be different. I expect to see some recovery in refined commodity prices with investors throwing money in just to catch up to where oil prices are going. No doubt, consumers will have to have a say in where prices will go. It’s probably time for consumers to impact inventory numbers again and send that collective message.”

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For more information, contact;

George Murphy

Group researcher/Member

Consumer Group for Fair Gas Prices

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