Numbers for Thursday, June 20, 2013

Worth keeping an eye on...

Iran to enter Middle East fray?

In what could be the boldest move we've heard about in a long time, and one that is sure to get a reaction from the oil markets, Iran has announced that they will be sending 4000 troops from it's Revolutionary Guard into Syria to help bolster the Assad regime.

Don't be too shocked to hear that Iran desires some stability along its own front here. If Syria goes, then Iran probably won't be too far behind in experiencing a taste of internal conflict. This week also finds some proof in that pudding in that the United States will keep its forces posted in Jordan, another Middle East neighbour. Both countries have a seemingly similar distaste for one another ever since the Shah was overthrown all those years ago. To say that nothing will happen would at this point, be wishful thinking, but it appears that the Iranians want some sort of stability to preserve its own rule. What has made this situation more interesting in its nature is what's happening in a country squat between the two nations...Iraq.

Speaking of instability in the region, Iraq production is also seeing some disruption as the fighting in Syria becomes more fluid. Some battles there have overflowed into Iraqi territory just a year and a half after the US withdrawal. Any disruption there could be significant in the markets as Iraqi production was just nearing pre-war levels. Is it maybe the reason why Iran is sending in the troops; to stabilize Syria's eastern regions?

So, oil prices moved up $3 US a barrel this week on the news. Refined commodities followed with some gusto, but not enough to shock us at the pumps...Yet! While the numbers are up for the distillates this week, they're not up a whole lot on the gasoline front. So far, they've tracked more or less where I said they'd be for the summer; right around that $1.30 a litre mark for the immediate St. John's area. 

So far, so good...That's if things settle down a bit in the Middle East and barring any other outside conditions like hurricanes.

We'll keep you posted.

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

• Heating and stove oils show an added 2.77 cents a litre.
• Diesel shows an added 2 cents a litre even.
• Regular gasoline shows a slight increase of just 9/10ths of  a cent a litre, and...
• Reformulated blend shows just an added 1/10th of a cent.

That's it for this week!

Regards,

George Murphy
Consumer Group for Fair Gas Prices
Twitter: @GeorgeMurphyMHA