Update #2

Oil trades higher
Consumers to take a hit this coming Thursday morning

Media release

Conception Bay South, NL, March 9, 2009- Consumers in Newfoundland and Labrador will see another increase in gasoline prices this coming Thursday as oil prices and their related commodities continue to trade upwards, at least that’s according to George Murphy, group researcher for the Consumer Group for Fair Gas Prices.

“Gasoline has taken a big jump upwards over the last two weeks, buoyed mainly by an increase in demand and the sudden fall in the Canadian dollar. We’ve lost six cents against the US greenback in the last two weeks and the sudden fall in the dollar should be a continuing concern in the determination of fuel prices. We’ve lost an added two cents a litre as a result of the dollar difference there.

What consumers will see
“I expect gasoline prices to increase by four cents a litre this Thursday with stove oils increasing by just 12/100ths of a cent and diesel to also increase by close on 3/10ths of a cent. The stove oil number may be reflective of little or no change in heating oil prices as well. All these numbers are based on 13 out of a possible 14 days data. The price increase will be less than a seven cent a litre increase in the Halifax area but reflective of continuing market volatility.

Markets show continuing volatility
“If you’ve been watching the markets, you probably have also noted the price swings in everything from oil to our dollar. There’s a continuing level of distrust in the markets based on the lack of any positive economic news. Unemployment numbers are continuing to increase but, that’s not reflective in the oil numbers. You’d expect to see a drop in consumer demand but, that’s not happening now. There’s some complacency returning to what consumers see as a ‘lower price’. We’ve also witnessed a draw-down in crude inventory from the strategic supply at Cushing, Oklahoma where WTI is mostly bargained and priced for.

Work for the wood fibre industry?
“I’m surprised at any response that has been given as regards to the major closures and shut-downs in the wood fibre industries in the province. Here, we have a renewable resource that has seen concentration in making paper rather than the province looking at the other alternative in the troubled industry. I believe that the time has come for the province to carry out a bold experiment in the manufacture of methanol/ethanol from wood fibre . Here we have a viable source of supply for another aspect of the petrochemical industry and it has not been looked at as of yet. While ethanol is derived from other sources like corn and wheat, we can help stymie any increases in food costs by helping change where we get oxygenates from. Oxygenates are used in gasolines and other fuels to help with more complete burning of fossil fuels and they’re less harmful to the environment. If we can show that it would be easy to manufacture here, we have that chance of getting into another aspect of the petroleum industry rather than the traditional and we’d also help put unemployed lumber industry workers back to work.

Market highlights

* The Canadian dollar loses almost six cents against its US counterpart resulting in an added loss to consumers of close on two cents a litre as a result.
* Consumer demand for gasoline increases by just over two per cent over last years figures for the same timeframe last year.
* Refinery capacity still recorded as low at just over 83% utilization, that’s just up slightly against last week’s figure of 81%.
* Oil prices continued to climb from $38.96 US on February 24th to today’s $47.07 US a barrel at market close while, gasoline spot prices rose an average of 41.28 cents a litre from 38.88 cents a litre at the last price setting.
* Markets are also playing on fears that OPEC will meet on March 15th coming to institute another cut in production by an added one million barrels per day.
* As reported by the United States Energy Information Administration last week, gasoline shows just a marginal increase of 200 thousand barrels of added inventory from the week previous.
* A draw-down in crude oil inventories last week helped oil prices to increase although oil inventories were recorded at almost 45 million barrels over the same timeframe last year. Distillate inventories also showed a marked increase as a result of drops in demand of diesel, jet fuels and heating oils. The drop in jet fuel demand is recorded at just over 15 per cent below last year’s levels for the same timeframe.
-30-

For more information, contact;

George Murphy
Group researcher/Member
gasprices@hotmail.com

Gas prices to take the hit this week

Update #1

Here's a quick synopsis on what I have so far this regulation period, with two more business days to go:

• Stove oils show a modest increase of just 11/100ths of a cent. Heating oils should go that same direction with very little change at the heating oil truck.
• Diesel shows just 2/10ths of a cent increase, however...
• Gasoline shows an added four cents a litre at the pumps.

Keep in mind that there are two days to go before I have the final numbers, but either way, look for gasoline to be the only fuel to take the big hit this week.

I'll be in touch Tuesday eveening with the final numbers!

George

Numbers don't show interruption, but...

I've been getting a few emails from you all enquiring about the latest numbers I have.

In short, I don't have numbers that would warrant for any fuel interruption at this time, but that doesn't mean that the Public Utilities Board doesn't have them, if that makes any sense.

Here's what I have so far for this period, in which there has been an awful lot of volatility in the markets caused chiefly by the grief the Canadian dollar is experiencing against the US greenback.

• Stove oils show an allowable .31 cents a litre increase from the current price. In other words, just slightly up about 3/10ths of a cent. That may be pointing the way of heating oils.
• Diesel shows an allowable of .47 cents a litre, just a little less than a half cent a litre up at the pumps.
• Gasoline shows an allowable increase of 3.61 plus taxes, a rough 4.1 cents a litre at the pumps. The interrupter formula works whenever there is a four cent a litre disparity in prices (before taxes). My allowable margin for error calls for a difference of 3/10ths of a cent when I take a measurement.In other words, I'm about a tenth of a cent out from what could happen.

There's a small difference here that I can't account for in the numbers. I really don't know what the PUB has in the numbers but, I do know two things: that there was an awful lot of turmoil at the start of this session that MAY have been picked up by the board and not by myself. I can't say that there is not going to be an increase in gasoline pricing this Thursday, but, then again, I really can't say that there will be either. Secondly, the drop in the dollar has cost the consumer almost two cents a litre (taxes in) when compared to last Wednesday's spot price on the markets. In turn, the Canadian dollar has lost almost four cents against the US dollar this past week.

I think I'll be filling up on Wednesday night just in case...

Hope this helps?

Regards,

George

Forever misunderstood

I just finished reading the rst of the comments section of todays Telegram. The story quotes my last release on the coming drop in most fuel prices. It wasn't the story that got to me, it was the comments by some clampitts after it...

Sometimes it's like beating my head off the wall...

Sometimes there's more sense in a bag of rocks...

I don't know how many times I have to state it categorically that I am not getting paid by anyone for doing what I am doing and there's just no sense in trying to explain why I carry on with what I do. My pay comes in the form of the savings that I make in the run of a year that stays in my pocket because I do track the price changes...

I just do it...

Agaian, I find that there are the doubting Thomas's out there that think I get paid by Danny for what I do. There are those out there that think I am the regulator, but I'm not!

Jesus, I feel like Brian in the Monty Python movie, The Life of Brian!

I am a regular guy who drives a taxi for a living and I track the price of gas and other fuels for the sake of myself and for family. That's where the big interest came from, after someone in the higher eshelons of a Big Oil company told me that it was basically none of my busines why the price of fuel is the price it is on any given day.

I disagreed with him whole heartedly at the time and i still do. The price of fuels is everyone's business and it'll continue to be mine as long as I have my drivers licence.

It bugs me to no ends the fact that someone can do something for nothing and people are held suspect for doing it.

Maybe it's time to take the show on the road and have a good chat with everyone about what I'm at and how I do it.

Think I could get some kind of grant from Big Oil for that?...

Regards,

George

Price drops on the way
Markets show another downturn

Media release

Conception Bay South, NL, February 24, 2009- The markets have been showing another sell-off as the economy slowly sinks and that will show another break to consumers later this week as all fuel prices will drop on Thursday morning, that’s the prediction coming this week from the Consumer Group for Fair Gas Prices.

What the numbers say
“All the data is in and it looks like we’re in for a break on petroleum products come this Thursday morning. Fourteen days of data show that diesel will drop by 5.0 cents per litre, gasoline to drop by 2.8 cents a litre and stove oils to drop by 3.99 cents per litre,” said George Murphy, group researcher with the group.

“The stove oil number points to what is on the way for heating oil and with that fuels jet fuel component showing a drop of up to 15 per cent in demand, I expect heating oil to take a sharper drop than the one predicted for stove oils. Heating oils should be closer to a nickel down as a result.

Outlook on diesel prices
Some clues are beginning to emerge from the markets in recent days on what could be happening with diesel prices in the long term and it should prove to be good news for a lot of users of the fuel. The last few days have shown some moves by the European Union against manufacturers of bio-diesel. Because the product is manufactured with huge subsidies by the US government, the EU is talking about placing tariffs on the product to keep it away from EU products. The EU views it as a subsidized product and that gives it an unfair advantage. If that happens, US inventories of distillate will only increase and that means dropping prices.

-30-

For more information, contact;

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

Numbers still down...

Just a quick update...

One more day of data to attain and here's what I have up to now:

• Stove oils now show 3.89 cents a litre down. That's the way that heating oil will go, but heating oils should show more down than that number. Jet fuel, which is part of the winter heating oil mix, is showing a strong drop in demand. I'm looking at heating oils to be closer to five cents a litre down when all is said and done.
• Diesel shows 4.9 cents a litre down, and...
• Gasoline shows 2.5 cents down.

Again, I will post here later tomorrow night with the final numbers to come for Thursday. It might be one more day to come but, there's plenty enough data to call the shot on all fuels dropping this Thursday morning.

Regards,

George

Numbers, numbers, I got the numbers!

Just a quick update on what's happening out there on the markets as I'm still tracking drops to all fuels with just two more days of data to get my hands on.

• Stove oils down by 3.71 cents a litre so far.
• The heating oil number is part jet fuel. With jet fuel demand slipping to 15 per cent, I expect to see the heating oil number to drop more than the 3.71 stove oil number. Look for it to exced well above four cents a litre-Down!
• Diesel numbers show 4.7 cents a litre down, and...
• Gasoline shows 2.1 cents a litre down.

I'll be back around to post the final numbers again sometime Tuesday evening, hopefully in time for all to make their purchasing decisions based on what I have. Either way, the distillate prices are taking a pounding in the consumers favour.

Not bad to see them drop over the course of the winter!

Regards,

George

No price changes this week

Finally...

After a short spike in prices at the start of this pricing session, due mainly to draw-downs on inventories, it seems that things are starting to loosen up on the markets again.

Prices are dropping for the first time in several weeks it seems. March trading for WTI is dropping and so is the cost of crude acquisition.

While I don't have numbers that show interruption to fuel pricing, stove oils are showing 2.42 cents a litre down. That's probably a good indicator of where prices will be next week. The kicker here is that I can't get a read on jet fuel, so there is a possibility that heating oils are down even more, possibly within interruption territory, although I have no way to confirm that as being so.

Diesel fuels are also pointing down further, almost 3.3 cents a litre.

Gasoline experienced the biggest spike at the start of this session but, after today's market move downwards, now shows a"break even".

No change at all.

I'm expecting gasoline to trade further down for the next week, based simply on the fact that the next inventory data available on Wednesday should show an increase in stocks. Gasoline itself took a nine cent a litre hit on the markets today based on the ever-worsening economic news. Again this week, I expect to see a drop in demand, unlike last week that saw consumption equal to the same time period last year, and that should figure heavy in the markets again.

The above picture (AP photo), an overhead shot from New Jersey, says it all I think!

Or, check out this image compliments of Google earth: http://maps.google.ca/maps?near=port+newark&q=inventory,cars,delivery,port+newark,honda&f=p&rl=1&ie=UTF8&ll=40.657889,-74.010478&spn=0.002193,0.00412&t=h&z=18

For some reason, I think there's going to be some great deals on some models of cars in the coming weeks, particularly if you can wait for the next model year to come out!

Of course, anything can happen between now and next Tuesday when I have the final numbers in, so don't take all this as being "bible".

But, we can pray in the meantime!

I'll be in touch!

Regards,

George

Price changes on the way for Thursday
Distillate demand drops, gasoline increases

Media release

Conception Bay South, NL, February 10, 2009- Consumers in Newfoundland and Labrador will, once again, experience a drop in distillate prices while gasoline is projected to see a small increase at the pumps this coming Thursday, that’s according to George Murphy, group researcher with the Consumer Group for Fair Gas Prices.

Heating, stove oils and diesel to drop
“All the numbers are in and, by all appearances, those fuels connected with the distillate group, namely diesel, heating and stove oils, all will experience drops in pricing. Diesel fuel is projected to drop by 3.0 cents per litre while stove oils are projected to fall close to the same amount, 2.95 cents a litre. The stove oil number may be the harbinger of things to come with heating oils as well as jet fuel demand is also being impacted on the world markets so, that number for heating oils may in fact be slightly more than what we have for stove oils”, said Murphy.

Gasoline prices up slightly
“In the meantime, gasoline is expected to increase slightly by 3.3 cents per litre. Over the past couple of weeks, we’ve seen the oil industry talking about the possibility of a refiner strike that could affect upwards of 30 thousand workers directly. We’ve also seen a slight drop in the builds of inventories in recent weeks. Even though the number shows very modest increases in inventory, the fact is that refiners are concentrating more on distillate output rather than gasoline and that has helped to support prices. Refined product supplied to the markets is down almost three per cent from last years numbers. Gasoline demand is a bare ½ a percentage point below last year for the same time frame as a result. Even though gasoline production rose slightly against the week previous, refiner capacity is still well below peak production rates, measuring just over 83 per cent.

Crude message in oil
“Crude oil supplies have increased in recent weeks, just one reason why we’ve seen the price of raw crude drop. There’s plenty of it out there and it seems that OPEC cuts have not impacted supply greatly. From the look of things, I believe that the economy is being hit harder than we think. This may be true evidence of the smack we are about to take economically and real troublesome signs of how deep the recession is going to be. We are now into the March contracts for delivery and we haven’t seen the affects of OPEC cuts as of yet. The question is, will we?

Residual fuels and Marine Atlantic
Residual fuel oil, a type of fuel used for marine applications, prices have reached March of 2005 levels and have been experiencing some form of steady pricing in the markets. This should be enough time now for Marine Atlantic to announce its next moves on the remaining nine per cent fuel surcharge that was put on for crossings made by the shipping line. These fuel surcharges were placed in 2008 and previously in 2007 when the fuel price was high and not at 2005 levels. It’s now time for Marine Atlantic to deal with the remainder of the fuel surcharges on crossings of the Gulf. It is also time for the federal government to step in and absorb any future increases in fuel costs that add an artificial inflation rate to goods coming into Newfoundland and Labrador. The people of the province were told through the media by Marine Atlantic officials that the remainder of the fuel surcharge would be dealt with in January. They’re late with it.


-30-

For more information, contact;

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

One number up, the rest of them down

With one more day of data to attain (13 out of 14 days on hand), we can almost call the final shot on what will happen this week with pricing on petroleum products. These aren't final numbers, but they are close to what the actual may turn out like.

I'll have the final numbers tomorrow night for sure but, needless to say, I'm sure there will be some sort of a media splash to get the word out to everyone!

• Heating and stove oils to drop by 2.76 cents a litre. Remember that the heating number may be off because of the use of jet fuel as an antifreeze agent, a number for which we just can't get a hold of. Either way, down is the word here as there has been a drop in distillates over the last few weeks.
• Diesel fuel to drop by 2.8 cents a litre. With all the economic damage out there, there's a little less tendency to use those tractor trailers to ship goods and demand here has been impacted as a result.
• Gasoline shows an increase of 3.3 cents a litre. More on this one tomorrow night, but it doesn't look good in the face of refineries matching decreasing production with falling demand. I'm thinking that they're trying to strike a balance between the two factors and they're hoping for a drop in inventories as a result of the moves. That's part reason why gasoline is still being 'supported". That may change soon, if the economy has any say in the matter...

I'll be by with my final numbers tomorrow night, sometime after 8:00 P.M!

Regards,

George

No interruption this week!

Numbers confirm that there will be NO fuel price interruption this week unless there's an unknown factor out there like the jet fuel number. Even then, distillate numbers are pointing down, so if they are to drop, then it will be with heating fuels which has a 25% #2 fuel and 75% jet fuel mix.

I keep looking for a jet fuel number to use so I can figure out the winter mix but, alas! To no avail!

Numbers so far this period show:

*Heating/stove oils down by 2.0 cents a litre.
*Gasoline up by 2.6 cents a litre, and
*Diesel down by 1.9 cents a litre.

We have another week of market activity before these numbers are finalised so, let this be just a small pic of what is happening out there. These are not the final numbers yet!

Regards,

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

Refinery workers keep talks on

Representatives of the United Steelworkers Union that handle upwards of 30,000 refinery workers have kept the lines of communication open in a bid to prevent a strike against refinery owners today, that's according to several news sources. The workers previous contract expired yesterday.

Oil and it's related, refined commodities took a nose-dive over the days trading, relieving some of the upwards market pressures on the price of gasolines and heating/stove oils.

Numbers still show no interrupt scenario developing for heating,stove oils or diesels. Gasoline numbers are still showing an added 2.5 cents a litre up with todays news. Today was also the first day in a week that the spot price dropped below that of the last week price-setting.

Four cents is needed for interruption to occur and that has to average over seven days of data.

We'll have the final word on that in tomorrow nights posting but, i can say that gasoline is going to have to trade up substantially for there to be an interruption scenario to kick in now.

Regards,

George

AIMS releases their study on regulated markets
...and how about something constructive for a change?

Media release

Conception Bay South, NL, February 02, 2009- The Atlantic Institute for Market Studies has released a report on what regulated markets are costing consumers in Atlantic Canada and George Murphy of the Consumer Group for Fair Gas Prices is hearing things in the report that he has heard before. He’s just waiting on the AIMS Group to come out with something constructive.

“The AIMS group came out with a report this morning that says regulation has cost the taxpayer in Newfoundland and Labrador several million dollars. If they had done their research, the AIMS group would have found that regulation costs the consumer of the province less than a half million bucks a year and amounts to .0007 cents a litre at the pumps and not the estimated 1.5 cents that the group used to construct its report”, said the researcher for the group.

“It also uses the Canadian Association of Petroleum Producers (CPPI) as one of its sources of its report. The CPPI is a representative group of the oil companies so, I have to question the use of such information that AIMS has used. It’s not the first time they’ve spouted off on the costs of regulation but, we have yet to hear the constructive arguments from them on what to do to get some free competition going in the province- the chief reason why we have regulation in the first place. They also don’t advocate the dropping of some of the taxation component on gasoline that helps elevate the price at the pumps.

“It is important to remember that regulation in Newfoundland and Labrador regulates the maximum price that any product can be sold for. There is nothing to stop any company from selling their product for less than that and that’s where the consumer loses. Besides the immediate CBS area, the companies have always failed to sell gasoline below the regulated minimum set by the PUB. Why? Can the Atlantic Institute for Market Studies tell us that or are they tainted by the influences of the same people they are getting their information from? Are they saying that Big Oil should be the final arbiter in the setting of pricing?

“Can the AIMS group give us something we can use? Who is paying the tab on this latest ‘scoop’? Toronto prices are low because of a free market system called competition that still exists in the area. Small mom and pop operations still drop gasoline prices because there is a margin to do so of some fourteen cents a litre and big mainstream companies are forced to compete with them. The age of the small mom and pop operation in Newfoundland and Labrador died a long time ago and competition is dying in a lot of other areas of the country where mom and pop operations are being forced from the markets. That’s one reason why the province was forced to enact legislation back in 2001 to regulate the market. If the AIMS group had done its research, it would have had several explainers as to why we ended up with regulation in the first place. This release of theirs is flawed and also misinforms the public.”

“I would encourage the AIMS group to look at several issues pertaining to petroleum pricing itself.
*How does a market, where competition has been destroyed, restore it?
*Address taxation issues.
*Use different and argumentative sources. We had no call from the AIMS group so, we don’t know who was called otherwise, and we would have given them good arguments why regulation is in place.
*Why doesn’t the AIMS group study the effects of “reciprocal sales arrangements’ on markets where there is basically one or two sources of supply?
*Why does the AIMS group not lobby for changes to the Competition Act?


-30-

For more information, contact;

George Murphy’
Group researcher/Member
Consumer Group for Fair Gas Pricesgasprices@hotmail.com

US refiners may strike.

Be warned!

The next increase in gasoline pricing just may have been brought by a variety of unions and companies in the good old USA.

Upwards of 24,000 refinery and maintenance workers are set to strike as of midnight tonight as contracts and reprieves run out. Some refineries are already preparing for shut-down while others will try to maintain production with replacement workers and management personnel.

If they do strike, some 1.8 million barrels a day of gasoline production may be disrupted and could cause a draw-down on the recent builds in gasoline inventory.

Draw-downs mean price increases to the consumer as the shortage of product gets a little on the scarce side. Depending on how long the strike lasts, we could see prices increase to over a buck a litre again-and soon.

So far this week, on the possible strike news, gasoline is averaging a rough 3.1 cents a litre up from the last price setting just last week. Four cents a litre is needed for that possibility to happen. If gasoline trades high or roughly the same as it did on Friday, then we can expect the interrupter formula to kick in later this week. Other markets have already seen increases in prices at the pump based on last week's activities on the strike matter.

Here in the province, we're not as likely to dodge the impacts of a US refiner strike either, even though we're miles away. Awww, the benefits of being part of the world economy and looking after Uncle Sam rather than your own, wa??

You might want to keep an eye on the blog Tuesday night for an "official word" on that thought.

I might add that heating, stove oils and diesel do not show signs of interruption according to what I have on paper.

*Whew!*

I'll be in touch!

George

Forcing prices up

In a lesson on how to control pricing and in an effort to help control the latest decreases in oil pricing, US refiners hatched a plan: reduce refinery production of gasoline to stop the fall in prices.

So far, it appears that the plan may be working...

Even though crude oil appears to be lower than in days past, refinement of gasoline has been cut, refiner capacity dropping almost 3 per cent in the last week and that has led to a drop in available gasoline so much so, that today, inventories as reported by the US Energy Information Administration dropped by some 110, 000 barrels. That, combined with robust demand figures that show gasoline consumption averaged just 1.7 per cent below the same time last year, are two chief indicators of what could happen next.

If Big Oil is making a concerted move to reduce production, then it is only reasonable to assume that the plan to support domestic retail pricing in order to support future profits, is working. We may be a little negligent into our own reality of pricing, thinking that we're going to see low pricing for a while. It may very well be that in this case, where Big Oil has let it be known that they're not going to produce gasoline where there is plenty of inventory, we've all become a little too used to prices below a buck a litre.

Maybe it was wishful thinking that prices did fall and would stay down for some time...

The truth is, after today's news from the EIA, it may have been a fleeting dream to most and a stark reality at the pumps in the coming weeks, that gas below a buck a litre was all such wishful thinking after all. The ground has been set and the only factor in the markets that can affect Big Oil's latest move is a drop in demand or worsening economic news that will affect that demand.

No one wants worsening economic news but, are we, as consumers, prepared to cut back on our own needs and affect the demand numbers and help turn the tide back in the consumers favour again?

A buck a litre could be home to stay sooner again than what we think...

Regards,

George

Not much change in the numbers

Media release

Conception Bay South, NL, January 27, 2009- Consumers in the province will hardly notice the changes when the PUB moves to set prices this coming Thursday, but that’s not necessarily a bad thing.

“The numbers, with all the data in now, are nothing substantial and that’s not a bad thing. We’d like to see prices dropping and, although they’re not dropping substantially, gasoline will be dropping close to 1.1 cents a litre. After today’s market activity along with all the bad economic news, there will likely be a gradual slide further downwards in pricing over the next few days for all fuels.

“Heating and stove oils are predicted to see an added 8/10ths onto current prices but it’s not expected that the fuels will see another increase in the coming weeks. Even though we’re deep into the demand season for these types of fuels, they are being mitigated by the other fuel I the distillate group of fuels, diesel, that shows a slight drop of 7/10ths of a cent. With the worsening economic news and anticipated inventory builds, I expect to start to see future declines in all petroleum products in the next couple of weeks.

No budget breaks
“Consumers of fossil fuels, who have been the singular positive influence in any economic recovery, failed to see any substantive tax breaks that could have meant something to any economic recovery. The recent drop in fuel prices from year-ago levels has been the singular largest factor in giving consumers back some disposable income and we should have seen more tax relief to consumers as an emergency measure in today’s budget. We’re still subject to taxation on heat and major transport fuels and we’re still paying artificially high prices on consumer items as a result.

“We also didn’t hear anything as regards to government lifting the remaining fuel surcharge off Marine Atlantic rates. Again, we’re still seeing the remaining nine per cent fuel surcharge added to consumable goods into the province and that adds an artificial inflation rate onto goods and services into Newfoundland and Labrador. Marine Atlantic is our highway. Where is the infrastructure money for our ‘highway’ to Nova Scotia?

Inventories remain high
“Inventories of all fossil fuels remain high in spite of the news from some oil companies that they will begin to reduce refinement of products, particularly gasoline. Inventories climbed again last week for the eighth week in a row and another build in crude stocks along with refined product is expected for tomorrow. I fully expect that, if the inventory reports are positive tomorrow, that we’ll be in line to witness the markets come back to economic reality on oil and that we’ll witness further declines in oil pricing.”

-30-

For more information, contact;

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

Not much change...

Hey, Big Oil. Can you spare us a dime?

Six of seven days of data for gasoline and 13 days worth of the same for both heating/stove oils and diesel, all show minimal changes to come this Thursday.

One more day to finally call the shot on the changes, but here's what I have so far:

• Gasoline shows a drop of close on a penny a litre.
• Heating/stove oils are up by 1.06 cents a litre, and..
• Diesel to drop by 1.7 a litre.

We'll have a full run-down on the final tally tomorrow night. Drop in and see me then!

Regards for now,

George

Update #2

Commodities prices spike
Expect interruption to pricing Thursday night

Media release

Conception Bay South, NL, January 20, 2009- Oil prices may have lost some of its steam but the price of it’s related, refined commodities like gasoline continues to climb. Again this Thursday, the Petroleum Pricing Office may very well be forced to use the interrupter formula to adjust prices upwards as a result.

“According to our numbers, prices may rise by as much as 6.1 cents a litre in spite of the recent drop in oil prices. Traders are continuing to bet that demand for refined products will pick up and that’s helping to keep the spot price of gasoline elevated,” said George Murphy, group researcher with the Consumer Group for Fair Gas Prices. “Six days out of seven days data needed, are showing a marked increase in spot prices against the backdrop of oil over the last week.”

“Other markets have seen a steady increase in gasoline pricing as well, some areas by as much as what we’re expecting for Thursday morning. We don’t expect immediate movement on heating, stove oils or diesels but those numbers will probably have increases to retail pricing when prices are adjusted again next week. Right now, they don’t meet the criteria for interruption as gasoline.

“If there is any glaring evidence that traders and investors are responsible, then this is it. In the face of ugly economic news and falling demand, the trader and investor continues to help support refined product prices and that is only helping to thwart any possibility of economic recovery. Until the numbers accent the reality of the world economy, consumers will always feel that they are being taken for a ride as they have been from the last couple of weeks energy trading markets.”

-30-

For more information, contact;

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

Update #1

Lost for words...

Prices may increase substantially by Thursday

Believe it?...

I don't either, but it certainly looks like gas prices will spike next week and I simply don't have a valid explaination as to "why".

All the indicators like inventory and consumption, are down and the economic news doesn't allow for the price of oil to sustain itself. There simply isn't reason to explain it when we've all seen oil drop from the mid 40's to the current $36 US a barrel..

All I figure is that some investors out there are putting all their hopes that demand will eventually pick up and that they're hedging for the future. A lot of people must be. I have to note as well that our local business channel here, BNN, has also started turning it's eyes towards the March buying contracts and they've given up on carrying daily oil pricing, focusing instead on the "months ahead".

Seems everyone is getting in on the act...

Anyways, pricing so far shows a possible spike in gasoline towards 6.1 cents a litre up, that's with five of seven days data recorded. You need a full seven days before the interrupter formula kicks in.

Be warned!...It's coming!

Regards,

George

Oil trades lower, commodities trade steady
No big drops predicted in spite of lower oil

Media release

Conception Bay South, NL, January 13, 2009- Oil may be trading lower but that doesn’t mean that its related commodities are trading lower too. Consumers in Newfoundland and Labrador shouldn’t expect big changes to pricing when pricing is set this week by the provinces’ Public Utilities Board.

“The numbers are down only slightly in spite of the news from the markets that shows declining demand for most fuel products. Heating and stove oils are expected to see a bare 12/100ths down. Gasoline is expected to drop by close on a half cent and diesel is expected to drop by close on three tenths of a cent,” said George Murphy of the Consumer Group for Fair Gas Prices.

“The only thing I can figure here is that there was a heavy investment in the refined commodity rather than an investment in oil, but that doesn’t begin to reflect the reality of the markets. In the face of dropping demand and bad economic news, the price for the refined commodity traded the same all week. The realities of builds in inventory were outweighed here by the talk of refiners cutting back on refining of crude oil products. They are trying to strike the balance between market need and demand factors. Some call it capitalism; I call it direct market manipulation.

“Last week saw a heavy build in crude oil inventory and that didn’t even factor into the markets as it did the week previous. Add to that the fact that all major refined products all saw inventories increase and you really have to ask yourself why these prices aren’t droping more than what’s being predicted. It’s a little ludicrous when we see the factors of supply and demand not playing into the markets rather than becoming key factors in price drops as they have in other weeks.”

-30-

For more information, contact;

George Murphy

Group researcher/Member

Consumer Group for Fair Gas Prices

gasprices@hotmail.com

Update #1

Numbers don't show anything, really...

I'm often asked whether prices for petroleum products are fairly priced and, this week is no different than any other, but with one glaring exception.

While the numbers don't show major changes in either heating and stove oils (-4/10ths), diesels

(-6/10ths) and for gasoline (-1.2), we can look back on the markets and take a quick look of why prices will hardly be moving this time around. What you figure you'd be looking at is an exact carbon copy of the performance in the markets over the last three weeks.

Not so, even though the movement of crude probably justifies a larger change in the numbers than what we're expecting. What is distinctly noticeable is the amount of risk that some traders have taken all in the vain hope that OPEC cuts will be far-reaching and that inventory reports will start to show deceases in refined product as refineries are beginning to cut back on production.

Justifiably so? If I were an owner of a refinery, that is. I'd be a little concerned about the falling price. That's why we're hearing a little bit more on some refineries cutting back on production, particularly over the last week or so, and that is the difference between this week's numbers and those of two weeks ago.

If you attempt to limit supply, then prices are sure to either steady out if not increase.

Ill post my final numbers here later tonight as to what to expect. Right now, with six days out of seven days worth of data, there's not much there...

Regards,

George

Numbers confirm prices will rise
Consumers to see an increase in pricing Thursday morning

Media release

Conception Bay South, NL, January 6, 2009- Consumers in Newfoundland and Labrador will experience something they haven’t seen in a while, a price increase to most petroleum products. All indicators point to the Public Utilities Board using its interruption formula to adjust prices this Thursday morning.

“All the numbers are in and they’re not good. As of Tuesday’s market close, consumers in the province will likely see an added 5.94 cents on heating and stove oils, 6.8 cents a litre up on gasoline and 8.0 cents a litre up on diesel fuel”, said George Murphy, group researcher with the Consumer Group for Fair Gas Prices.

“This is a substantial increase caused by market investors playing with the same factors we saw in the run-up in crude oil prices a few years back. We’ve been told for a long time now, that supply disruption concerns have always had a built-in price factor. We’re also seeing investors doing exactly what caused the world economic problem as well; investing in oil without regard for the damage high oil pricing can cause the world economy. They have literally removed some disposable income from the pockets of consumers everywhere.

“We’re seeing them play with OPEC cuts and making bets that they’ll stick and cause a shortage of crude in the markets while we haven’t seen the rest of the bad economic news. They’ve bet on a drop in supply when they should have been betting on a drop in consumer demand. Here’s hoping the investor loses his bet come February.”

-30-

For more information, contact;

George Murphy
Group researcher/Member
Consumer Group for Fair Gas Prices
gasprices@hotmail.com

Update #2
Interruption to pricing possible

Six days out of seven needed for interruption to pricing to occur now show an allowable 5.4 cent a litre increase to heating and stove oils on the way for Thursday morning.

Gasoline shows 6.5 cents and diesel shows an added 7.5 a litre at the pumps for Thursday as well.

All this is coming fast on market traders making bets that OPEC cuts will be adhered to by the 12 member nations in the group. Indonesia was a recent drop-out from the group.

More on how these numbres will look again late tomorrow night but, the writing is on the wall so, fill the oil tanks!

Regards,

George

Interruption to fuel pricing possible

Update #1

From the looks of things, the recent drop in fuel pricing here may have been short-lived.

All data in so far are indicative of the possible use of the interrupter formula by the PUB as of this Thursday. The recent trading of oil, moving from $39 US to Friday's $47 US also showed that refined commodity prices rose right along with the pace in oil.

Heating and stove oils so far, shows an allolwable five cent a litre increase while gasolines show 6.0 cents a litre.

Diesel is showing 7.1 cents a litre upwards.

Not surprising really. I expected that, as there's nothing left to invest in in the markets, the only thing investors have to rely on is good old energy use. I fully expect there to be give-and-take over the next few months.

See how long this one lasts...

We'll have more here on Tuesday night.

regards,

George

Happy New Year!
Pricing will be down on all petroleum products to start 2009

Media release

Conception Bay South, NL, December 31, 2008- Consumers in Newfoundland and Labrador can start off 2009 with cheaper prices for all fuel products measured as pricing is set to take another precipitous drop this Thursday, that’s according to George Murphy of the Consumer Group for Fair Gas Prices.

What consumers will see
“There’s not much change in the numbers from yesterday. Numbers still show heating and stove oil pricing will drop by 5.78 cents a litre, gasoline to drop by six cents and diesel down by 6.9 cents a litre. The news of this next round of decreases will be excellent for the consumer and, we hope that pricing will continue to drop into the New Year”, said Murphy.

Reasons for dropping prices
“Continuing worries over the economy, good inventory builds and dropping consumer demand for petroleum products have all played an active role in prices dropping this week. We’re hopeful that OPEC cuts will not take their full effect until late February which means that it will be too late to be of any worry to heating oil and stove oil users. Add to that, that if the bad economic news continues, OPEC cuts may have no effect at all in the near future. There simply won’t be a demand for crude oil as there won’t be anyone using it in a stagnant economy.

Historical numbers, if mine are right
“If my numbers are right and we see the six cent drop, we will see 79.2 cents a litre at the pumps. The last time gasoline prices were this cheap was back in July 2003 when gasoline was posted at 79.6 a litre. If my numbers are right with heating oil, we will be looking at pricing reflected of March 15, 2003 when the maximum allowable was posted at 62.67 cents a litre. For diesel, the last time I could find pricing this cheap was on February 15, 2003 when diesel sold for 89.5 a litre. It’s been simply a remarkable turnaround since September.”

Time to drop the nine per cent fuel surcharge
“Businesses in the province should start asking some serious questions about how they are charged fuel surcharges on incoming and out-going freight in the new year. Pricing for transportation fuels has come down quite a bit and they should investigate how much of a break these latest drops in fuel pricing should mean to their bottom line, especially with hard economic times waiting in the wings. Because the New Year is pretty much here, we also have to ask Marine Atlantic when we can expect another adjustment downwards to fuel surcharges to passengers and motor vehicle traffic. The final nine per cent fuel surcharge is yet to be dealt with and this is the month that Marine Atlantic was to top up the fuel tanks. Do they have a time-line they can share with the province on when we can expect the final adjustment to occur? The numbers for residual fuel oils, sometimes used for marine applications, have now bottomed close to March of 2005 levels, just two years before surcharges were first applied. It’s now time to remove the additional nine per cent fuel surcharge.”

-30-

For more information, contact;

George Murphy
Group researcher
Consumer Group for Fair Gas Prices

gasprices@hotmail.com

So, with oil up, prices will be up right?...

Wrong!

The last few days have been interesting ones with oil pricing but, hey, that's my fun game!...

Just a little note here and a little notice to some consumers and users of the "update" and the info I publish on the blog here. Numbers are still showing "down" on heating and stove oils (-5.8/Lt), gasoline (-5.9/Lt), and diesel (-7.0/Lt) with one more days worth of data to come.

The latest round of oil price increases are pure speculation on some traders parts as they play on the fact that there is a "possibility" of some kind of supply disruption resulting from the Gaza violence. Last week showed good inventory builds and that played itself through the later stages of last week as well as dropping demand figures. Traders are playing a dangerous game before the OPEC cuts take their full effect in February month so, I'm thinking that oil will drop later this week as investors go for some profit-taking. See if I'm right on that one later.

In the meantime, if I'm not and oil continues to trade higher on spec, then we may experience some small hiccup in pricing a couple of weeks down the road, unless the numbers warrant interruption by the PUB.

The word then?

After this week's drop in heating and stove oil prices, fill those oil tanks!

More on my final numbers late tomorrow night or early Wednesday morning. You might want to check the blog first before relying on your in-box as the mass mailing sometimes experiences delays of 24 hours or so.

Either way, pricing will be down this week, and all in time for New Years!

Regards,

George

****NOTE: I lost a good cheer-leader due to the acts of a drunken driver on December 26th who took the life of my fourty year old co-hort and friend. I just wish people learn to stop their foolish acts and it is to his memory that this update is dedicated.

Farewell friend, you will be sadly missed!

Prices still dropping

No interrupt this week means larger drop next week

Ok, so we missed out this week, but by the barest of margins. That doesn't mean we still won't see something good happen next week.

Nine days of data now show heating and stove oils dropping by 4.75 a litre, gasoline down by 4.7 cents a litre an diesel down by 5.7 cents.

Not bad, but it's just too bad we didn't see Big Oil willingly drop pricing ahead of when prices are to be set again next Thursday.

Nova Scotians will be looking at a price drop again this coming Friday, their regular timeframe for setting pricing.

Oh well...Keep holding off until then!

Merry Christmas to all!

Regards,

George

Early Christmas present?
Numbers still showing possible interruption

Media release

Conception Bay South, NL, December 23, 2008- Consumers in Newfoundland and Labrador may still find that some petroleum product prices dropped overnight this Wednesday, that’s if the numbers show anything.

“Last week we expressed the possibility that some petroleum prices may come down as early as Christmas morning. Some figures are still showing that possibility although, the numbers are real close. Heating and stove oils are showing 3.4 cents down but that number doesn’t reflect the performance of the jet fuel component which is an integral part of the heating oil mix. If those numbers are showing greater movement that those we have, then we are into interrupter formula territory. The problem? We can’t get a read on the jet fuel number which makes up 75 per cent of the heating oil mix. Consumers should take a wait and see approach if they can do it as, if nothing happens this week, we will definitely see downwards moves for next week on heating and stove oils,” said George Murphy of the consumer group.

“As for diesel fuels, those numbers are showing 4.6 cents a litre down, albeit, close to my margin for error. Again, if you are a diesel fuel user, try and hold off until after Wednesday in case there is movement. There is a definite move downwards for this fuel for next week, if interruption does not occur Thursday. Gasoline is showing 3.4 cents a litre down which is slightly outside the requirements for interruption. Again, if pricing here does not change, then consumers can expect a bigger decrease next week instead.

“On a consumer perspective, bad economic news, dropping demand and good builds in inventories of most petroleum products are good reasons that we will see a continuance of the slide in refined commodities. For now, one can hope that Santa Claus will be coming early again.”

-30-

For more information, contact;

George Murphy
Consumer Group for Fair Gas Prices

***NOTE: This one may be delivered to your in-box late as a result of my late posting. I had to work so, it wasn't possible to get the notice out in time for all. Sorry for any inconvenience this may have caused.

Possible Christmas present for distillate users coming.

Numbers already show we're in interrupt territory

Just a short notice to everyone who tunes in, and please pass the word around on this one.

Numbers are showing possible interruption to all distillate products that I monitor such as heating oils, stove oils and diesel fuels. Numbers there are on track, showing a nickel down on heating and stove oils as well as diesel fuels.

Numbers on gasoline are close, now showing over three cents a litre down, the opposite of what happened when pricing increased earlier this week.

If oil trades lower today, we may see a further effect on gasoline, pushing those numbers also into interrupt territory as well.

Tomorrow may very well prove to be the most important trading day this week as some face the prospect of profit taking after a contentious week on the markets. While bad economic news continues to pour from a broken world economy, oil is also facing the prospects of a complete price collapse after the failed round of OPEC cuts. It is quite possible that nothing can be done from preventing oil to reach as low as 1997 levels, that being $17 US a barrel when adjusted for inflation.

That's what certain energy traders get for producing (and betting on) documents predicting $150 a barrel oil in the first place.

Mom used to call it "getting your just desserts"...

I'll post here again later Sunday night just to let you know what data I have after five days rather than just the two I have now. Remember...Seven days needed for interruption to occur.

Regards,

George

Mid week rise in crude to cost consumers
Gasoline to increase, distillates to fall

Media release

Conception Bay South, NL, December 17, 2008- Consumers in Newfoundland and Labrador will experience a slight bump in gasoline prices this week when the Public Utilities Board moves to adjust prices this Thursday.

“The sudden rise of crude oil to near $48 US a barrel Thursday of last week also brought with it an increase in the basic cost price (spot) of gasoline and this is going to affect consumers to a degree. We would have hoped that prices would have kept falling but, bad news and speculation late last week from OPEC and the chance of a major production cut in the offing, both helped to increase spot prices to all fuels. However it is only gasoline pricing that will experience an increase, that amounting to 3.1 cents a litre at the pumps on Thursday”, said George Murphy of the Consumer Group for Fair Gas Prices.

“Numbers show the rapid rise in spot prices that began shortly after the huge adjustment down last week. We also expected to see a much larger drop in distillate prices carrying on from last week but the increase in spot prices mitigated that. Numbers are still showing down by 8/10ths of a cent for heating and stove oils and 1.3 cents a litre down for diesel fuel.

“Since the spike last week, I have recorded a steady decrease, albeit slow, that hopefully will translate into this increase in gasoline as being an anomaly in the petroleum markets. Considering that the markets are now speculating that any OPEC cuts will have no effect on oil pricing, we can hope that there will be further decreases to come for all fuels in the coming weeks. The economic news just keeps getting worse and that has helped to play into market traders fears of lowering demand for fuel products and those fears are slowly translating into fact.”

-30-

For more information, contact;

George Murphy
Group researcher
Consumer Group for Fair Gas Prices
gasprices@hotmail.com

Any comments?

If OPEC cuts production...

Here we go again...

At OPEC's next meeting on December 17th in Oran, it is widely expected that the oil group will institute one of the biggest production cuts that it has ever implemented. Not to be out-done, the group is also asking the wild card in the market, Russia, to meet an "obligation" to help the group put the brakes on the slide in oil prices.

While a distinct possibility that OPEC will bring in a major cut amounting to close to an expected 2 million barrels, I don't expect the Russians to follow suit with OPEC. Russia wants more customers for it's oil and, weaning their way out of any possible OPEC influence just might be the way for the Russians to gain some further world economic influence. Don't expect the Russians to follow suit even though they're just as badly in need of US currency as anyone else. There is a vested interest for the Russians not to follow OPEC's lead as there is to follow the price-fixing cartel.

So, what would the effect be on pricing if OPEC did close the door on some production?

To OPEC, there is no sense in allowing further export of a product that, right now, is in low demand. The danger to OPEC here is that oil will rise again and bring a renewed interest in oil fields that have a higher initial capital cost to them. In other words, keeping the price low would effectively keep other oil fields from being developed. If I were an OPEC member, there can be no doubt that I would attempt to sway fellow members into letting oil freely flow, at least at present levels, and help keep the price of oil low for the sake of keeping other projects off the radar.

Witness Alberta...

With major projects in the oil sands being shelved and workers heading back to their home provinces and countries, it would be a little inopportune for OPEC to help support the price and help keep the projects going. OPEC needs to get these workers out of Alberta and help keep Alberta from being a major supplier to Uncle Sam. It would be a very long re-start before any other fields open in the tar sands if OPEC simply waits the ebb-tide out. That's why it's not likely that Russia won't follow the OPEC lead; there's a chance for the country to gain more influence on oil sales to the US.

December 17th, we'll find out if OPEC will really pull the trigger...

But, if they do cut in the face of the most recent economic news, the markets simply haven't paid OPEC too much attention in the face of a prospect of a two million barrel per day cut. While oil has increased in value by about five bucks since last Thursday's price change, it has since fallen back by another three to sit at $44 bucks US. In other words, while we might see a slight hiccup in prices, it's not likely that OPEC is going to impact price until Russia joins in the fray and then, they both might have more to lose. There's a prediction out there from the International Energy Agency that says consumption of oil will be 500,000 barrels per day less as a result of the downturn in the world economy and they don't have the full scope of the economic damage yet. After all, after losing $103 US a barrel since the first week of July, does anyone?

********************

Six days out of seven show little change in heating/stove oils, just a bare cent down on diesel and a rough 2.9 up on gasoline. I'll have more concrete numbers later tonight so, look out for the press release then!

Regards,

George

Update #3:

An early Christmas present on the way
Consumers to see substantial drops in all petroleum products

Media release

Conception Bay South, NL, December 9, 2008- The numbers confirm it. Interruption to all fuel pricing will occur Wednesday night on heating and stove oils, gasoline and diesel fuels, and the drops there will be substantial, that’s if the numbers that the consumer Group for Fair Gas Prices have been tracking are any indication.

What consumers should expect
“According to the numbers, heating and stove oils will see a drop of 8.25 cents per litre while, gasoline will drop by close to 8.3 cents a litre. The real gift to the Newfoundland and Labrador economy may very well be for diesel as that fuel is projected to drop by a whopping 10.5 cents per litre after taxes are accounted for”, said George Murphy, group researcher for the consumer group.

“We can say fairly that, with the drop in diesel pricing, areas of the Newfoundland and Labrador economy should start to see the removal of some of the fuel surcharges that they were forced to pay for the movement of goods and services that affect the consumers in the province. Diesel prices have now dropped by almost 35 per cent against the peak prices paid in early July. Our fishing industry should be able to catch gains from cheaper transportation costs as well as the difference in the Canadian dollar against the US greenback as well.

“OPEC last week, failed to come to any agreement on any substantial cuts to production as overall demand for oil has dropped along with the ill performance of the world economy. There still lies a chance that OPEC will make some sort of drastic cut when they meet again on December 17th. Some gains in inventories have been realized in recent weeks except for last week, which showed the first draw-downs on available refined products in North America in some time. It is my belief that there is enough available inventory of heating and stove oil inventories to make it through the rest of the winter so, I don’t expect to see any substantial increase in heating and stove oil prices unless OPEC steps in to address world over-supply or demand for distillate fuels show a great increase. Any further drop in refiner capacity which was measured at just over 84 per cent, may also affect distillate supply. A drop in production wouldn’t be surprising if Big Oil knew it would help support the price of the refined product either.

Fuel surcharges
“As the busy Christmas travel season is about to start, consumers should be asking serious questions about the last remaining fuel surcharges on things like air travel and Marine Atlantic ferry rates. It should not be acceptable for Marine Atlantic to let fuel surcharges wait until January to be lifted when they place their orders for fuel at that time. They can easily place an order for fuel now and have the difference in fuel prices reflected back to the amount of inventory then on hand and adjust the surcharges accordingly. Why wait until January to bring relief to the consumer and industry who use the service?

NL Power should adjust pricing
“When will we hear from Newfoundland Power or the Public Utilities Board on any adjustments to electricity with the drop in crude oil prices? It’s about time we hear from them to find out what the consumer can expect to happen to electricity rates in the coming weeks. Businesses will be forced to pay an additional 50 cents an hour to wages and, I’m sure that they can use the savings from electricity rates to help defer the costs of higher minimum wages in these tough economic times. Consumers will also expect to see lower electricity rates to hand in hand with the heating relief program just introduced by the government.

Some crude facts
1) The last time spot prices were this low for heating and stove oils was recorded on September 19th, 2006 when spots hit a then record 48.95 cents a litre.
2) The last time spot prices for gasoline hit this low was on June 14, 2002 when the spot price was recorded at 30.22 cents per litre.
3) The last time crude oil traded close to yesterday’s close of $42.07 US was on July 28th, 2004 when it closed at $42.80 a barrel.

-30-

For more information, contact;

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

Still on track for a big drop in pricing

Update #2

Hi to all...

Six days data out of seven days needed for interruption to occur are now showing the following after todays trading:

1) Heating/stove oils to drop by 8.02 cents a litre.
2)Gasoline down by 8.1 cents a litre, and
3) Diesel down by 9.0 cents a litre.

While oil traded up almost $3.00 a barrel US, the Canadian dollar showed strength and picked up almost four cents against the US greenback. Even though spot prices picked up in value with extensive trading on the markets, the difference in the dollar against Friday's finish was enough to absorb any shock to refined commodity prices and the numbers failed to move when converted over to Canadian values.

I expect the prediction to hold after tomorrow's trading and for the interruption to pricing to happen this Thursday as predicted.

I'll be in touch with an official press release tomorrow night with all seven days of data and the final numbers then.

regards,

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

Interruption to pricing now likely

UPDATE: Looks like all fuels regulated under the guides of the Petroleum Pricing Office will face interruption this week coming. Here's a breakdown of what's likely to occur this Thursday.

You might want to spread the word on this one as the numbers are substantial here:

• Heating/stove oils show 8.0 cents a litre down so far.
• Gasoline shows 8.1 cents a litre down.
• Diesel shows almost 9.0 cents a litre down.

With two more days of information to come, I don't expect the numbers to change too greatly but, be warned that anything could happen out there in the markets and the data could change. They may even be greater than what I have here now.

Regards,

George

Complete collapse of oil prices coming?

Boon to consumers in Newfoundland and Labrador though...

If Merryl Lynch and Platt's are right, then the provincial treasury of Newfoundland and Labrador may not score the large surplus for this year that was expected for this fiscal year.

That's not the best of it...

According to figures from the EIA out of the US, we may have already reached the point where the provincial treasury may be grossly affected by the drop in crude prices. While there may still be a slight chance of balancing the expectations for this year, if the markets hold true, that we will be in recession for close on two years, then the royalties paid back to the province will almost be a pin-drop compared to this year. Twenty two gravity oil is trading at $37.76 a barrel while I have the break even at $36.63 for the budget to be affected. 34 Gravity oil unlike that of Hibernia, is now trading at close to $45 bucks a barrel. The finance department must be on the edge...

Wait for next year...

If the stories are true, it would underscore the estimate I had in July of possible $60 per barrel oil that I expected would happen if a recession hit, a recession that would be caused by excessive and artificially inflated energy pricing. What a kick in the teeth!

We're almost there...

Merryl Lynch is now reporting possible oil pricing of $25.00 US a barrel for West Texas Intermediate type crudes which, if the pattern follows, makes Brent type crudes, of which Newfoundland and Labrador crudes are priced, around $4 bucks less than that. A pittance in royalties could be on the way for the Newfoundland and Labrador treasury but, it could prove a boon to the consumer of gasoline and heating oils.

How low can consumer pricing go in Newfoundland and Labrador if that scenario were to happen?

How does 74 cents a litre grab you for gasoline and 41.5 cents a litre for heating/stove oils sound? (Depending on the retailer you buy off, mind you)...

One can only wish that prices go so low that we don't have to see the malls blocked with people trying to keep warm this year and one can only wish that we'd have no need for a heating rebate program as well.

Those last two realities may be closer than we think, that's if OPEC stays out of the mess in the markets, like the Russians are...

Keep the fingers crossed!

NOTE: In the meantime, I am also tracking some nice drops in all three groups of fuels I Measure. There is a possibility here that we could see interruption for gasoline, heating/stove oils and diesels for next week, so keep an eye out here Tuesday evening for any word on that.

Regards,

George

Prices keep dropping
Gasoline and heating oil prices to see further retreat

Media release

Conception Bay South, NL, December 2, 2008- Consumers in Newfoundland and Labrador will see prices for most petroleum products drop again this Thursday. Oil prices and its related refined commodity prices, continue their slide in the face of worsening economic news and the failure of OPEC to address a market oversupply.

“Prices for gasoline are expected to see another 3.2 cents a litre down this Thursday while heating and stove oils are expected to drop a further 4.2 cents a litre. That number may be slightly off the mark for winter heating oils as they are now subject to a winter heating blend of #2 and jet fuel but, it should be a good indicator of the direction pricing will be taking. Diesel fuels are expected to drop another 1.2 cents a litre”, said George Murphy of the Consumer Group for Fair Gas Prices.

“OPEC has so far, failed to address any over-supply of oil in the market as they did in the run-up to production cuts in the late 90’s. Their failure to cut back on production led to oil prices that hit near $11.00 US a barrel. It was only when oil hit rock bottom that OPEC instituted a round of cuts that saw oil prices rebound. If this is another scenario like this being played out, then there may be no end to the drop in oil prices and there could be some grave consequences to some aspects of the offshore oil industry. It may be good for the consumer however, and that is a positive thing that will also help motivate economic recovery. OPEC will have a regular meeting on December 17th that will, I believe, contain the news of further cuts to production to help stem the fall of oil prices but, it may be ‘too little, too late”.

“Inventory data out of the United States still shows good building of inventories of gasoline as consumer demand remains crimped by bad economic news. This is another week of gasoline inventory gain and only very slight inventory draws of distillate that still is supplying some means of support to heating oil and diesel prices. If inventory starts to build there, we could see further slippage in distillate pricing before the onset of winter.

“Interesting facts are apparent here at today’s price. Spot prices for gasoline are now almost 9 cents a litre cheaper than what they were on May 19th, 2005 while, heating oil prices were almost six cents a litre cheaper than today. Oil on that date was priced at $46.93 against yesterday’s close of $46.96 a US barrel. The retail gasoline price on that date was 99.9 a litre in the immediate St. John’s area. The last time we saw prices below 90 cents a litre at the pumps was the week of January 15th, 2005.”

-30-

For more information, contact;

George Murphy
Group researcher/Member
Consumer Group for Fair Gas Prices
gasprices@hotmail.com

Damned if you do...

Numbers showing down, but ...

In this case, it's just the opposite.

We were on track for a possible bout of 'interruption in pricing' particularly to gasoline pricing until yesterday's market trading and the fall in the U.S dollar agin steps in.

A sudden interest in the stock markets and interest in commodities as the US dollar started falling again, led to yesterday's increase in oil pricing and its related, refined commodities so, from the looks of things, there won't be interruption afterall. Seems that traders will try to take advantage of any situation in the news to try to recoup their losses. In this case, it's a combination of another massive US bailout of the banks and Barack Obama's appointment of his economic team as well that has met with some approval.

Some numbers are still showing "down" however, so, that's the good part. Gasoline and heating oils are still showing that trend for next week.

Either way you look at it, the guys and girls in the provinces' finance department must have breathed a collective sigh when prices increased today...

Consumers to see more breaks for petroleum products
Prices continue to slide, but…

Media release

Conception Bay South, NL, November 18, 2008 - Consumers in Newfoundland and Labrador will be seeing more breaks on pricing of petroleum products this week when pricing is set this Thursday but there should be more savings than what we are seeing at the pumps, that’s according to George Murphy, group researcher for the Consumer Group for Fair Gas Prices.

“Consumers should see another 4.0 to 4.2 cents per litre down on gasoline for the immediate St. John’s area. That will translate to a price of .89 cents a litre for the residents of Conception Bay South. Heating and stove oils are projected to drop by as much as 4.58 cents per litre and diesel fuels will drop close to 4.0 cents per litre this Thursday at midnight when pricing is adjusted by the provinces’ Public Utilities Board Petroleum Pricing Office.

Fuel surcharges should be dropping
“Mariner Atlantic instituted a round of fuel surcharges on passenger and auto traffic last June 12, 2008 on top of a 2 per cent fuel surcharge that was added in June of 2007. The numbers for residual oils are now 32 per cent of what they were back in March, 2008 when they hit their peak. It was in June of 2008 that we saw the additional 27.7 per cent fuel surcharge added based on those numbers. Residual oils reached a peak of $2.73 a US gallon but have since backed down to a rough 88 cents a US gallon. Why are we still paying the surcharge? This is adding to the hardship consumers and business is having in a hard economic time. It is time for Marine Atlantic to return pricing back to the June ’07 level as numbers have decreased to that point.

“As for the airlines, we have seen the price of jet fuel return to August ‘05 levels yet, we haven’t seen a substantial drop in the fuel surcharge on airline ticket fares. When are the airlines going to remove the surcharges they implemented and return ticket pricing back to ’05 levels? This is amounting to a huge financial rip-off to the consumer and business person who requires airline transportation. The airlines along with Marine Atlantic should immediately drop some of the fuel surcharges before the busy Christmas travel season. All these fuel surcharges at this minute add to an artificial inflation rate on consumers in the province and, indeed, to the rest of Canada.

OPEC’s next move
“OPEC is set to meet again at the end of November and I expect another attempt at reducing output by the group. The next regular meeting of the group is set for December 17, 2008 so, this meeting is bringing in the usual concerns of an oversupply in the markets. Consumers should not be surprised to see the group attempt to regain control of world oil supply and, I also predict another cut of close to 750,000 barrels of production.”

-30-

For more information, contact;

George Murphy
Group researcher/Member
Consumer Group for Fair Gas Prices
gasprices@hotmail.com

More drops in pricing on the way

Just to keep you up to date.

With two more days of data to attain, numbers are so far showing more drops to gasoline pricing as well as heating/stove oils and diesel fuels.

Numbers are showing a drop of almost four cents on stove and close to three cents on diesel. The stove oil numbers could be a good indicator of where heating oils will go. Once again, the heating oil mix includes a combination of 75% Jet and 25% number 2 just for the winter heating season and I have not been able to track down an accurate jet fuel number so, this number is more to be used as a rough guide as to the direction heating fuel will be going.

Gasoline is showing almost 3.5 down...

We'll let you all know again about what will come about around 9:30pm this Tuesday night when I'll have all the numbers in....

I'll be in touch...

Regards,

George

UPDATE:

As of Monday evening, I'm now showing definite drops across the board for all fuels.Gasoline shows 3.7 a litre down,heating/stove oils are 4.32 down and diesel down by 3.1 a litre.

I'll give the final numbers Tuesday night, around 9:30p.m......

Consumers to get another break at the pumps
Numbers show interruption to gasoline

Media release

Conception Bay South, NL, November 11, 2008- Consumers in Newfoundland and Labrador should see another break at the pumps this coming Thursday that should bring prices under a buck a litre in most areas of the province, that’s according to George Murphy of the Consumer Group for Fair Gas prices.

“Oil has continued to trade down and that has also been reflected in lower commodity prices, especially for gasoline in the face of weakening demand for the product. Continuing bad economic news and good inventory builds has played into the numbers and that means that gasoline consumers should see a drop of approximately 4.7 cents a litre at the pumps this Thursday morning, if the numbers are right.

“Stove oils and diesels continue to show drops of almost 3.0 and 3.6 cents a litre respectively but it is harder to predict the heating oil numbers with the advent of the winter heating oil mix. A drop is possible there though, in the light of the drops in the market. Consumers should take a ‘wait and see’ approach and gear their purchases after this Thursday accordingly.

“It’s been well over two years since the last time consumers have seen 97 cents a litre in the immediate St. John’s area and it should come as welcome news, should it come to be realized. Just because we are going to see prices drop below a buck a litre doesn’t mean that consumers are good to buy as much as possible however. Consumers should still conserve as much as possible as any consumption can have the opposite effect and help to support pricing rather than see a continuing slide in prices.

OPEC cuts not deep enough?
“Look for OPEC to cut further into their self-imposed production cuts this coming December as oil prices have continued to slide. I expect OPEC to step in and further deepen their cuts by at least 750,000 barrels at their next meeting. That would probably be enough to support pricing at its current level amidst the latest round of bad economic news this past week. OPEC will attempt to put restraint on output and try to influence world pricing.

Government should extend wood pellet rebate program
‘While government has introduced a wood pellet stove rebate program, government should extend the program to include new and advanced technology woodstoves that have become more fuel efficient over the last ten years. Most wood stoves have been improved in recent years that burn wood fuel longer than previously. We also have a small wood supply industry here that is sustainable and we need to provide the incentive to consumers to improve their energy efficiency by providing funding for energy efficient wood stoves. Just because it may be a new industry doesn’t mean that it should be given “carte blanche’ to the wood fuel market. Competition helps to keep pricing down to the consumer and we need to see some of the older technology wood stoves removed to conserve on wood resources as well.

-30-


For more information, contact;

George Murphy
Group researcher/Member
Consumer Group for Fair Gas Prices
gasprices@hotmail.com

Consumers to get a break at the pumps...again!

Hi to all...

Just a quickie as I'm probably going to be doing a cross-island jaunt west again as there has been a death in my family. I have not put together an official news release on this as time just simply won't forgive me.

Not all the data is in but, here's a synopsis of what to expect. I don't think there'll be much change in them between now and Wednesday night.

Numbers
Numbers show 2.39 down on heating and stove oils (13 days out of 14 available), 6.1 down on gasoline (6 out of seven days available) and 4.2 down on diesel (13 days out of 14 available) for this Thursday morning.

Looks like CBS gets the honours of being first under a buck, eh?...lol

Reasons why prices are dropping
1) A drop in world demand and poor world economic performance has resulted in a steep decline in the numbers in recent days and that will result in consumers receiving the benefits of that drop.

2) There has been some moderate recovery in the Canadian dollar and that has played into the numbers. Over the last week, the Canadian dollar has recovered almost nine cents against the US greenback.

3) I believe that the markets have recognised OPEC cuts of last week. While oil has bounced around $65 a barrel over the last two weeks now, their related, refined commodity has shown drops as a result of reduced world demand. Look for OPEC to make another cut of 500,000 barrels at it's next meeting of December 17th as it "pays attention" to the poor economic news and moves to support it's own revenue stream.

4) This might be the last drop in heating and stove oils and we have now reached the point they were for the same timeframe last year when we saw pricing start to rise. We're entering the higher winter demand period and that also means more upwards pricing pressure. I think I would top the tank off now to be sure. In the meantime, another sell-off in the markets might start to make pricing fall again so, take that piece of advice with a grain of salt too...lol

5) My gasoline average shows that there will be possible interruption in prices if market conditions allow for spot gasoline to maintain or further drop in value. If that doesn't happen, as interruptuion requires a four cent average move +/- from the last setting, then consumers can expect to see another drop in prices in two weeks time. My average right now is 48.66 a litre over last weeks range of numbers but yesterday, gasoline traded at 44.23 a litre, a 4.43 a litre difference.
I'll keep an eye and let you all know ahead of time.

Hope this short entry helps?...


Regards,

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