Resource give-aways continue...
Welcome aboard Alberta!

See?

And you thought that the 1985 signing of the Atlantic Accord was bad, and that it was a bad thing for Newfoundlanders and Labradorians to be upset over our resources sailing away!

There's a pipeline construction project about to start in Alberta that will see almost 900,000 barrels of crude oil processed in Texas rather than inside Alberta. In context, making our offshore oil production a mere pittance against what Alberta has to export!

It's called the Keystone Project...

Canadians should be going off their heads,but there's hardly a whimper, except from the likes of some unions who are warning about the deal that would ship tons of bitumen to Texas for refining. It's just another classic example of crude oil resources going south of the border to power Uncle Sam's economy, rather than keep our own economy powered with secondary processing jobs.

The sale of this country's resources continues, and as reguards to resource giveaways, we at "gas and oil" would like to welcome aboard Alberta as being partly responsible for adding to Canada's energy shortages in the future!

On that "sour" note, I'll be in touch tomorrow evening on the trend in price changes for this coming Thursday!

Regards,

George

Enter the governing council!

Good news out of Libya this evening may prove to be good news for consumers down the road.

Tesoro Energy out of the United States have signed with the governing council in eastern Libya for the first shipment of crude oil to leave Libyan waters since the start of unrest there a few months ago.

Libya is a chief exporter of crude oil from North Africa, exporting almost 1.5 million barrels of oil per day, that is, before the "revolution" started there.

The deal is for an initial purchase of 1.2 million barrels.

Any added crude oil to the markets at this point should be just enough to mitigate any increases for a little bit.

We'll see what happens.

Story here.

George

Up and down in the markets

Gas prices down, but distillate fuels up

Media release

Conception Bay South, NL, June 07, 2011- Consumers in Newfoundland and Labrador will find evidence of the 'up and down' to the markets this week when the Public Utilities Board adjusts prices this Thursday morning. That's from George Murphy, group researcher with the Consumer Group for Fair Gas Prices.

"Numbers are reflective of what happened with inventories late last week when data showed a drop in distillate fuels and a gain for inventories of gasoline," Murphy said."It's been all over the map since, with no real sign of stability. Oddly enough, inventories of crude oil increased by 2.9 million barrels even though there was an increase in refinery production, reaching a full 86 per cent, the highest level in weeks."

The numbers

"Heating and stove oils show upwards movement by 1.03 cents a litre. Diesel should increase by 1.5 cents. That is probably in line with inventory reports that showed a drop in distillate inventories by close on a million barrels. Someone is burning a lot of distillate fuel out there, most likely diesel fuel."

"Gasoline is showing the opposite: down by 2.6 cents a litre. Gasoline inventories were up last week by 2.6 million barrels for the week, probably the reason behind the drop in prices.

Oil prices may drop

There are also strong signs that OPEC member countries are getting ready to ramp up production, citing the need to keep the world economy moving in the face of slow, or even falling economic recovery. The group of producers led by Saudi Arabia, are presently meeting in Vienna.The talk is about adding 1.5 million barrels of crude oil per day to present production quotas. If that happens, it could be a plus to helping prices drop. The Saudis are concerned that high oil prices will further damage world economic recovery and they're pushing fellow OPEC members to help drop the price of oil to a more 'manageable' seventy to eighty dollars US a barrel from it's present level of around the hundred US level it presently sits at.

But there is another cause for concern.

"If the group does raise quotas, then that leaves spare refinery capacity at a minimum while Libyan production is off-line with ongoing political turmoil. Libyan production matches that of the proposed OPEC production increase: 1.5 million barrels per day. The difference here is in the interpretation of the news here. Investing agencies are concerned with losing capacity when consumers are saying that capacity is there. Just not online at this moment. I believe we're close to a retreat in prices, especially if demand for gasoline and distillate fuels stagnates."

"We'll wait and see."

-30-

For more information, contact;

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

*Just a footnote to this story really. demand for gasoline products this past week was recorded at 1.3% lower than the same recording period for last year. That's pretty important to see at this time, and another sign of probably what's coming.