Price changes for Thursday, August 6th, 2020

Hi to all,

 

Here’s what I have for price changes for this Thursday, August 6^th, 2020...

 

*Heating, stove oil and Diesel all show a drop of 1.1 cents a litre, and...

*Gasoline shows a drop of 3 cents a litre.

 

Market highlights

 

Covid continues to choke demand

Just when they thought it was safe to go back to their drill bits...

    News of any potential increase in oil prices continues to be tempered by continuing outbreaks of Covid-19 worldwide, especially in the United States as Covid-19 seems to be a huge factor in any economic recovery.

    Word of several outbreaks in Australia, Germany, Spain and the US continues to keep a hold of any meteoric rise in oil prices and demand for most distillates as well as gasoline, has been flattened.

     And with the end of summer coming quick, further drops in demand for transportation fuels, including gasoline, is highly likely.

 

Early winter outlook

With the summer drawing to a close for some, bets on gasoline by speculators usually switches to distillates, like heating oil as the fall and winter seasons contracts approach.

     The colder the weather, the more demand for distillates.

    A look at the data shows heating and stove oil spot prices a rather tidy 13 cents a litre lower than the same timeframe for last year, and if oil prices remaining relatively flat over the next few months, then consumers can expect to pay up to 79 cents a litre, down from the 92.9 they paid at peak winter pricing last year in the immediate St. John’s area.

     However, with Covid-19 holding the possibility of further shutdowns in the future that may keep everyone close to home, demand may increase to close that gap between this year and last year’s pricing.

     I’ll continue to keep an eye to it all!

 

US inventory data

The Energy Information Administration’s latest inventory data is out, and it shows a drop of 10.6 million barrels, leaving inventories of crude a full 17 percent above last years levels.

     Gasoline showed an increase of 700,000 barrels, while distillates were also reported up slightly, but by 500,000 barrels.

     Refiner capacity was recorded at 79.5 percent.

     US domestic production remained steady at 11.1 million barrels a day.

     The Baker-Hughes rig count remained at 251 operating rigs, but down from the 946 that were operating at the same time last year, a drop of close to 75 percent.

 

That’s it for this week!

 

Regards,

 

George Murphy

Twitter @GeorgeMurphyOil  

Economy plays a role

Consumers to catch a break

Media release

Conception Bay South, NL, May 17, 2011- Consumers in Newfoundland and Labrador will see a historic first this Thursday when the Public Utilities Board adjusts prices. That's from George Murphy, group researcher and member for the Consumer Group for Fair Gas Prices.

"The downwards pressure continues to rage on oil prices as economic factors start to play in the markets.A simple case of consumers butting heads with price of commodities is mainly responsible as we see that tell-tale drop in demand and a gain in gasoline inventories last week", Murphy said.

"The oil speculators are having their troubles turning things around again as the bad economic news in the United States and news of debt troubles in the European Union both continue to play havoc with the markets.

"The numbers are holding for heating, stove oils and diesel with those fuels showing negligent change. Heating and stove oils show a drop of 3/100ths of a cent, while diesel shows an increase of two tenths of a cent. Those numbers are within my margin for error of three tenths of a cent a litre so, don't look for any change there."

"Gasoline is showing a drop now of 3.3 cents a ltre now, all ahead of the traditional start of the US summer driving season, as the markets traditionally ran up prices in the weeks ahead of the US Memorial day holiday weekend. The season may be a bit of a dud for investors, if the news like the last week gets worse. Today, it was news on house re-sale activity that didn't do investors any favours, and more news dealing with Greek debt from Europe that has investors troubled with the value of the Euro again.

"That helped investors turn their eyes to the US dollar as a hedge against inflation, rather than leave it in things like commodities and the Euro, and the sell-off began last week as a result. It may spell continued problems for oil prices, if European Union money troubles start to come into play again later this week.

"The markets also saw consumers bumping heads with prices as demand fell off. Gasoline inventories showed an unexpected gain along with rising crude oil inventories, a warning sign amidst refinery production at a low 81.7 per cent rate. It was a simple case of consumers getting tired of the high price and choosing to do something else besides drive, and their collective actions spelled trouble for oil and it's related, refined commodities. It was a hard lesson for Big Oil and investors to learn; that if people don't have the money, they won't drive. It was the law of diminishing returns coming full circle. It's as simple as that."

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For more information, contact;

George Murphy

Group researcher/Member

Consumer Group for Fair Gas Prices

***Footnote to this release.
Spot prices have caved downwards by 12 cents a litre since May 10th, with consumer prices here still expecting another three and some-odd cents to come besides what I have in the release. Look for further breaks as a result next week. At least, that's the indication so far...

"Say it ain't so, Joe!"
Not another price drop!

You saw it here first from my sarcastic self, and yes, you read it right...

It's been a wild roller-coaster ride on the markets for the past two weeks now, and there's no sign of abatement. The blog had over 2300 hits from people who, like yourself, wanted answers concerning high prices.

We're all still looking and we're not expecting Minister Tony Clement to come up with any either...

"Keep it simple, Tony."

We need a national inventory reporting system and an investigation into present trading laws on the markets. It's just getting too easy to spend money that you don't have, to invest in the markets and turn into a profit before the bills are paid.

It's as simple as that...

In the meantime, while numbers in the immediate Toronto area will be dropping again tonight, the numbers in Newfoundland and Labrador will also take a drop back this Thursday morning, all in time for the long weekend.

Still one more day of data to get my hands on, so the numbers will change slightly from what I have here, but I don't think that there's going to be anything critical in the way of further changes.

Here's what I have so far this session;

• Heating and stove oils show 14/100ths of a cent upwards.
• Diesel shows an added 3/10ths of a cent upwards, and...
• Gasoline shows a drop of 2.7 cents a litre.

I'll be back tomorrow night with a final run-down on the numbers for this Thursday.

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.”

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For more information, contact;

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

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.

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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

Might be the end of the line for now
Consumers in NL will see another drop in pricing this Thursday

Media release

Conception Bay South, NL, October 21, 2008- Consumers in Newfoundland and Labrador should see another drop in pricing on most fuel products this coming Thursday, that’s according to George Murphy, group researcher with the Consumer Group for Fair Gas Prices.

“Numbers are showing at least 3.4 cents a litre down on heating and stove oils, 3.7 cents a litre down on gasoline and 4.7 cents a litre down on diesel fuel. The drop we are seeing has been mitigated somewhat by a falling Canadian dollar. Had the dollar been rated at the same rate we were looking at on September 29th, we’d be looking at pricing that would have been eleven cents less than what we’ll see on Thursday. An unsupported dollar is costing the consumer quite a lot of money and will come back to hit users of heating fuels especially hard,” said Murphy.

“Substantial builds in gasoline and crude oil inventories have helped dropped the price of oil. Match those numbers with the prospects of a recession and we have the formula for dropping prices. The unknown variable of OPEC cuts are, however, raising its ugly head and I expect to see OPEC make production cuts in the area of 1.5 million barrels a day later this week, well ahead of their regular meeting of December 17th. If they cut less than that, I expect prices to keep dropping. Any more and that will help to temporarily support pricing of crude and their related refined commodities. All hinges on OPEC’s emergency meeting later this week.”

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For more information, contact;

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

Another break to consumers on the way
Numbers show interruption to pricing this Thursday

Media release

Conception Bay South, NL, October 13, 2008- Consumers can expect to see the benefits of the last weeks crash in oil prices again this week as the Petroleum Pricing Office will be forced to use the interruption formula to bring down pricing, that’s from George Murphy, group researcher and member of the Consumer Group for Fair Gas Prices.

“Six days out of seven days data are showing good drops coming to diesel, heating and stove oils and gasoline. Diesel is expected to drop by 6.1 cents a litre, heating and stove oils by 6.65 and gasoline by 7.7 cents a litre this coming Thursday morning. Keep in mind that there may be slight changes to these numbers as there is still one more day to account for.

“The near collapse of the markets and the resounding drop in oil prices last week that bordered on the dramatic are chief reasons why pricing will have to be adjusted down. The numbers would have been substantially more except for the Canadian dollar losing almost 16 cents value against its US counterpart. In effect, consumers in Newfoundland and Labrador should be paying close to nine cents a litre less for gasoline than the new posted price this Thursday as a result of the loss of value in the Canadian dollar since September 29th. Heating and stove oil users would be looking at prices eight cents a litre less for the same reason. It goes to show that Canada is a little too dependent upon its natural resources for export rather than secondary processing. The dollar is weak compared to the troubled US currency and that says a lot.”

Update: heating and stove now shows 6.98 down, gasoline down by 7.7 and diesel down by 6.6 a litre. That's with seven days data. There will be interruption...At least, according to my numbers...
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For more information, contact;

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

2008-09 Could be another expensive winter
Heating oil costs expected to meet or beat last year’s numbers

Media release

Conception Bay South, NL, October 9, 2008- Consumers in Eastern Canada can expect to pay the same price as last year for heating oil product and they have a good chance of setting new records for the fuel, that’s from George Murphy, group researcher and member of the Consumer Group for Fair Gas Prices.

What we may see this winter
“Consumers are facing an uphill struggle again this winter as several factors have played into the marketplace to work against the cost of heating and stove oils. As of today, we are presently 16 cents a litre higher than where we were last year and we are also facing a lower Canadian dollar. That in itself has cost the Canadian consumer an added six cents a litre this past week and is going to be hard to overcome,” said Murphy. “If these numbers hold up and nothing else changes and we see the same rate of increase as last year, we have a good chance of the consumer paying upwards of $1.38 a litre for heating oils this winter if I pare that with last years record of $1.22 a litre. That, I caution, is a number based on the actualities I see now and not the actual that may occur if consumers are faced with other outside issues or circumstances. Pricing may be mitigated somewhat simply because consumers won’t be able to afford the product in the first place.”

The “If Factors”
“We do have some conditions in the markets that may change the playing field and they remain a lot of what I call the “If Factor”. Refiner capacity, for example, remains at a historic low and this has affected the building of heating and stove oil inventories. They simply did not increase during the off-use season. OPEC is trying to put together an emergency meeting to discuss possible production cuts in an effort to help sustain pricing. If they cut production in the face of economic slowdown, then we can expect pricing to be supported. There are, of course, other geo-political conditions I don't need to touch on here.

Changing conditions
“Consumers can see the opposite happen if recession hits. Again, prices have a slight possibility of decline if the use of distillate fuels drop because of the economic downturn but that has also to be matched by an increase in refiner capacity and gains in inventory status in the United States. Again, if a slowdown does occur, industries who use number two oils will not need it and distillates may increase because of less tractor trailer use.

Impact of jet fuels on the winter heating mix
“While our winter heating mix contains 75 per cent jet fuel to #2 mix and, as of today those prices remain strong being almost a nickel a litre higher in value against last years numbers. I would have hoped that the drop in airline usage would have impacted that, but to no avail. Again, we have to see increases in inventories to impact the price and that simply isn’t happening.

Consumers and governments face the reality
“Consumers will have to take a long, hard look at the type of heating system they use at their homes. Heating oil usage has been measured at a historic low in the United States and has declined in use to only 7 per cent of the northeast population, the majority of the population of which have already made the switch back to either natural gas or electricity. It may be costly to do so but, there may be some worth in the consumer investigating the switch and cost-effectiveness of such a conversion. It may simply be a case of where heating and stove oils have become redundant means of heating even though there is still a consumer need.

“Government is looking at the rebate program in Newfoundland and Labrador but there has been no word yet on the program or what it entails. To add to that, the federal government needs to actively pursue their involvement in the rebate program on a national basis as they are chief beneficiaries to any taxes collected on heat. While a conversion to other forms of heating is expensive to consumers, government may also be forced to look at helping out consumers with the costs of conversion along with possible home retrofit-type programs to help consumers save.”

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For more information, contact;

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

Good news and bad news…
Some prices up and others down

Media release

Conception Bay South, NL, August 12, 2008- Consumers in Newfoundland and Labrador will see some changes to petroleum pricing this week but, they might not necessarily like them. That’s from George Murphy of the Consumer Group for Fair Gas Prices.

“There is some disappointing news for the consumer this week. Twelve days data out of a possible fourteen shows that consumers of gasoline will be hit with a 2.5 cent a litre increase at the pumps while heating and stove oil users should see a decrease of slightly better than four cents a litre. I also expect that, with the heating-stove oil number pointing down, it may also be an indicator of the direction that diesel will be headed this pricing session,” said Murphy, researcher for the consumer group.

“Even though oil pricing has been down the past couple of weeks, we’ve seen an abject change in the value of the Canadian dollar, and that has cost the consumer in this country at least three cents a litre at the pumps and even more at the heating truck level in the last two weeks alone. Bad news was also reported from the United States Energy Information Administration when they reported a huge inventory draw against gasoline inventory as measured over the last two reporting periods.

“Oil pricing has been dropping for several reasons, any of which has had monumental impact these last couple of weeks. Demand for petroleum products in China dropped in July month by some seven per cent and the economy is showing some wear in the U.S, especially in the manufacturing sectors. The U.S dollar is continuing to gain some strength back against the Euro and investors are continuing to pull investments out of oil as that important hedge against inflation. We would be more positive about the latter if the Canadian dollar wasn’t so tied to the value of oil. It shows Canadians that they should still worry over high energy pricing this coming winter in spite of the drop in overall oil pricing; it doesn’t mean that the related commodity price will be down too.

“We’re still watching some world geo-political conditions out there that continue to affect the stability of oil pricing. As predicted here in the update some months ago, PPK rebels in Northern Iraq successfully attacked the export facilities in Ceyhan, Turkey and that resulted in a disruption in exports through the Mediterranean Ocean gateway. The situation in Georgia and Russia also promises to play into the markets of there is a disruption to exports although that may play more into European markets more so. The situation between the United Nations and Iran’s pursuit of its nuclear ambitions promises to be a contentious issue in the coming weeks as the United States pushes for possibly more sanctions and Iran’s insistence on the pursuit of nuclear power. We also have the sniffers out waiting for OPEC to pull the plug on some production this coming September if oil continues to fall in value.

“Waiting in the wings is also the weather. Remember that we’re into Hurricane Syndrome season and that means possible market plays against possible supply disruptions in the Gulf of Mexico. We are fast coming up to the three year anniversary of Hurricane Katrina and Rita and the national Hurricane center has also increased its prediction on the number of possible storms. It is promising to be an interesting couple of weeks and well worth watching.”

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For more information, contact;

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

On the tail end of last week...
Consumer pricing to drop again

Media release

Conception Bay South, NL, July 29, 2008- Consumers in Newfoundland and Labrador will again see some drops in most petroleum pricing, all this coming on the tail-end of market activity last week.

What consumers will see
“With five days of seven days data needed, consumers will see close to 2.8 cents a litre down on gasoline while heating and stove oils will drop by close to 4.1 cents a litre. The heating-stove oil number may also be an indicator of where diesel pricing may be going as well which will be welcome to the transportation and fishing industries in the province. They’ve been waiting for a long time to see pricing come down.

Cold comfort in the heating-stove oil numbers
“Heating and stove oil numbers have come down in recent days but there is still a long way to come down just to reach year-ago levels. Heating oils will still be 37 cents a litre higher than the same time last year and that’s with this weeks projected drop in pricing included. If we don’t see a concerted drop in oil and related refined commodity pricing, then there is big trouble ahead this winter for consumers. It may be hot outside now but the numbers are providing cold comfort for consumers when looking at last years numbers. There’s still nothing here for consumers to be happy about in spite of recent drops in pricing.

What will oil do in the next little while
“OPEC production is picking up in spite of a drop in demand in recent weeks and that figures heavily this week as we see the numbers change in the consumers favour again. OPEC member Saudi Arabia was responsible for some increase in available crude oil on the markets as the OPEC country promised an added 300,000 barrel increase in June and added another 200,000 starting this July. That second oil increase will make its play in the markets shortly and we’ll see a small move back to the US dollar as an investment rather than commodities-at least for the time being. That may mean some slight relief to come for consumers as both demand and inflation weigh in on overall consumption and the high price of oil plays as a mitigating factor in consumer purchases.

Other factors remain in play
“Consumers still have to be on guard for other conditions that remain in play in the markets. We still have the promise of world geo-political situations like Nigeria and the Middle East and Iran that can show their ugly head at any time as Nigeria did in yesterdays market play. We still have Hurricane Syndrome playing in the markets as well with the markets playing with weather conditions and possible supply and refining disruptions in the Gulf of Mexico. Traders will use anything right now, to help support oil pricing rather than see a decrease caused by market actualities in the future.”

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For more information, contact;

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

Heating and stove oils…

Interruption possible this week to heating and stove oil prices

Media release

Conception Bay South, NL, July 8, 2008- Consumers of heating and stove oils, and possibly diesel fuel, may see an increase in price this week that could be as much as 6.66 cents a litre. That would bring the maximum retail price in excess of $1.29 a litre for the St. John’s and immediate area.

“The numbers I have as measured for the first five days of this regulation period range in excess of six cents a litre. It remains to be seen if during Monday and Tuesday trading those prices backed down as much as oil did in order to avoid interruption. If they never, consumers could be looking at a new all-time record price for heating and stove oils, all at a time that puts the important heating product on life support”, said George Murphy, group researcher for the Consumer Group for Fair Gas Prices. “If they did, then we’re still looking at a possible increase to consumers coming next week. Gasoline will not face interruption to pricing this week. I guess you can say that ‘Pump Day’ is officially cancelled until next week”

“What should bother people is the fact that we’re now experiencing hot weather and that’s the time when traditionally, heating and stove oils have been known to crash but the alarming aspect here is that prices are moving in the opposite direction. Numbers here I worked up are showing that $1.40a litre heating and stove oil is a distinct possibility this winter unless we see a mass retreat in prices. Sad to say but there has to be evidence of heavy economic damage or large inventory builds in distillates before we see any retreat in heating and stove oil pricing.

“Diesel pricing may also be reflected in those numbers although I don’t expect to see as large an increase. Diesel may dodge the interruption process but, if it doesn’t, we’ll be looking at a larger burden being placed on our transportation and fishing industries. They need some sever help but, no one is listening. It might be 25 degrees outside today but there’s more than 25 degrees of separation between what the markets are doing and the actualities that we hear that the markets should be reacting on.

“What the investor doesn’t realize is the fact that, not only are small independent oil dealers being sucked dry by the loss of volume, but they are also destroying the need for heating and stove oils as primary heat sources. They’re forcing people to go to other sources of heat other than petroleum products. They are, in fact, setting themselves up to get burned and, at the same time, radically changing the home heating markets in such a short time..

“Last week it was a drawdown in crude inventory, as miniscule as it was, the ongoing world geo-political situation in Nigeria and more importantly, the Iran situation and their pursuit of a nuclear program and Israel’s promise of an attack against those facilities. Also mixed into the equation is the falling US dollar and investors continuing to hedge against commodities rather than the US greenback. What about the fundamentals like dropping demand?”

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For more information, contact;

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

No dodging the bullet this week...
Gasoline prices to take a swipe at consumers this week

Media release

Conception Bay South, NL, June 17, 2008 – Consumers in the province will be taking another hit in the pocketbook this week as prices for gasoline are expected to take a 5.5 cent a litre increase on Thursday, that’s from George Murphy, group researcher and a member of the Consumer Group for Fair Gas Prices.

What will consumers see?
“Twelve days of data out of a possible fourteen needed show that prices will jump this week by 5.5 cents per litre at the pumps. It’s not going to be any significant difference, the other two days. The numbers will be close to what we have. While we didn’t get it on the chin last week, we know we’re going to get it this week and this one will hurt. I have a number for heating and stove oils but, I’m not that trusting in the number until I see what the PUB will do this week. I’m showing an upwards move but I want to see if there’s any redress back to what I traditionally had before the numbers went out of whack last week. I never changed my system of measure for the last ten years yet, the numbers went way out of the traditional for the past summers’ measurement so, I don’t want to make a prediction until I see what the PUB moves the figures by. I will tell you though, that the heating and stove oil numbers show ‘up’. Is there a conspiracy against what I do? I don’t know. Someone else will have to answer that,” said Murphy.

Marine Atlantic increases rates
We told you all about a month ago that Marine Atlantic would soon have to adjust rates simply because of the move in distillates and oil pricing but, a conversation I had with Marine Atlantic staff some time ago tells me that the increases may not be necessary if the company does one of two things; namely ask Ottawa to absorb the increases outside of it’s budget or do the environmentally positive thing and slow down the boat by a knot or two. While Ottawa may not do the right thing, the possibility that slowing down the crossing on the Gulf by a knot or two would save untold tons of fuel that is leading to the fuel surcharges being added to the price of a ticket. The sources from Marine Atlantic tell me that slowing down the boat just a little may be able to help the company prevent passing on the hike to the price of the crossing. I’m told that, if they slow the ferry crossing by a knot to conserve fuel, it would add an extra fifteen minutes to the Gulf passage. Can this be true? What has Marine Atlantic done in regards to fuel conservation measures? It also begs the question, is the provincial government getting ready to hit the taxpayer with the same thing here for ferry services?

Inventories take a beating
The news out of the Energy Information Administration last week may have been a little bullish in the extreme but the markets still traded on a downturn in crude inventories never-the-less. “Here we are with something in the order of nine million more barrels of gasoline in the inventory but we see a draw-down in crude oils because of ‘anticipated’ demand. Here we are looking at a drop in consumer demand for gasoline by 1.3 per cent but we still see active trading on anticipated heavy consumer demand. I simply don’t get how these guys do it and the markets get away with it. It’s all bad news in spite of all the good news out there.”

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For more information, contact;

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

P.S I'll update the numbers on a daily basis as the info becomes available but, i don't anticipate much change in them.

Big win for consumers
Competition Bureau hits a home run

Media release

Conception Bay South, NL, June 13, 2008 – Some oil companies are going to have to “work harder” to gain back the consumers trust after the federal Competition Bureau pressed charges of price fixing and collusion against several Quebec companies yesterday.

Three companies have already pleaded no contest and face up to two million dollars in fines for their folly and one of those companies also has operations here in Newfoundland and Labrador. Ultramar Limited was fined close to 1.9 million in their role in the scheme.
The Bureau is also alleging that other retailers operating under the Shell, Esso, Irving Oil and Petro-Canada picked up the phone and called each other to agree on what price to set.

“Consumers in this country have believed that companies charged the same price because they were afraid of giving any market advantage to the other guy. Now the Bureau has found out that this is not the case. In reality, what they found out was that, at least some of the companies literally made a fortune in spite of ensuring we were ‘getting good value’ for our dollar. Now they have to go to work and try to gain the trust back from us,” said George Murphy, group researcher for the Consumer Group for Fair Gas Prices.

“It’s just another reason why we have gas regulation in this province. There’s a lack of trust among oil companies and the lack of competition before regulation was quick to point that out. Fact is, is that oil companies here and elsewhere purchase gasoline and other oil products on different days and the price is different between those companies for that very reason, yet the price didn’t change between companies here. It begs to question if companies here may also be under the scrutiny of the Competition Bureau. Before regulation came in, there was no control to prevent such a thing from happening here. It would not surprise me in the least to learn that the Bureau had companies here under investigation because they failed to drop the price when the markets showed a drop in pricing. It has to be asked of the oil companies here, knowing that there is no regulation of the minimum to be charged here, why they don’t compete on that basis for market share.

“The Competition Act and the Bureau both need to get a little more work. Laws preventing the sharing of supply have to be revisited and such things as ‘reciprocal sales agreements’ and market rationalization of the oil refining industry need to be examined. Companies should never be allowed to share from the one source of supply that happens in some areas of the country, particularly in less populated areas. It is, I believe that simple ‘reciprocal sales’ arrangement that has ‘tempted’ oil companies to charge the same price in the first place. If Ultramar wants to sell here, they should be shipping in their own product from the Montreal refinery instead of buying stock off their competition like Irving or North Atlantic.

“Lead us not into temptation.

“The Competition Bureau and Liberal M.P Dan McTeague both need to be congratulated today for the hard work both parties have put in over the face of this investigation and for the changes in the Competition Act that are being lobbied hard for. What is missing here is restitution back for consumers and a means of levying heavier fines in the wake of the money that these companies garnered at the consumer expense. It’s going to be a long road back for some of these companies to earn consumer trust. These charges show that consumers didn't get value for their money.”

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For more information, contact;

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

Last weeks miss is this weeks hit…
Consumers will see price increase to gasoline this Thursday

Media release

Conception Bay South, May 20, 2008- Consumers in Newfoundland and Labrador will face the inevitable this coming Thursday morning when they will experience another increase at the pumps.

What consumers will see
“Consumers barely dodged the increase last week. Numbers were so close that they fell within the margin of error that I work with and that’s why we made a price increase warning. This week, there is no mistaking that there is going to be an increase at the regular price setting. Numbers are still falling close to what we had last week, of 3.9 or 4.0 cents per litre up at the pumps. That’s with twelve days reporting out of a possible 14 needed to get the final numbers.

“Heating and stove oils are showing an added 65/100ths of a cent up and that may be pointing the way of diesel fuels as well. We’re still not seeing the substantial drop in distillate prices in the non-demand season as in other years and that should be very concerning for those using distillates for winter heating sources.

Why prices will be going up
“Market volatility is still playing heavy in the markets this last two weeks. Heavy trading in commodities against a lower U.S dollar continues to be a factor in oil and its related refined commodities. Distillates, as of last week, are still showing an increase in demand over the same timeframe last year, of close to one per cent. Of course, we still have the same geo-political conditions still playing themselves out in the markets as well and that’s besides the various disruptions and threats to supply. While refiner capacity increased last week, low reported profit margins are not enticing refiners to get back into the production of gasoline while gasoline itself, shows a drop in consumer demand by .2 per cent ahead of the traditional start of the US summer driving season. The big news this week however, is that heating and stove oils continue to show an increase in price while we enter the non-demand season and this should be a worry to those users of fuels for the coming winter. If we don’t start to see a drop in demand numbers there along with a corresponding drop in spot prices, we are going to be in big trouble.




Some changes made to the Gas and Oil Update
We have made some changes that will make it easier for consumers to obtain our information. Consumers only have to go to www.gasandoil.blogspot.com and use the subscribe option to get the ‘Heating and Gasoline Update’ delivered to their inbox. I found that it was simply too hard to get everyone to send you an email back when their email address had changed. This will make it easier to do the administration of good versus bad email addresses that has long been a problem. I hope that the consumers of the province avail of the service as it is a free service to consumers.

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For more information, contact;

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