Prices not sustainable for long
Consumers to see slight increases this week

Media release

Conception Bay South, NL, August 31, 2010- In spite of today’s retreat in oil prices today, consumers can expect to see a slight increase in most fuel prices when the PUB adjusts prices this coming Thursday. That’s from George Murphy, group researcher with the Consumer Group for Fair Gas Prices.

“For the best part of this regulation period, oil prices climbed slightly above $75 US per barrel. With the exception of today, refined commodities also climbed, and that means some slight adjustments to prices, at least for this week. Today’s retreat in prices may be the forerunner of what is to come for next week.” Murphy said.

“I expect heating and stove oils to increase by 3.29 cents a litre, diesel to increase by 2.2 cents, and gasoline is showing an added 1.5 cents a litre at the pumps. I don’t think this will last long as the markets are again getting the jitters with any hopes of a strong economic recovery. I’m expecting a retreat in prices for next week, especially as an industry report is showing ‘glowing’ numbers in inventories of crude oil and gasoline.

“Inventories are at a high for the summer months and demand is mellow as compared to other years. The data is starting to form an even bleaker picture for any recovery in oil prices, especially considering the fact that inventories are at their highest since the Reagan administration and distillate inventories also sit at record levels. That could mean some moderation in prices to consumers if investors recognize the signs of trouble out there.

“The traditional end to the driving season is fast approaching and consumers may see some moderation in the weeks to come, and if investors see the signs, oil investors may be forced to yield. Maybe then, with cheaper energy prices, we might be expected to be witness to economic recovery. With oil prices high, we can’t expect recovery to happen readily.”

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For more information, contact;

George Murphy
Group researcher/Member

Drop in prices for consumers on the way

After a hectic week of oil trading, consumers will see a small drop in prices that would have been considerably more had there been some stability in the Canadian dollar.

There wasn't.

The Canadian dollar lost almost three cents against its US counterpart this week cushioning the drop to fuel prices here in Canada somewhat. If the dollar had to remain stable, we would have been looking at close to a three cent a litre drop across the board.

Here's what I have for this Thursday:

• Heating and stove oils will drop by 12/100ths of a cent.
• Diesel shows "down" by 4/10ths of a cent, and...
• Gasoline shows a drop of 8/10ths of a cent per litre.

With the Canadian dollar tied so closely to the price of oil, it dropped along with oil prices over the last couple of weeks. The Canadian dollar is known as a resource, or petro-dollar because of the relation between it and oil prices.

Hurricane Danielle
I'm not anticipating any effects to fuel pricing because of Hurricane Danielle. Right now it has been downgraded to a tropical storm, but is expected to pick up steam again and reaching hurricane status once again according to the National Hurricane Center. Its five day track shows it to be well off the coast of North carolina heading in a generally northerly direction on Sunday coming, well away from important oil infrastructure. There should be some concern to Atlantic Canada however as its track points it directly toward the US Eastern Seaboard and Eastern Canada.

That's it for now!

Regards,

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

Numbers confirm it
Substantial drop in prices coming to consumers

Media release

Conception Bay South, NL, August 17, 2010- Consumers in Newfoundland and Labrador will see a substantial drop in prices at the pumps when the Public Utilities Board adjusts prices this coming Thursday. That’s according to George Murphy, group researcher for the Consumer Group for Fair Gas Prices.

“Markets in the United States are again reflecting the actuality of the economic situation, all against word of possible economic recovery. Most indicators are showing that there is a possibility that the United States is about to enter a second recession, or ‘double dip’. Consumer confidence is a record low and housing sales have plummeted indicating that consumers there just don’t believe that they’re out of the woods yet. As a result of this, oil prices took a pounding last week and that’s reflected in refined commodities as well.” Murphy said.

“All the data is in and it’s good news for the consumer as we head toward the end of summer. I expect heating and stove oils to drop by 2.95 cents, diesel to drop by 3.2 cents a litre. The good news on gasoline shows a drop of 3.7 cents a litre on the way for Thursday morning.

‘The real good news just hasn’t hit us yet. Here we are close to the end of summer and still no major hurricanes have developed that could have the potential to threaten Gulf of Mexico production. We’re fast approaching the five year anniversary of the Katrina and Rita hurricanes of 2005, which was an even more active hurricane year than this one so far. It seems the predictions of major storms this year is off a little, and will continue to be, with luck! If we can get past the middle of September without a major hurricane threat in the Gulf, we should be in line to see a further retreat in oil prices.”

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For more information, contact;

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

Just a word to the wise...

Numbers here are showing substantive drops to all fuel prices that I check, and with one day of business left to recover, it certainly looks like the numbers will hold.

I'll be back later tonight with the official release on the numbers, but here's what I have right now:

• Heating and stove oils are down by 2.96 cents a litre.
• Diesel is down by 3.2 cents a litre, and...
• Gasoline is down by 3.5 cents a litre.

I imagine that, after today's business day, these numbers should show at least another two tenths down on top of these numbers. Either way, it's time to hold back a little.

Regards, for now!

George

Distillates up, gasoline is down for this Thursday

Hi to all...

Figured that I would keep this simple again!

Not too much change in the numbers although distillate prices are elevated over the past week, as predicted they would be, and they will be going up.

Gasoline, according to my numbers, will be dropping.

Here's what I have for this coming Thursday with all the data now in;

• Heating and stove oils show an added 1.27 cents a litre.
• Diesel shows an added 1.6 cents a litre, and...
• Gasoline shows a drop of 1.9 cents a litre.

Market highlights

• Oil continues to bounce around the $80 US a barrel mark, all in spite of the latest news on economic recovery. The US and China are both having their problems, numbers being reflected in China regarding inflation and numbers in the US reflecting dropping productivity and lower housing starts.
• The Canadian dollar lost close to two cents against the US greenback. Because the Canadian dollar is so tied to resources like the value of oil, it lost ground when oil retreated by $2 US over the past week.
• Refineries operated at a 91.2 per cent capacity last week. There's lots of product out there and it is being bought by consumers, that fact being reflected in the demand figures. gasoline demand is up better than two per cent, while distillates are showing increased demand as well.
• With lots of crude oil on hand, refiners bought little and that impacted inventories of oil, dropping by some 2.8 million barrels. Gasoline and distillate inventories increased however, making this the third week in a row for inventory gains amongst refined products. Unless something extraordinary happens in the markets right now, we're already past peak pricing for summer gasoline.
• The average price for West Texas Intermediate crude oil was $75.84 a barrel, the third month in a row that crude oil was below the $83 US a barrel estimate needed by the provincial government to show budget numbers as being on track. Crude oil now needs to average better than $87.50 a barrel for the rest of the year for the province not to have to worry over another budget deficit.

That's it for this week!

Regards,

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

Six day figures show numbers are up for distillates

No surprise for me...

Last week I noticed a trend being set, and it wasn't a good one. With the focus of the markets being mainly set on possible economic recovery, the numbers for oil have also been up.

Refined commodities up right along with it as well.

As I predicted last week, numbers are up for both heating and stove oils, and distillates like diesel fuel as well, albeit, not quite up to the two cent a litre figure I talked about, but still with one more day to go...

Gasoline shows "down" so far, and is likely to stay down when I have the final numbers tomorrow night.

Here's what I have so far, like I say, one more day to go:

• Heating and stove oils are up by 1.36 cents a litre.
• Diesel shows an added 1.7 cents a litre up, and...
• Gasoline shows down by 1.8 cents a litre.

The disturbing thing I'm seeing in all this is the rebound of heating stove oils and diesel numbers, all distillate fuels. It's bad enough that we see high heating prices during the winter, but now we're witnessing a run-up in heating oil prices during the summer when, traditionally, they have been down.

Diesel fuel is showing the same characteristic moves up, but most likely caused by a run-up in diesel use because of a proposed economic recovery that is doubtful.

I just keep wondering to myself: How long will recovery occur when we're talking rising energy prices? Cheaper energy means a more robust recovery, does it not?

I'll have the final numbers tomorrow night, but from the look of things, it's distillates "up" and gasoline "down" for Thursday morning.

Regards,

George

Consumers will see a small hit this week
More Increases could be on the way

Media release

Conception Bay South, NL, August 4, 2010- Consumers in Newfoundland and Labrador will see some slight increases to consumer prices this week when the Public Utilities Board adjusts prices. That’s from George Murphy, group researcher with the Consumer Group for Fair Gas Prices.

“Oil prices have increased by close to six dollars US a barrel this week, so there is no doubt that we’ll get tagged at the pumps. The meteoric rise in oil prices, particularly over the last two business days, has also meant an increase to refined commodities. We are, however, being insulated somewhat by the rise in the Canadian dollar against the US greenback. That has kept the increase in refined product low compared to what is normally seen with any major increase in oil prices,” Murphy said.

“I expect heating and stove oil prices to increase by 92/100ths of a cent. Diesel will increase by 1.3 cents a litre, and gasoline to increase by 1.8 cents a litre, putting gasoline prices in the summer range of $1.10 and $1.14 a litre.

“The numbers are small but the last two business days have brought the averages up for distillates, meaning that we haven’t seen the last of possible increases to come there. It’s my belief that there’s a possible two cent a litre increase for next week, provided oil and distillate prices remain elevated for the next seven days, and barring any unforeseen changes to market conditions. Already, that’s beginning to form a picture of heating and stove oil prices being elevated at the start of the winter heating season. I’ll have a better handle on what to expect this winter later this month. It could also mean possible troubles with diesel fuel prices. With Newfoundland and Labrador heavily dependent upon the use of diesel to power the transportation sector, it could mean higher prices for consumer products because on increased transportation costs. Higher oil prices may be good for the provincial treasury, but not necessarily for the consumer.”

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For more information, contact;

George Murphy
Group researcher

Oil tops $81 US, but for how long?

While oil may have broken the $80 US per barrel mark, the questionable recovery of the world economy has to be one factor that can pull oil back under.

Some consider the spark that started the last recession to exactly that; oil at a price that was no longer affordable by the consumer and industry. Are we now at a point where consumers will start to ask themselves the question again: Can I afford high energy?

Here in Newfoundland and Labrador, consumers are already dealing with gasoline and diesel prices that range better than $1.08 a litre. For consumers and independent truckers, businesses that depend on the transportation sector, again they are all going to be forced to take measures to conserve energy and try to cut losses. It is again that the Canadian dollar will show it's strength against the US dollar as the dollar reaches parity. It may be the only measure out there to absorb the shock of rising oil prices.

With five days of numbers at hand, there is enough to show increased prices again for all fuels I measure, and the prospects of high oil will also have to be noted to users of fuel out there. Just how high will oil prices go before we see another bust?

I'll be back tomorrow night with the final breakdown in the expected price increases for this week!

Regards,

George