Increases on the way
Hi to all,
For the first time in a long time, consumers in Newfoundland and Labrador, New Brunswick and Nova Scotia will see a substantial hike at the pumps when their respective petroleum regulation authorities move to adjust prices this week.
Here’s what I have for price changes for this Thursday, covering Newfoundland and Labrador as well as New Brunswick:
· Heating and stove oils are showing an added 3.15 cents a litre.
· Diesel is also showing up, this time by 3.4 cents a litre.
· Regular unleaded gasoline shows an added 5.1 cents a litre upwards, and…
· Reformulated gasoline also shows an added 4.7 cents a litre.
Nova Scotia consumers will see another day of market activity before the final numbers come in, but they won’t be too far off what I have here. The writing is on the wall…
· Turmoil in Egypt and the threat to shipping of crude oil through the Suez Canal, causing a possible supply disruption. 2.5 million barrels a day flow through the Canal on any given day, so, while the political instability remains, the threat of a shut-down of the canal could disrupt supplies to the markets.
· A lower Canadian dollar trading against its US counterpart remains a factor. The exchange rate is important in figuring out price changes. As an example, a “at par” dollar would have saved consumers 4 cents a litre in yesterday’s trading alone! We would be talking an overall increase in gasoline prices by just a penny simply with this math, and not a 5.1 cent a litre increase at the pumps.
· US economy picking up a little steam this week. A good jobs number got them all in a buying mood, and that they did this week!
· US inventories took a huge beating last Wednesday. Crude inventories fell by 10.3 million barrels while gasoline inventories took a hit, being down by 1.7 million barrels on the week.
A different link
Bookmark this link. You may need it when the next hurricane hits! It’s a unique link to the US Energy Information Administration’s “real time” Storm Information Center that will give you an interactive map of hurricanes and their track on important US refining and production facilities. Tracks of the storm in the Atlantic (Chantel), and it’s possible impact on refining and production infrastructure is up and running right now.
Rail shipments to drop in light of Quebec accident?
While the accident in Quebec may speak to a possible hazard in shipping crude oil by rail, it’s not likely that you will see a drop in crude oil shipments by rail anytime soon. Rail shipments are the desired mode of transportation of crude oil from the US shale regions like Bakken and Eagle ford because they are so cost-effective. The second reason is that most of these shipments come from producing shale regions that may not have a big life behind their production. Producers like the fact that, even though a well may produce for two years’ worth of light oil, they don’t have to invest in huge infrastructure like pipelines to get their crude to markets elsewhere. Each car, by the way, holds about 500 barrels of crude oil. According to the American Railroad Association, there were 9500 carloads of crude oil shipped in 2008, but last year saw a whopping 233,811 carloads of crude go to market via railcar. It’s an astronomical number and tells well of how US domestic oil production has climbed in recent years!
The most that this accident will do is force governments to put in more stringent shipping regulations and move transportation costs up slightly.
As well, at this time, I would like to express my condolences to the families of those lost in this horrific disaster…
That’s it for this week!