Release:Numbers for Thursday, December 13,2012

Consumers to get an early Christmas present as prices keep dropping

Media release

Conception Bay South, NL, December 11, 2012- Consumers in Newfoundland and Labrador will see another retreat in fuel prices this week as commodity prices continue to slide in the face of weak demand. That news from George Murphy, group researcher with the Consumer Group for Fair Gas Prices.

Fuel prices drop

                “Demand is seen to be very weak, if not tepid, and there’s still no positive economic news worldwide that would spur demand. Consumers will catch an early Christmas gift as a result”, Murphy said. “It’s that lazy on the markets that, even with the international situation in the Middle east, the markets simply aren’t reacting. You would figure that, with anything happening in the area, that oil prices would have sky-rocketed. Even that doesn’t justify increases”.

The numbers

                “All the data is in. Distillate fuels are going to see a welcome retreat with heating and stove oils showing a drop of 4.01 cents a litre and Diesel fuel dropping by 4.6 cents a litre. A reminder here that both fuel numbers here may be affected simply because of the winter blend using kerosene, for which I cannot track. Gasoline of both types, is also down, with regular unleaded and reformulated blends both down by 4.7 cents a litre. It’s a welcome drop in the numbers before Christmas and keeps a buck in people’s pockets at a very important time of the year.”

Inventories of gasoline and distillate gain

                Call it weak demand, or call it warmer than usual weather, either way last week’s inventory report had good news for consumers. While crude oil inventories took a hit with a drop of 2.9 million barrels, distillate inventories, which includes heating, stove oils and diesel fuels, showed a gain of 3 million barrels. Gasoline inventories finished up for the week at over 7.9 million barrels from the previous week. The fact that crude oil lost but prices held, and then showed retreat, shows how much of an effect slack gasoline demand had in the markets.

OPEC to leave quotas as they are

                Word from Vienna this week, where OPEC members are seeking a replacement secretary general. Member nations are saying that they will not touch quotas at this time, as they don’t want to disrupt any possibility of a start to economic recovery, or put some imbalance in the markets. Presently, OPEC stands to break its own self-imposed quota of 30 million barrels per day by an added 1 million. OPEC may soon start to talk production cuts however, as non-OPEC member countries and the US shale oil industry add close to another 400,000 barrels a day in production onto the world stage. Look for prices to remain steady for the foreseeable future, if not start a slow retreat.

-30-

That’s it for this week!

Regards for now,

George Murphy

Group researcher/Member

Consumer Group for Fair Gas Prices

Twitter: @GeorgeMurphyMHA

Why I voted "No" today...

I hope everyone reads this note, and can understand why i voted the way I did today...I'm sending this note to the Telegram as we 'speak"...

Dear editor,

I hope you can see fit to print some of the reasons why I voted “No” …

1) I simply didn't like the "Take or pay" that was there that would have left the taxpayers on the hook for the project. If we are to be committed to buy 40% of the project

, then there was no guarantee that we wouldn’t have been on the hook for the difference, had we not consumed the forty per cent.
2)
I didn't see the assessments by government where they would be able to cover off needed government spending to fund all our social programs, like schools, government buildings, roads and such. The costs to government under the Muskrat scenario simply weren’t done. If costs to operate government facilities were going to be going up, then the taxpayer was also going to be left on the hook for what was needed. It places the taxpayer and consumer under the threat of increased taxes in the future. Municipalities too, with increasing electrical costs would also have to come to their taxpayers looking for more. I simply don’t believe the typical Newfoundland and Labrador family can afford more.

3) No PUB oversight of the project. It would have meant a lot to the confidence that people would have had in the project.

4) Changing dynamics of the north American energy markets. No proof of a market where it might take $5 million to smack a hole in the ground to extract natural gas. US domestic oil production numbers are going to be higher than they initially predict under the Mauderi scenario, if the trend keeps up. The US may have over 14 million a day in oil capacity by 2020, and that should have scared the crap out of government to take that second look.

5) People under wage freezes or increases tied to the rate of inflation would be left in the cold under the immediate electricity price increase from eleven cents now, to Muskrat's "promise" of 15.3 KWH. Core inflation doesn't include increases to basic energy.

6) Under a threat of dropping oil prices, we wouldn't have the revenue stream from oil alone from our own offshore, coupled with a disappearing electrical market in the US, we are going to be sunk!

7 Failing world economic situation, coupled with stagnant world growth, promises a slow demand for electricity and oil.

8) Federal loan guarantee itself only covers off $6.3 b in costs and not a cent more. Using our cash reserves leaves us in a precarious situation.

9) Carbon footprint. Mercury and methane gas would leave a large enough addition to greenhouse gases, rather than a combination of conservation measures. Housing, on January 6th of this year, put out a release of what could be done. According to their own release, a retrofit of houses they done of 2000 homes resulted in net savings of 35% in energy costs, resulting in keeping $800.00 annually in home disposable income.

10) And I'll leave you with this. I have more: Development now, of NG on our shores could have resulted in saving the government millions in its own heating costs in the St. John's area by taking residual steam from the burning in the NG electrical generation process, and heated every government building and institution in the St. John's northeast. MUN spent something in the order of $53 million in oil heating costs last year alone, not to mention, schools, the government buildings, old age homes, etc., that would have saved the government in heating costs. Installing it in the northeast somewhere close to the dump would have resulted in a possible methane recovery program from there, resulting in a smaller provincial GHG footprint.

11) Just one more...A complete lack of vision in selling ourselves to more possibilities. Now, under this scenario of Muskrat, we're under risk of losing one of our only profitable crown corporations in the form of NL Hydro. We're headed down the course of electrical de-regulation!

Today, I voted "no", and I'm proud I did. What I'm not proud of is the fact of the procedure today that has set us on a course for something terrible. We could have worked together in a committee structure to explore all the options and find that pay-off without putting everything at risk.

I hope the people of my district will understand. It was of them that I was thinking, whether it was the retiree on Shea Street or the senior struggling ona modest income in Kenny’s Park Apartments. The needs of the many far outweighed the needs, or the wants of the few.

Regards to all!

George Murphy
NDP MHA
St. John's East

Twitter: @GeorgeMurphyMHA  

Thursday numbers: December 6, 2012

Hi to all,

Sorry I'm late with the numbers, but the NLNTA Christmas Suite time is here, and when I finished that up around nine, it was back to the HOA until ten. Home at 11:30PM.

Here's what I have for price changes this week!

Heating and stove oils show just a 16/100ths of a cent drop per litre with Diesel dropping by 2.9 cents a litre.

Gasoline numbers slightly different, albeit both are down. My numbers

for regular unleaded gasoline shows down by 1/10th of a cent, while the reformulated numbers show a drop of 2.2 cents a litre down.

Remember that the winter mix of kerosene is in there for heating oils and Diesel and I can't track that one, so those numbers may be off slightly. The stove oil number should be close!

On a lighter note, thank you to everyone who announced the fundraising effort for a close friend of ours last weekend down at the Rob Roy.. We raised over $13,000.00 in five hours to help the family through some tough times in the next few months.

Couldn’t have done that without all your help!

Regards,

George Murphy

Twitter: @GeorgeMurphyMHA  

Numbers mostly down...Just a bit!

Weak data on the numbers for this week, all due to the US Thanksgiving Day holiday. Resulted in a few days where the markets were closed last week. Here's what I have...

Heating and stove oils show an added 95/100ths of a cent, while Diesel shows a drop of 1.4 cents a litre.

Regular gasoline shows a drop of 2.1 cents a litre based on just two days of data, while reformulated blend of gasoline shows a drop of 1.4 cents a litre.

By the way...I'm getting  a few notes here asking me to keep publishing the link to that Harvard study on world oil consumption and production.

Here's the link: http://belfercenter.ksg.harvard.edu/files/Oil-%20The%20Next%20Revolution.pdf 

It's really an interesting read!

Regards,

George

PUB needs to review Muskrat Falls again...

Hi to all,

This is a “must read” for anyone concerned with the Muskrat Falls project, whether you are for, or against it…

I’m forwarding this off to everyone on my blog. I think it’s one of the most important reasons why the government has to send the Muskrat Falls project off to the Public Utilities Board again for full review of the business case.

In fact, there might even be a danger here to our offshore energy exploration and development if this scenario is right.

There are several reasons why I believe them to be true, with the latest coming just the other day in the Globe and Mail story on Canada’s own energy industry that tells of the same dangers.

Several factors in this report also have changed. The author talks about the Bakken oil field development in the US Midwest that shows the immense growth on North Dakota oil production. Just back in 2006, they reported domestic crude production at just 30, 000 barrels per day. Last week, the Globe reported their production had increased to 756,000 barrels, above Mauderi’s own projections of 530,000 BPD in this paper.

Last week, US domestic oil production reached 6.8 million barrels per day, up from last year’s domestic number of 5.1 million. The difference, if stretched out until 2020, the same year he projects production to 11.6 million barrels, US domestic production could total near 14 million barrels per day. That figure alone is staggering!

All the projections on natural gas are in there too.

He’s projecting a drop in oil prices to $50 and $65 US by 2015 and worldwide demand growth of just 1% . The International Energy Agency projects 1.6%, but that number has been adjusted downwards three times already.

Now, if the US starts getting into electrical generation using natural gas, we have a problem finding markets for excess electricity. We could be saddled with an immense debt to pay off through the rate payers or through any increases to taxpayers to offset the losses of Muskrat Falls.

It’s probably a big reason why some have not signed on to bring the power across the Cabot Strait yet either. They’re possibly waiting for the world to unfold, as we should…

Read the report here:

http://belfercenter.ksg.harvard.edu/files/Oil-%20The%20Next%20Revolution.pdf

Regards,

George Murphy

Twitter: @GeorgeMurphyMHA

What a week in the markets so far!

Hi to all,

Here's what I have for price changes this week, but there is a little disclaimer for this one!...
Data comes from just six days out of the seven needed...

Keep in mind the winter blend is being used for heating oil and diesel fuel, so, even with all the numbers, they're still off somewhat.

·         Heating and stove oils show an added 4/10ths of a cent.

·         Diesel shows an increase of 3.1 cents a litre..

·         Regular gasoline shows a drop of 7/10ths of a cent.

·         The reformulated gasoline blend shows the opposite, an added 7/10ths of a cent.

Local highlights

·         No sign of the heating rebate program. Still no notice of the heating rebate program, although we’re told it will be coming “shortly”. I’m wondering how come we have to wait for the announcement when government should just make the program a permanent fixture.

·         U.S oil and gas production set to increase to self-sustaining levels by 2017 and number one in the world by 2020. I’m surprised that no one in the media has picked up on the impact of the shale oil and gas revolution that may very well impact our southern market. IF the US becomes self-sufficient, and domestic oil production picks up worldwide, as predicted what does that do to our price, let alone the hope of getting oil companies to come in and do other offshore work. More to follow on this, as the implications are obvious!

Market highlights

·         Middle East violence adds volatility to the markets. Oil up slightly one day and down again the next. The promised violence in the Middle east always a factor in oil prices, doesn’t seem to be having too much of an effect on prices, even though there is some correlation. Other incidents have led to much larger increases in oil. The promise of a possible halt to violence may be a late factor.

·         European Union enters another recession. Escalating unemployed numbers, with Greece setting a new record of over 25% unemployed, has pushed the EU back into recession, at least on paper.

·         Crude oil supplies up on latest US inventory report, but gasoline and distillate inventories take a hit.

·         Hurricane Sandy recovery still ongoing. Two refineries left to bring online. Production totaling 300K from both.

·         US domestic production hits another record. The 5.1 million barrels per day figure of last year was shattered in an announcement from Bloomberg’s last week when they reported a huge increase to 6.7 million barrels a day of oil production.

That’s it for this week!

George Murphy

Group researcher/member

Consumer Group for Fair Gas Prices

Twitter: @GeorgeMurphyMHA

Thursday numbers...Not much change

Hi to all,

                Here’s what I have in the way of price changes for this week:

·         Heating and stove oils show a drop of just 17/100ths of a cent

·         Diesel shows a drop of a cent.

·         Regular gasoline shows an increase of 1.4 cents a litre, and…

·         Reformulated gasoline shows an added 1.7 cents a litre.

Key market highlights

·         Key reports show the United States to become one of the world’s leading producers, even surpassing Saudi Arabia for a time. US to reach self-sufficiency by 2030.

·         Crude oil, gasoline and distillates all show inventory gains in last week’s US Energy Information Administration report.

·         Forecast for gasoline prices to start to drop, but uncertainty remains in the wake of Hurricane Sandy’s disruption of US northeast supplies.

·         OPEC sees the potential threat in shale gas. Expecting crude demand to drop by more than 1.6 million barrels a day by 2015. A combination of shale gas and rising domestic production from countries like the US, Brazil and Canada, combined with worldwide laws on conservation measures will weigh heavy.

Final thought

                With the massive changes we have been seeing in recent weeks, particularly the latest news on rising US domestic production and self-sufficiency, should Newfoundland and Labrador take another look at its energy plan and strategy, knowing that we’re looking south of the border for most of our oil and potential power sales?

That’s it for this week!

Regards,

George Murphy

Group researcher/Member

Consumer Group for Fair Gas Prices

Twitter: @GeorgeMurphyMHA