Oil mostly steady

Media release

Conception Bay South, NL, January 24, 2012- Consumers will only see some slight adjustment to prices when the Public Utilities Board adjusts prices this coming Thursday. That news comes from George Murphy of the Consumer Group for Fair Gas Prices and MHA for St. John’s East.

“Numbers show only slight movement in keeping with the movement of oil prices, but you have to ask why prices haven’t moved lower, considering where oil prices are.” Murphy said. “Heating and stove oil prices are projected to drop by 1.47 cents a litre while diesel is expected to dip just 1.6 cents a litre. Gasoline prices are expected to show an increase of a penny on a litre. Numbers don’t reflect any market volatility however.”

Crude steady. But why

“The movement of crude oil, WTI in particular, has dropped a little over a dollar US on a barrel, not a lot in the context of things considering the world geo-political situation. I would have expected that oil prices would be climbing much higher, especially with the situation in the Strait of Hormuz and the ongoing conflict with Iran over its nuclear program. There’s a message in there. Investors and speculators are nervous about something else that I think translates into the world financial situation, particularly in the European union. I think we’re on the edge, especially if the Union can’t reach an agreement with Greece over debt repayment.”

“If you consider that, just today, the European Union has tightened the embargo of imports from Iran, there has been an escalation in tensions, but oil prices have mostly remained steady. They should be going the opposite direction, if things were normal economically, and there was a huge dependence on Iranian crude, but there’s not.

“Secondly: last week saw a considerable drop in crude oil inventories in the United States, but still no substantial movement. If the markets can’t pay attention to those details, then there’s something greater at work here, and no one is talking about it. Between affordability of refined product and tightening credit markets in the European Union, I think something is going to break shortly. But, I think it’s going to have to be substantial either way to bring some relief to consumers. We’re at another breaking point.”

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For more information, contact;

George Murphy

Group researcher/Member

Consumer Group for Fair Gas Prices