Consumers to get an early Christmas present as prices keep dropping
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”.
“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.
That’s it for this week!
Regards for now,
Consumer Group for Fair Gas Prices