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Tuesday, July 16, 2013

Ok Big Oil...This isn't funny anymore!



Consumers to take another hit at the pumps
Heating rises for the fifth week in a row

Media release

St. John’s, NL, July 16, 2013- Consumers in Newfoundland and Labrador will see another jump in prices at the pumps when the Public Utilities Board adjusts prices this week. That news from George Murphy, researcher with the Consumer Group for Fair Gas Prices.

Heating up again
“This latest expectation of another increase really hurts the consumer. We’re looking at another increase to heating oil, which miniscule, still adds to a high heating price starting point when, traditionally, heating prices have been dropping. It could be a very cold winter for some out there.” Murphy said.

Gasoline up to another high
“To add to the consumer, add another increase to consumer gas prices which have reached the second highest level since 2008 when oil prices hit a record $147 US  a barrel before the late July collapse in prices that year. Consumers could be looking at another 4.6 cents a litre at the pumps when they wake up on Thursday morning.”

In the numbers
Here’s what to expect with the Thursday morning price change:
·         Heating and stove oils are expected to increase by 23/100ths of a cent a litre.
·         Diesel shows a drop of just 1/10th of a cent. No change here with my margin of error of three tenths of a cent on a litre.
·         Regular gasoline shows an added 4.6 cents a litre, and…
·         The reformulated gasoline blend shows an added 6.3 cents a litre at the pumps.

Not fair to consumers
“ in spite of another record drop in oil inventories, we’re still at record levels of oil inventory on hand. What really plays into the latest increase falls back on the massive draw-down in inventories last week, matched with a high refiner capacity number that saw almost ninety three per cent of refiner capacity taken up. That is a signal of increasing demand from consumers, and until we see demand drop, we won’t see any relief at the pumps unless inventories of oil and gasoline increase again. That seems to be the word on the street.
What we’re not hearing from Wall Street is the effect of these high prices on consumers that can send any economic recovery into a tailspin. They remain ignorant of the facts that we simply can’t afford high prices. That should be making investors retreat from oil, but they’re not…yet.”

 Prices rising
Here’s more…for the various changes for roughly the same week all back to 2007:
July 19/12 …$1.31.6/Lt
July 14/11…$1.33.1/Lt
July 15/10…$1.08.5/Lt
July 16/09…$1.05.4/Lt
July 17/08…$1.49.3/Lt
July 19/07…$1.16.4/Lt

Chinese GDP less than expected

It will prove to be a sore test for the government of China in getting gross domestic product up again to world expectations in the next little while as GDP has not kept up with falling demand for Chinese products. What may help China in the long run may be expectations of a world economy that shows signs of picking up speed before government makes any moves to improve its own economic output, and that’s where Chinese challenges lay. Before government there makes any moves, the changing dynamic of the world economy may make it easier for the Chinese government to be “hands off” for now, before it may make any rash decisions like increase interest rates that may slow things down further. It’s “wait and see” on the Chinese economy and for any further increases in oil prices for now. Gauge that with an increase to other worldwide consumer spending, and we may not be out of the woods yet. Will Chinese manufacturing keep up with a world economy picking up steam?

-30-

For more information, contact;

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

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