Update #2

Isaac is still in play…

Consumers will pay more this week

Media release

Conception Bay South, NL, August 28, 2012-Hurricane Isaac has played a rough coarse on gasoline numbers to consumers this week, but it hasn’t hit land yet. The real news to consumers may come after damage assessments start in the Gulf of Mexico tomorrow. That news from George Murphy, group researcher and member of the Consumer Group for Fair Gas Prices.

Isaac takes a swipe

“Numbers are very volatile for the last two days of the regulation period. That was all due to the final track of Hurricane Isaac when the storm’s course became clear that it would result in supply and refining shutdowns,” Murphy said. “It’s clear that the storm has had an effect on prices, but the story may not be over yet for the play by the wolves in the marketplace. Things will be a little volatile in the markets for a bit until any storm damage becomes evident.”

The numbers

“Numbers show just a minute rise in distillate fuels with heating and stove oils forecast to increase by just 61/100ths of a cent and diesel to rise by just 8/10ths of a cent. Gasoline prices are predicted to increase by 2.7 cents a litre, but that number may be off somewhat because of volatility in the markets for both Monday and Tuesday. I am cautious about the gasoline numbers!”

Storm damage may cost consumers next week

“It’s ‘wait and see’ for next week. Depending on how long it takes for refineries to come back to working order will determine just what damage it will do to consumers pocketbooks. With this storm being agonizingly slow to move across the Gulf of Mexico, it is promising to be a heavy rain event with much flooding being predicted. It’s rain that takes most refineries off-line, and not necessarily the winds. Most of these facilities can stand a certain amount of that, but rain and refining are not a good mix. Depending on how much refining will be disrupted depends on how much prices will be impacted. Right now, there’s approximately 900K barrels of production off-line and not available to consumers. Rain means flooding, and that means electricity has to be turned off, and it takes time for refineries to re-boot again after a shutdown.”

“I expect to be some kind of market play, although not as much as the Katrina and Rita events of 2005, but again, that depends on the damage. Isaac is coming ashore as a category one, whereas, Katrina came ashore as a category three. Consumers and government alike in the US won’t stand for Big Oil to make the market play like that again. Back then, consumers in Newfoundland and Labrador saw the St. John’s and area hit $1.48.1 at the pumps, while other regions of the country briefly hitting $2.25 a litre in the Newmarket, Ontario markets, and $1.89 a litre briefly in the immediate Halifax, Nova Scotia markets. I don’t think they’ll see that repeat again either, but they will be subject to an increase elsewhere as well.”

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For more information, contact;

George Murphy

Group researcher/member

Consumer Group for Fair Gas Prices

Twitter: @GeorgeMurphyNDP

Update #1:

U.S and mainland Canada consumers will take a hit tonight.

If you're in a mainland Canada unregulated market tonight, you might want to get to the pumps as the first round effects from tropical storm Isaac and the market wolves out there, take a bite out of your pocketbook.

Gasoline spot prices have shot up by close on 18 cents a US gallon late today on news that Isaac has succeeded in shutting in almost 75% of Gulf of Mexico oil production.

US consumers can also be expected to take a hit from today's trading, all in spite of oil's slight retreat. refined commodity prices have increased in anticipation of the drop in production as well as almost 900K barrels of refining per day has come to a halt along the storms path.

More later...

George

Tropical Storm Isaac at play in the markets

Just a quick note...

I’ve been watching “Hurricane Syndrome” season play itself out in the markets this past week. Numbers are reflecting the possibility that consumers will see something of an increase to come this Thursday, but the real news of any price spiking may come after the storm comes ashore somewhere along the Louisiana and Alabama coast.

Any landing of the storm itself will probably be enough to shut in any production and possibly disrupt refining of product. That’s the bigger worry to gasoline trading on the New York Mercantile Exchange (NYMEX). It’s the water and not the winds necessarily that will be more disruptive to consumer prices.

So far, while numbers are up slightly to consumers this week, it’s the aftereffects of the storm that might hit us harder. Mind you, the similarities between Katrina just seven years ago, and the track of this storm, are both eerily similar, and the consequences of the strength of the storm in the next day or so, will be well worth something to watch out for.

Numbers so far show an increase of just 7/10ths of a cent to heating and stove oils, an added one cent to diesel prices and gasoline shows just 1.6 cents a litre upwards. Nothing of concern here yet…

This morning shows gasoline trading upwards by 11 cents a US gallon which, if it holds through today and again tomorrow, may boost these numbers upwards by another penny or so to all fuels, but again, nothing substantial until we hear of the damage the storm has caused. Right now, the wolves are in the marketplace and they’re looking for any excuses.

Regards for now and I’ll be in touch if anything happens out there!

George Murphy

Group researcher/member

Consumer Group for Fair Gas Prices

Twitter: @GeorgeMurphyNDP

Distillate fuels take another hit
Oil up $3 US on the week

Media release

Conception Bay South, NL, August 21, 2012- Consumers in Newfoundland and Labrador will notice another slight increase to gasoline prices this week when the Public Utilities Board makes their weekly adjustment to fuel prices, but the real story is the increase to distillate prices, like heating and diesel fuels. That news from George Murphy, group researcher for the Consumer Group for Fair Gas Prices.

The numbers
"Heating and stove oil numbers are showing another increase this week of 1.66 cents a litre. That would bring all current heating and stove oil prices over the $1.00 a litre mark again, well ahead of the winter heating season. Diesel fuel prices are expected to increase another 2.0 cents a litre bringing diesel prices to $1.35.5 a litre on the Avalon and $1.70 to coastal Labrador. Gasoline prices are expected to increase by just 8/10ths of a cent a litre", Murphy said.

Consumers will be hurt
"From all appearances, it looks like there's less of a focus on gasoline prices for the second week now as we are quickly coming to the end of the summer driving season. The focus of investors has turned to distillate fuels with an important quarter for companies shipping via the use of diesel fuels and with the winter heating season the next "big thing" to invest in. Sad to say, but prices for heating and stove oils simply didn't see the retreat in prices that is normally seen during the summer months, and consumers are going to hurt again this winter, unless there's another downturn in the markets. We need to see that market correction happen soon, if it is going to happen at all."

Opportunity for methanol?
"While fuel prices south of the border increasing as a result of a possible shortage of corn-based ethanol production, there is an opportunity for government here to make strategic investments in other sources of oxygenates, like ethanol, that will do the same job. Methanol, for example, is a oxygenate that is derived from any wood fibre source, and any investment and research there could take pressures off food prices as a result. It would allow the recycling of any wood fibre material into methanol and also take the pressure off food prices, like corn, for which ethanol is derived. We could see another important source of oxygenates from any wood fibre that would allow for sourcing to the petrochemical industries, like refining. I've suggested this before, but it's only now, when we see gasoline and food prices increasing as a result of the possible shortage of corn products because of drought in the US, that it becomes important to look for other sources. The possibilities and implications to the recycling industry as a result, are undeniable, and there should be no good reason for consumers to take a hit on food prices because the petrochemical industry considers corn as a fuel rather than food!"

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For more information, contact;

George Murphy
Group researcher/member
Consumer Group for Fair Gas Prices
Twitter: @GeorgeMurphyNDP

Gas prices up on Iran, economy and a consumer tropical disease

Media release

Conception Bay South, NL, August 7, 2012- Consumers are possibly looking at a substantial increase in gasoline prices this coming Thursday on rising Middle East tensions and signs of an awakening US economy. That news comes from George Murphy, group researcher and member of the Consumer Group for Fair Gas Prices.

Increase to prices? Why?

“The latest us jobs report showed better than expected results and there’s some economic optimism that has awakened investors in oil and refined products. Consumers south of the border have already seen upwards of thirty cents on a US gallon this week alone. That was enough to show oil prices moving up by close on $5.50 over the last week! Increased by Refinery outages in the US western region, have also sparked gasoline figures,” Murphy said.

“We also have the specter of rising tensions in Iran and the ongoing situation in Syria. The fear amongst traders is that the violence in Syria will spill over into neighboring Middle East nations and disrupt supplies to the consuming countries. It’s because of a threat to consumers and business alike in this country that we need the security of supplies to look after us. It’s another strong reason for a national energy program geared to consumers’ needs first”.

The numbers

“Numbers show heating and stove oils to increase by a mere 42/100ths of a cent, while diesel is projected to increase by 1.6 cents a litre. Gasoline is projected to increase by close on 4.7 cents a litre at the pumps this Thursday morning, mirroring what has happened already to US consumers”.

Other factors await…

“I’m keeping an eye to situation in the Gulf of Mexico as well. It seems that some investment in oil was started early last week when the National Hurricane Center first projected Ernesto to swing into the Gulf of Mexico. Its early track had it hitting the Texas region, but that has since changed. It was an excuse early last week in helping to give a boost to oil prices. It seems that we’re also dealing with a touch of Hurricane syndrome. It is, after all, the season!”

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For more information, contact;

George Murphy

Group researcher/member

Consumer Group for Fair Gas Prices

Twitter: @GeorgeMurphyNDP