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Tuesday, June 26, 2012

Numbers down again this week
Look for a pause in the markets

Hi to all;

I missed one day of downwards volatility during the last week, so my numbers may be off slightly. Either way, they shouldn’t be out by that much.

Consumers will catch another break as oil prices still continued their downwards slide and, even as far as yesterday, their related refined commodities slid right along with oil numbers. While Brent crude has steadied, and even gained slightly in recent days, WTI still remains below the $80 US a barrel mark. Refined commodities like gasoline remained steady the last trading day, perhaps an indicator of a market pause after correction.

Here’s what I have this week:

· Heating and stove oils will drop by 2.17 cents per litre.

· Diesel will drop by 2.1 cents per litre, and…

· Gasoline shows down by 4.3 cents per litre.

Hope that this helps get the word out, in the meantime. I should be able to get back into the full swing of pricing and related oil issues with the House closed for the summer. I miss the place already!

Regards for now!

George Murphy

Group researcher/member

Consumer Group for Fair Gas Prices

Twitter @GeorgeMurphyNDP

Tuesday, June 19, 2012

Prices dropping again
Not good on provincial coffers though!

Media release

Conception Bay South, NL, June 19, 2012- Consumers just might have to "get used to it". Prices dropping, that is. Numbers are again reflecting some modest drops to consumers this week as oil prices continue to slip against uncertainties in the European Union financial sector and continuing doubts about world economic recovery. That news comes from George Murphy, group researcher with the Consumer Group for Fair Gas Prices.

"Oil prices have slowed their drop, but now consumer prices are down with some recent slides in refined commodity prices. It's exactly where we needed to see some positive sign of movement", Murphy said. "High oil prices aren't doing anything beneficial to economic recovery, unless you're in the oil business. Cheaper prices spark everything in an economy, including consumer spending."

Numbers down
"Numbers show some slight drops to prices. Heating and stove oils are projected to drop 91/100ths of a cent and Diesel with also a decrease of a half cent a litre. Gasoline is projected to drop by 1.6 cents a litre Thursday morning."

Where are oil prices going?
"There are several reasons why I can't see oil prices recovering anytime soon, barring any outside untoward factors of course.
  • Numbers aren't there to warrant oil rising on the juxtaposition of economic recovery, that remains an uncertainty.
  • The ongoing worries over the European Union member country's fiscal position is also a sore point with the mounting problem of debt countries of the Union being a concern. Any fiscal problem is seen as a chance for strong austerity programming brought in to alleviate any of the member country's problems, and that means tagging citizens with the problem. They, in turn, reign in on consumer spending."
  • Call it what you will, but consumers, industry and some governments themselves, are starting a sharp turn towards conservation efforts. It may be hard to believe, but the simple evidence over the past couple of months shows that consumers themselves could not tolerate prices where they were and made a collective impact on refiners. They conserved their fuels as much as refiners turned back the spigots, and that helped, so far, to keep abreast of inventory levels. Here we are now on the edge of the summer driving season with a drop in prices in our midst, and that's another good sign of strong evidence to that end.
  • The natural gas/fracking phenomena: While the focus has been driven on oil in recent years, the high price of oil became a rude awakening of the importance to several countries in the reserves they have already. That other option turned out to be fracking for gas and oil, the recovery in some cases of oil deposits even left over from previous exploration and recovery efforts. with the realization that fracking has started a revolution in energy of sorts, attention has to be paid to the fact that there is a "viable" alternative to traditional oil use. That fact alone and not "quantity" or "availability" is enough to turn the value of oil upside down. Keep in mind however, that it may not last forever. Some places will realize the dangers to water supplies for example, and may very well turn to other sources of energy, like wind power, as cheap and "inflation proof". I fully expect that natural gas deposits in stranded form will take precedence over fracking, due to low cost and less danger of environmental damage, as compared to each other. That may increase natural gas prices sooner than expected."

Province takes a pounding

"With Brent crude prices depressed for at least the next two years, until a strong sign of economic and financial recovery in the Euro-zone, expect royalties to the province to stay at a depressed level. While there are doubts in the world on economic recovery and fiscal position, look at your own spending habits and that of others. If oil prices started to rise, it could start another run of inflation and hence, an increase in interest rates as well. That could mean a restriction on consumer spending to an already tight household debt situation. In other words, any sharp oil price increases right now could be "self-defeating" in the game of royalties. The real danger here is not taking the time now in making sure a diversified economy is there to catch you in a time as troubling as this one may be. Remember as well that, with lower prices at the pumps, the tax take of the provincial government can also be expected to be lower than the projected in the budget."


For more information, contact;

George Murphy

Group researcher/Member

Consumer Group for Fair Gas Prices

Twitter: @GeorgeMurphyNDP

Tuesday, June 05, 2012

As predicted…

Numbers down this week.

Media release

Conception Bay South, NL, June 5, 2012- Consumers in Newfoundland and Labrador will see the benefits of a drop in oil prices this week when the Public Utilities Board adjusts prices this week, but it’s not as much as it should have been. That news from George Murphy, group researcher with the Consumer Group for Fair Gas Prices.

Dollar down

“Consumers will see a drop in prices this week, but the falling Canadian dollar actually cost consumers this week,” Murphy said. “Consumers could have been looking at an additional three cents a litre off each product price if the Canadian dollar had to remain untouched by the loss in oil prices this last week. Being a resource dollar with almost no supporting industry behind it, cost Canadians and Newfoundland and Labrador consumers. The dollar has lost almost five cents against the US greenback in the last month.”

The numbers

‘Consumers will see a drop of 3.91 cents a litre for heating and stove oils. Diesel shows a drop of 4.2 cents, while gasoline shows a downward move by 3.1 cents a litre. While a downwards move is positive, I’m disappointed that it could have been more.”

Market highlights

· West Texas Intermediate crude oil drops $21 since May 02, 2012 on European financial worries, US jobs reports and a glut of crude in the markets.

· Saudi Arabia produces close to 10.2 million barrels per day, according to figures from last month.

· US inventories of crude oil continue to climb to numbers not seen since the 1990’s. While gasoline inventory drops, capacity drops as well, keeping gas inventories in line with dropping demand.

Summer outlook

· Oil prices will remain near stable for the next month as markets try to figure out where the markets may be headed. Right now, “stability” is something they’re looking for.

· With the uncertainty of the world and particularly the European financial situation, there is no “motus apparandi” for oil prices to increase, but news isn’t quite bad enough to bring oil prices into another slide quite yet. It seems that what you’ll see after this Thursday’s price change may be about what you’ll see at mid-July for this year, the peak period of the summer tourist season. Give or take about two cents a litre from week to week to a maximum of $1.30/Litre for the summer.

· Oil inventories in the US to continue builds of inventories, ahead of any production cuts. That should be sign enough that US consumers aren’t in a spending mood, especially with a questionable economy. People are going to stick closer to home.

· US demand for gasoline to remain flat. Down by 3.8% at one point last month, refiners have been turning back the spigots in refining to “keep up” with the drop in demand, helping to mitigate too many losses in prices.

· Keep in mind the variables that could change things overnight with my numbers. Any economic improvement worldwide will be enough to start oil prices and their refined products up again, as will any change in the geo-political situation or “Hurricane syndrome” season upon us.

Hope this helps out there!


That’s it for now!


George Murphy

Group researcher/Member

Consumer Group for Fair Gas Prices

Twitter @GeorgeMurphyNDP

Monday, June 04, 2012

Six days in...
Numbers still down

Just a quick update for myself...

Numbers are still pointing down for Newfoundland and Labrador consumers in the wake of the slide in oil prices last week. Here's what I have so far, with one more day to go:

  • Heating and stove oils show a drop of 3.87 cents per litre.
  • Diesel shows a drop of 4.2 cents per litre, and...
  • Gasoline still down by 3.2 cents per litre.

Oil prices showed a very marginal increase today as oil showed gains in the cents per barrel. West Texas Intermediate increased to $83.98 US a barrel, while Brent crude increased to $99.02 US a barrel.

We'll take a wait and see approach to what's going to happen in the next little while with oil, but if inventory is any concern, there's a glut of oil out there. It's just not translating into some really big drops in refined commodities yet, even though numbers are down this week.

On the other side of these factors, the Canadian dollar has lost almost five cents against the US dollar over the last three and a half weeks. If we had to stay at par with the US greenback, we would be looking at a possible additional three cents a litre off all oil products.

I know...That one hurts!

Back again tomorrow night!



Friday, June 01, 2012

Update #1

Market trading this week spells trouble for oil

Consumers to see a price break

Quick note after the market activities this week:

With oil taking a pounding all week, it looks like consumers will see some benefit, if the province’s treasury doesn’t. This week’s activity shows both West Texas intermediate and Brent crude's both with significant drops in prices.

Brent finishes the week below the hundred mark at $98.81 a barrel US, while West Texas finished the week at $83.23 US a barrel. What does this translate for consumers, with two business days to go?

So far:

· Heating and stove oils show a decline of 3.77 cents a litre.

· Diesel shows a drop of 3.9 cents a litre, and…

· Gasoline dropping by 3.3 cents a litre.

I don’t expect a huge recovery in oil prices next week. The bad news coming from the world economy right now just doesn’t justify any increase in prices. That being said, the expected drops in prices could very well be more substantial than what I have right now. They would have been more than what I have right now except for the drop of the Canadian dollar against the US greenback. The Canadian dollar has lost four cents against the US in three weeks of trading.

That’s it for now!

I’ll have another update on the numbers Monday night!


George Murphy

Group researcher/Member

Consumer Group for Fair Gas Prices