"Say it ain't so, Joe!"
Not another price drop!

You saw it here first from my sarcastic self, and yes, you read it right...

It's been a wild roller-coaster ride on the markets for the past two weeks now, and there's no sign of abatement. The blog had over 2300 hits from people who, like yourself, wanted answers concerning high prices.

We're all still looking and we're not expecting Minister Tony Clement to come up with any either...

"Keep it simple, Tony."

We need a national inventory reporting system and an investigation into present trading laws on the markets. It's just getting too easy to spend money that you don't have, to invest in the markets and turn into a profit before the bills are paid.

It's as simple as that...

In the meantime, while numbers in the immediate Toronto area will be dropping again tonight, the numbers in Newfoundland and Labrador will also take a drop back this Thursday morning, all in time for the long weekend.

Still one more day of data to get my hands on, so the numbers will change slightly from what I have here, but I don't think that there's going to be anything critical in the way of further changes.

Here's what I have so far this session;

• Heating and stove oils show 14/100ths of a cent upwards.
• Diesel shows an added 3/10ths of a cent upwards, and...
• Gasoline shows a drop of 2.7 cents a litre.

I'll be back tomorrow night with a final run-down on the numbers for this Thursday.

Regards,

George

So, where are prices going from here?

It's a nice summer morning here in St. John's, especially nicer after hearing the news that fuel prices are down; and a lot of questions from people asking if the downwards trend will continue...

Here's hoping! The evidence is certainly pointing towards "steady as she goes" and also "down" in the best of scenarios. If I were an oil trader, I think I would quit, let's put it that way.

Right now, the news is not good if you are an oil man. With waning consumer demand for gasoline and another build in inventories this week, it's hard to wonder why there should be any price increase in the foreseeable future. The fact that North American drivers just aren't buying to the same degree that a lower price should dictate, should be a forewarning to most of the change that drivers are facing. Consumers are not cutting back on consumption because of price, they are doing it out of necessity that the economic situation is bringing to them. Prices for gasoline are now about 35 per cent lower than the same time period last year, yet demand, is recorded at a mere 6/10ths of a percentage point above last years numbers.

Consumers can't spend because of the uncertainty of the ongoing economic recession. I like to call this "enforced conservation" a new economic term you'll soon be hearing about in your favorite business news network or late night TV host!

Enter the ongoing prospect of an oil glut in the markets. While the data from the US Energy Information Administration showed a draw on US inventory, the same still shows a huge 47 million barrel surplus in stock in holding tanks that should be heavily drawn upon during summer months of the past. The word from OPEC is that they produced some 57,000 barrels per day more than their own self-imposed quotas during the month of June and this is only now coming into the North American inventory grid. Talks are abounding of $45 a barrel US oil in August, not heard for a long time during peak summer driving season. Some experts like Philip Verlager are even predicting $20 US a barrel oil and an imminent collapse in prices this winter at best.

Also adding to the downwards pressure on gasoline pricing in the coming weeks is a pick-up in US refinery capacity, up again this week to almost 88 per cent. With added capacity and waning demand, why would I as a trader even bother investing? There's no return here.

The only possibility of upwards pressure on oil will have to come from here but, right now, it's showing just like a St. John's July 16th morning : Nothing but clear skies!

The trend of falling prices might be around for a while. The news from the Alberta oil fields won't be all good if that's the case.

Hope this answers a few questions out there?

Regards,

George

Prices to take a down-turn
For now...

Media release

Conception Bay South, NL, May 6, 2009- Consumers in Newfoundland and Labrador will see a slight dip in prices for most petroleum products this week when the Petroleum pricing Office adjusts prices this coming Thursday, that’s according to George Murphy, group researcher for the Consumer Group for Fair Gas Prices.


What consumers should see
“Both heating and stove oils should drop by close on 2.1 cents per litre, diesel also heading down another 2.2 cents per litre. Gasoline will drop by just shy of a penny, 9/10ths of a cent on a litre. If the Canadian dollar were still the same value it was two weeks ago, we’d all be looking at an increase in gasoline pricing instead,” said Murphy.

“All petroleum pricing is down slightly in spite of the increase in crude oil prices, mainly because of the performance of the Canadian dollar against the US greenback. While crude has increased by nearly $8.00 US and spot prices also increased during this time, we caught a break with the Canadian dollar gaining six cents against its cousin. Spot prices for gasoline, for example, increased by close to 15 cents a US gallon but we saw a decrease because of the Canadian dollar closing against the US.”

Summer pricing to come
“My nearest projection for summer gasoline pricing is putting the low end of prices at $1.05 a litre by the last week of June, first week of July. Usually, we see prices spike sharply during and after the US Memorial day weekend, the traditional start of the summer driving season in the US. Paring prices this year is mainly due to a couple of factors, namely; gains on gasoline inventories, sharp increases in crude oil inventory and dropping consumer demand figures. All this could change if any of these factors change, like a pick-up in consumer demand, a drop in inventories, or any further production cut from OPEC. Keep in mind that we will also soon hear about the coming hurricane season when we will all hear traders use that threat to drive up pricing.”

Eye on Marine Atlantic
“Since Marine Atlantic removed fuel surcharges, they also promised to review them sometime in June and make their call as to the placement of further fuel surcharges based on any increase in the price of marine type fuels. So far this year, those numbers are taking the same direction downwards as most distillates and, while we still have another month or so to go before they make the decision of adding surcharges again, so far those prices wouldn’t justify a move at this time. We’re keeping a close watch on this one.

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For more information, contact;

George Murphy
Group researcher/Member
Consumer Group for Fair Gas Prices