Markets still in flux?

Refined commodities increase in price

Media release

Conception Bay South, NL, January 31, 2012- While oil prices remain relatively steady, consumers will still see a slight increase at the pumps. That news comes from George Murphy, group researcher for the Consumer Group for Fair Gas Prices.

“Investors have found a new playground for now. They’re not making money off the refined product because no one wants to completely shut out the economic recovery, but they’re forgetting that they’re picking consumers’ pockets by doing what they’re doing.” Murphy said. “The market news is not reflective of where reality to consumers should sit. Oil prices are down a buck a barrel this past week.”

The numbers

“Numbers show that consumers will see a slight increase to distillate fuels. Heating and stove oils show an added 62/100ths of a cent, while diesel shows an added half penny upwards. Gasoline shows an added two cents a litre upwards, probably motivated by a slight drop in inventories last week.”

European union problems make a play

Waiting in the wings is the financial situation in the European union that still will make a play should European leaders fail to reach an arrangement on financing Greek debt, or should Greece default. Other EU countries have since faced a downgrade in their credit ratings as well, with Belgium, Portugal, Italy being some of the countries that face the placement of heavy austerity measures that could curtail consumer spending. The financial situation may also be to blame for the latest numbers on unemployment in the EU member nations. Unemployment hit a new high of 10.9 percentage points today.

Iran set to cut exports

Iran is set to cut exports to the European Union, all in spite of the European Union placing an embargo on imports from the Middle East country, but it’s not that Iran is too worried about exports. Reports indicate that India will still import Iranian crude oil, and that China and North Korea will again probably pick up the load left by the Euro nation countries. Hardly to be effective, the start of an embargo will hardly damage prices. Iran exports almost 450,000 barrels of crude per day to the European Union, probably not enough to play into prices. It’s the promise of any disruption of exports through the Strait of Hormuz and any disruption to exports from other oil producing countries in the Gulf that will play heavier into prices.

OPEC numbers are out

Just how much oil is out there?

Take these numbers into consideration. OPEC January production reached a three year high of almost 30.9 million barrels per day with Libyan production now at 925,000 barrels per day, just short of the pre-war export level of 1.5 million barrels. Saudi Arabian production ranged 9.65 million barrels per day in the same month. Nigerian production was set at 2.1 million barrels, in spite of some disruption with ongoing tensions in the African country. Production disruptions have caused a slight drop of close on 80,000 barrels a day there.

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For more information, contact;

George Murphy

Group researcher/member

Consumer Group for Fair Gas Prices

Twitter: @GeorgeMurphyNDP