Oil holding steady

Distillate prices up on cold European weather

Media release

Conception Bay South, NL, February 7, 2012- Consumers won’t see much change to gasoline prices this week, but the same can’t be said for distillate fuels as refined distillate prices continue to climb. That news comes from George Murphy, group researcher for the Consumer Group for Fair Gas Prices.

What’s driving up distillate prices?

“Cold European weather is probably what is driving up refined distillate prices this time around. Record cold and the fact that European countries are the heaviest consumer of distillate-type fuels are combining to move heating, stove oil and diesel fuel prices this time around, and if the cold weather persists there, it may not be the end of it.” Murphy said.

The numbers

“Numbers show that heating and stove oils will increase by 1.05 cents a litre, while diesel fuel will increase by a penny. Gasoline prices are relatively steady, in fact showing two tenths of a cent down for this week. Keeping in mind my margin for error of three tenths, there may be no change to gasoline prices this time around.

Numbers for next week are starting to form already with distillates showing up so far by another two cents or so, with gasoline again showing hardly any moves, albeit upwards in the tenths of cents. Those preliminary numbers will change if the cold snap breaks. Keep in mind as well that this is very early and full data has to be collected before I can make a final guess early next week.”

Saudi Arabia to keep prices below $100 a barrel

Bin Talal, the CEO of Saudi Arabia’s Kingdom Holding company says that his country cannot allow market jitters over the Iran situation drive up oil prices above the $100 US a barrel mark. Market fears are such that traders believe that if Iran were to block the Strait of Hormuz over its nuclear program, then any exports from Red Sea ports will be disrupted, thus driving up oil prices.

However, the same belief cannot be said of Brent crude prices, which are a more widespread use worldwide, which are set to break $120 US a barrel. Some are saying that the Saudi’s are playing the $100 a barrel card to calm market fears over a possible sharp rise in crude oil this summer where prices are projected to trade for $180 US.

“I don’t think that $180 US a barrel is possible however. If that happens, we’ll all be witness to a collapse in consumer spending and a collapse in any economic recovery the likes we’ve never witnessed before, you can count on that!”

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For more information, contact;

George Murphy

Group researcher/Member

Consumer Group for Fair Gas Prices

Twitter: @GeorgeMurphyNDP

Oil takes a pounding

Look for more updates on this one again as oil prices take a pounding in the markets today.

Oil trading lower as a result of bad economic news out of the US with a lower than expected drop in US inventories, lower economic growth forecast and a higher than expected unemployment report all playing heavily in the markets.

WTI trading down, as of 12:00Noon Newfoundland time, by $4.64 US a barrel and Brent trading down by more than six bucks US to $107.46 and below what the Newfoundland and Labrador government's budget forecast of $108 US.

Gasoline is trading down by 14 cents US a gallon and heating oils also are trading down by 16 cents a US gallon as well.

Might be another good week on the consumer end, especially if the "Canuck Buck" stays up!

I'll be in touch on this one as well as it unfolds, so you might want to hold off buying any fuels for a bit.

Regards,

George

Could be short-lived

Volatile week results in a break for consumers

Media release

Conception Bay South, NL, May 10, 2011- Consumers in Newfoundland and Labrador will see something that they haven't seen in a long time when they wake to lower prices this coming Thursday morning. That news is from George Murphy, group researcher and member of the Consumer Group for Fair Gas Prices.

"Enjoy the drop in prices for now, because it may not last long," said Murphy. "Prices are already starting a meteoric climb since last week's drop in oil prices and oil's refined commodities are leading the charge. Consumers in the rest of Canada will be tagged tonight with further increases in prices and numbers are showing a trend toward increases to come to consumers here for next week. I have never seen a week of volatility like this since the Katrina and Rita hurricane events of 2005. There's a lot of instability out there."

Prices to drop

"I have heating and stove oils to drop by 6.86 cents per litre, which is a welcome break to users of that fuel. I'm hoping that pressure will ease off the important heating oils, but there is already a small upwards movement in prices above my average for the last week, which is not good news for next week.

"Diesel fuel shows a downwards move this week by 6.9 cents a litre but is also trending upwards for next week's price setting, showing a two cent a litre increase so far
.

"Gasoline now shows a drop of 2.8 cents a litre, now a full four cents off what the numbers showed after just one day of data last week. It's indicative of what has occurred in the markets for the past week. Numbers for gasoline are already showing that, if the trend holds, consumers could see an increase coming of up to six cents a litre if the trend holds for the next seven days. The markets could in fact turn the opposite way again before then, so I'm insecure about saying what is the definite here for next week, but there is a trend developing."

Putting the screws deeper

Big Oil is having a field day and speculators are in for the ride now. Oil has dropped by sixteen bucks US the past week trading down from $113.93 US on April 29th to drop back to $97.16 US on May 6th, only to recover to $103.88 for today, May 10th. In that time, refined commodities have climbed back up to April 29th levels again with oil off the 29th mark still by ten dollars US a barrel. I can't find a reasonable explanation as to why that is, but someone out there in the realms of the speculator is now making a heck of a lot of money. Best thing is, is that they don't have to explain it to anyone. They're no longer accountable. I'm willing to bet that refined commodity prices will not show a retreat while oil still advances to it's old mark set last week, then you'll know."

"Other region of the continent will be in for sticker shock, particularly our US neighbours. They'll take a hit upwards tonight by thirteen cents a gallon and diesel will increase by another nickel US. Other areas of Canada will also take a hit tonight with Toronto prices climbing another three cents a litre and other regulated markets possibly taking a more substantial hit later this week. This volatility in the markets is playing itself North America wide. I believe that the economy is soon going to pay the price if there is no retreat in fuel pricing. I believe that we've arrived at a breaking point."

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For more information, contact;

George Murphy

Group researcher/Member

Consumer Group for Fair Gas Prices.

Numbers are in
But can they be trusted?

Hi to all...

After last weeks "shenanigans", I don't know what's going to happen with the numbers this week. I'll be blunt.

But, here's what I do have.

I haven't changed my sources or the way I have done things.

Let's see if they did...and see if my numbers come back on track. I know the "Stove" number is solid.

• Heating and stove oils show an added 2.88 cents up. Keep in mind again that the stove oil number is a rough guide on where heating oil numbers could go.The number is the same as the stove number in the non-winter season. During winter, they throw in kerosene into the stove oil number and that acts as an antifreeze agent.
• Diesel shows an added 2.0 cents a litre up, and...
• Gasoline shows an added 8/10ths of a cent.

There is volatility in the numbers.
The first five days of this session showed oil and related commodities up and still climbing from last week, all on steady demand and a draw-down on inventories.

And then the IMF and IEA weighed into the fray on Monday.

The last two days with the oil sell-off, numbers have been all over the place. It's a sign that markets are unsure and that there's some doubt over continuing demand for oil and it's related, refined product. That fact showed itself with the International Energy Agency adjusting its world demand figures for oil downwards. The reasons for that are quite apparent: that world economic recovery could be hindered by high energy prices.

That started the retreat and oil's strategic withdrawal.

That's it for me for this week, but keep an eye to your email for a special invite from this poster for later this week!

Regards,

George Murphy

Group researcher/Member

Consumer Group for Fair Gas Prices

Numbers off?

Sounds strange, I know, but true.

The numbers for heating oil were off but we already knew that that might happen. As I said often before that the winter heating blend was different and that we could only go by the stove oil number to use as a guide during winter months until I find a source for kerosene. That's because kerosene is used as an anti-freeze agent during the winter months on a 75/25% mixture. That's why the stove oil number was within the margin for error.

As for gasoline? Different story...

I've checked and re-checked, and they still show the same: that increases should have happened that would have taken gas up by five cents a litre.

Thankful?

Yes, but now people may be questioning my accuracy.

I've checked three sources online and all are showing that my numbers are dead on, so, I can't explain the differences. I even went to three different gasoline types and they all showed increases over the past week ranging close to 6.6 cents a litre on gasoline that was supposed to be there. That was for a reformulated blend out of New York harbour, as it is known in the markets.

Conspiracy?

I can't say, but it has been mentioned before that someone may be making calls to someone down the line to hold back on putting the full charge to the consumer in an attempt to discredit. But tonight, the reality is that we got tagged with 2.5 cents at the pumps rather than the five I had, and I really can't go searching for that extra 2.5 cents.

Maybe they made a mistake in their numbers, after all?...

Naaa!...

Maybe they're "banking on it" for later!

Regards,

George

Oil gains

Consumers to pay

Media release

Conception Bay South, NL, April 05, 2011- Consumers will be taking another hit at the pumps this week, and prices for heating oil and diesel will continue to take a tole on consumers. That's from George Murphy, group researcher for the Consumer Group for Fair Gas Prices.

"Blame it on Libya, the situation in the Middle East, North African unrest, or even steady demand, but the fact is that consumers should be pissed that, as a country that produces more than it consumes, we are subject to paying for fuels based on the world condition. I'm getting a little tired of hearing that our oil resources are sailing away for refining and to keep Uncle Sam happy, while we have our own citizenry freezing in the dark because of prices driven by speculators. It's high time that we saw the concept of 'Made in Canada pricing' for our own people through, and be damned the bottom line of the corporate bottom line." Murphy said.

"It's time we put in place a 'Newfoundland and Labrador first' policy on the further development of our own offshore resources, and it's time to start looking after our own people. We're just not seeing the full benefits of our resources. Food bank use is at an all-time high, the heating rebate buys a little less than a quarter tank of fuel now, food prices will continue upwards because of fuel surcharges, and pensioners haven't seen an increase in years. We have people choosing between food and keeping warm, and nothing is being done for the ones who need it most."

"The oil beat goes on."

"The numbers for this week are not good. Heating and stove oils are showing up again, this time by 1.24 cents a litre, diesel numbers are up by another 1.3 cents a litre and gasoline shows either 4.9 or an even five cents a litre increase on the way for Thursday.

"The only hope there is right now for us to see any relief is one of two things: a complete banking system collapse in the European Union, or a sudden drop in demand. While countries like Portugal have been showing signs of trouble in recent days with a huge bail-out needed for it's banking system, we still have not seen solid evidence of a drop in demand, especially in the United States. Prices still haven't taken their full hold of consumers pocketbooks yet."

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For more information, contact;


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

Not much change in prices expected this week
Will an Icelandic volcano engineer a price collapse?

Media release

Conception Bay South, NL, April 20, 2010- Consumers in Newfoundland and Labrador will not see any big changes in fuel prices this week when the PUB adjusts prices this Thursday. That’s according to George Murphy, group researcher for the Consumer Group for Fair Gas Prices.

“All the numbers are down, but by tenths of a cent in all cases. I expect a drop of two tenths to heating and stove oils, down by four tenths to gasoline and a drop of a half cent to diesel prices,” Murphy said.

Distillate prices to collapse
Consumers could see the beneficial effect of a volcano in the markets, but the oil company Vitol, according to a Bloomberg news story, is trying to prevent a break to consumers at the same time. The longer the volcano spews ash and cancels flights, the more likely a collapse in prices. However, while jet fuel inventories have increased because of cancelled flights in the volcano cloud regions of Europe, Vitol is attempting to store its jet fuel in a tanker until jet fuel demand increases, and when the cloud of volcanic dust dissipates.
“The last time we saw a drop in demand of jet fuel was immediately after the attacks of 9-11 and that saw a drop in consumer demand for jet fuel and other distillates that brought down prices to consumers. Back then, refined product was still flowing freely in the markets. This time, things are different with Vitol artificially removing jet fuel from the markets just to manipulate the price and prevent its collapse. Jet fuel is also an important winter fuel for the winter heating blend in Newfoundland and Labrador, as well as other cold climates. What we have here is a company willingly manipulating the market conditions to help support the price simply by leaving this product in storage.

The newswires are alive with the sound of the airlines complaining about being in a ‘no fly’ situation, but how much of that hue and cry is also being influenced by Big Oil? Is Big Oil influencing government ‘no fly’ restrictions in order to prevent the collapse of prices? In return, are passengers being put in danger by the airlines and Big Oil’s pressure to return to the skies?”

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For more information, contact;

George Murphy
Group researcher/Member

Update #2

All numbers are up...

One more day of numbers to get and here's what I have...

• Heating and stove oils up by 1.92 a litre.
• Diesel up by 2.7 cents per litre, and...
• Gasoline up by 6.3 cents a litre.

Yes...

Going to be a line-up at the pumps again Wednesday night...

I'll be back in here sometime after eight tomorrow night with the final but don't expect to see much change...

Regards,

George

Will prices spike this week?
Numbers show interruption a possibility

Media release

Conception Bay South, NL, June 10, 2009- The rise in oil prices this last week may leave a very sour taste in the mouth of consumers, that’s according to George Murphy, group researcher with the Consumer Group for Fair Gas Prices.

“I’m seeing a steady rise in the price of oil and its related commodities and that doesn’t bode well for consumers. While some numbers are close to my margin for error, I’m putting out a recommendation that we all err on the side of caution this time out because of the volatility of the markets these past few weeks. I’d much rather I was wrong more so than right sometimes,” said Murphy.

What consumers can expect this Thursday
“Numbers show large increases on the way. Heating and stove oils are expected to increase by 4.37 cents a litre, diesel by 4.7 cents a litre and gasoline by another 4.9 cents a litre. My actual on gas before the addition of taxes shows a 4.17 cent a litre increase, so that’s why the call of ‘erring on the side of caution’ in this case. The margin for error would bring it below the 4.17 cent a litre margin and hence, no increase this week. The possibility of an increase however, is much more likely than not.”

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For more information, contact;

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

Update #1

Price increases coming

I'll be posting more on this tomorrow night when all the data is in, but for now, it ooks like price increases are coming.

Here's what I have so far, thirteen days out of fourteen available days data:

• Heating/stove oils up by 1.48 a litre.
• Diesel up by 1.6 a litre, and...
• Gasoline shows up by close on a penny.

A few notes for this period:

• Canadian dollar has gained by six cents against its US counterpart.
• Refiner capacity has increased to 85 per cent from last week's 83.7 per cent.
• Consumer demand for distillates measured down by 9 per cent from last year.
• Jet fuel demand down by slightly better than nine also.
• Demand for gasoline is 4/10ths of a per cent below last years levels.
• Crude stocks are almost 50 millionbarrels more than last year for the same timeframe.

More tomorrow like I say...

Regards,

George

OPEC ideas with oil prices might change your mind

If the Saudi Arabian oil minister is right, and OPEC succeeds in jacking up oil prices well above the July, 2008 record of $147 US a barrel, what would you think?

Good for the Newfoundland and Labrador treasury?

Good for the environment?

Just the other day, a CBC news story quoted Ali al-Naimi as saying that oil prices could surpass the record by the year 2012. In a nutshell, a boon for the OPEC nations that comes with much trepidation and concern for the consumers in North America and indeed, worldwide.

Consider this...

As oil prices hit the record of $147.23 a US barrel last July 7th, consumers were also facing the elevated price of heating oils that hit close on $1.24 a litre. The record heating oil price came close to killing the local heating oil industry here, leading to some radical changes in the ownership of the local dealers. Some retailers sold out leaving the industry here dominated by big oil rather than being influenced by the mom and pop operation.

If OPEC succeeds in driving prices in excess of the old record, will OPEC also succeed in killing the heating oil industry? Will we see an enforced conservation because people simply will not be able to afford to buy heating oils?

What of the affect on gasoline or diesel prices?

No doubt that pricing for refined commodities would hit the roof. The fact that OPEC is even of this way of thinking is both alarming, and a foreboding of the possibility of things to come if you're a heating oil user.

I don't think there's any consolation in OPEC's way of thinking and the provincial treasury simply would not be able to keep up even though the treasury would like the influx of cash. The reality is that OPEC is stepping on insecure ground and it's actions like driving up the price of oil could do more to impact demand by the consumer.

They could end up sshooting themselves in the foot...

But really...Isn't it time that Canadians insulate themselves from OPEC?

Your thoughts?

Slight changes coming for fuel prices
Gas is up a little, distillates showing down

Media release

Conception Bay South, NL, April 21, 2009- Consumers won’t see too many changes in fuel pricing when they are set this coming Thursday morning by the Public Utilities Board, that’s according to George Murphy of the Consumer Group for Fair Gas Prices.

What consumers will see this week
“Numbers haven’t changed a great deal over the past two weeks. The markets are at an impasse as it weighs demand against bad economic news. It’s almost like everyone is waiting for something to happen and nothing is”, said Murphy, researcher for the consumer group. Gasoline shows an added 8/10ths of a cent up while the distillates are down. Stove oils are down by 1.26 cents a litre and that could be the way of heating oils. Diesel is also set to drop by 1.2 cents.

Watching Marine Atlantic
“I’m keeping a close eye to the marine fuel numbers as they come in. They are now hanging close to where they were back in 2005, which was the year previous to any added surcharges on passenger fares. With the drop in distillate demand in recent months, it’s going to be interesting to see what Marine Atlantic will do even though we still have to go through another two months of market trading before they come to a decision on adding fuel surcharges once again. In the near term, I don’t feel there will be an increase forth-coming in June as the bad economic news does not provide that upwards pressure to pricing.

Focus off distillates
“Consumers should expect to see a gradual decline in stove, diesel and heating oil prices for the next few weeks. Diesel, an important transportation fuel, will still be susceptible to some chance of upward movement, particularly if refiners continue to cut back on capacity. We have more to fear from inventory draw-downs on gasoline that will help stabilize the price, if not increase gasoline prices slightly in the weeks leading up to the US Memorial Day holiday. We’ll be able to make a summertime prediction on peak gasoline prices by then.

OPEC to meet again
“OPEC has set its next meeting for May 28, 2009 in Vienna. The group will meet again to discuss the current economic situation and talk about the possibility of further cuts to production. It may all be for naught. Figures from the International Energy Agency show that OPEC compliance with its own self-imposed quota has been weak as of late. The group produced almost 770,000 barrels a day more than its 4.2 million barrel cut over the last year. The numbers are even more telling when last weeks report from the US Energy Information Administration reported a good build in crude oil inventory alongside draw-downs of refined products. We could be on the verge of another collapse in crude oil prices if we see more increases in crude oil inventory and continuing weak compliance with quotas.”

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For more information, contact;

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

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.”

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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 drop in prices coming, but...

From the look of things here in the nest in CBS, it certainly looks like we'll be looking at another round of drops at the pumps when the Petroleum Pricing Office sets prices again at the regular interval.

So far, five days of data are showing diesel to drop by 5.6 a litre, gasoline down by 4.5 and heating/stove oils to drop by an important 4.53 cents a litre.

I'll be cautious on this one. OPEC is meeting in the wings of the latest round of price drops to come and I expect them to make substantial cuts to production. Maret-watchers are looking at OPEC to cut production by a million barrels per day. I'm betting on them cutting 1.5 million as they've already cut some production. Iran has already reduced daily output to 3.7 million from 4.3 a day and Saudi Arabia has also reduced ahead of this so-called "emergency meeting".

While not necessarily true that any cuts would help to stabilize the price of oil somewhat, they are facing the prospect of a larger worldwide economic recession and they want to prevent any kind of a glut that could help crash the pricing of oil to them.

Expect an OPEC announcement as early as Tuesday on future cuts. If that's the case, it might be the last of the price drops we'll see barring any real collapse in the North American or European economy.

Why am I crossing my fingers?...

Regards,

George

To keep you up to speed...

Just to keep you all up to date on what's going on with prices...

Hold off on everything.

Heating and stove oils are showing seven cents a litre down, Gasoline is down by 8 and diesel is showing 5.8 cents a litre down as well.

With two more days to become a reality, I would expect that all fuels will fall under the guise of the confines of the interrupter formula and all pricing should be down AT LEAST that much as of Thursday.

I'll be cautious though, as there are still two more days data to get yet.

Stay tuned...

George

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

Financial crisis deepens, recession fears grow
Prices for petroleum products to drop on Thursday

Media release

Conception bay South, NL, October 6, 2008- The price for oil continues to drop in concert with the ongoing financial crisis worldwide and that will result in some pricing relief to consumers this week, that’s according to George Murphy, group researcher for the Consumer Group for Fair Gas Prices.

“While there is a strategic withdrawal from the commodities markets, traders have also been pulling out of the oil markets and that means a drop in the value of crude oil and its related refined products. Thirteen days data out of fourteen are now showing that gasoline pricing will drop by close to six cents a litre on midnight Wednesday,” said Murphy.

“Heating and stove oils are projected to drop by close on 2.2 cents per litre while, diesel pricing is forecast to drop by 1.7 cents per litre. I expect that, in the next couple of weeks, if the economic slowdown really kicks in, then diesel users will start to see some more solid drops, more substantial that we have been seeing as of late. As heating and stove oils are also part of the same distillate group of fuels, we’re hopeful that this may carry over to bring further relief to heating oil users.

“We have noticed that the Canadian dollar has lost a lot of ground against the US greenback in recent days, losing something in the order of seven cents against what it was two weeks ago. That alone has cost the consumer at least a nickel against the drop we are seeing. We should be looking at eleven cents down at the pumps. The drop in the dollar has also cost Canadian consumers as much, if not more, and we have no recognition that we have a problem with the Canadian economy. We’re told that the economic fundamentals are strong. We have the proof here that they are not. Some leaders really need to get their head out of the sand.

“We know that there still should be an ongoing concern that OPEC will step in and start to support the price of oil. I would be deeply concerned with winter heating oil pricing if there are a round of cuts. Any support of oil pricing at this juncture now means trouble for the Canadian consumer with the dollar slipping as it is.

“The real news this week in oil doesn’t come from the facts of Nigerian violence or ongoing promises of supply disruptions. Nor does it come from the fact that inventories of gasoline and crude oil improved. It comes from the fact that traders artificially inflated the price of oil in the first place and now, with the collapse of the financial markets and the promise of recession coming from the major Canadian banks, everyone is going to get burned. We may be seeing some price relief but it is far under what the markets should be really doing here. The failure to support the Canadian dollar at this time of crisis is the recognition that Canada is too reliant on one industry, that being oil.”


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UPDATE: All data in now shows 2.43 down on heating/stove oils, 2.0 down on diesel and 6.3 down on gasoline, all by the litre of course!


For more information, contact;


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

Does anyone understand the Green Shift yet?

Really...

I'm not the world's greatest environmentalist but, in an effort to understand the Green Shift, one is going to have to take the initiative to find out if there is a financial benefit to the "shift". I guess the secondary thought in all this is that, if you have to think about it, you're probably not in tune with any environment concerns that pop up in the news.

Maybe some of us simply don't care anyway...

My house and the Green Shift"

Either way, the Liberal Party has come out with their "Green Shift" and, in an attempt to understand what it will cost my household, I used their calculate to total our benefit. I them used a handy online carbon footprint calculator and got a good idea of what the proposed $40 per tonne carbon tax would costs my family.

The results?

Based on an estimated $49,000 per year total family income, according to the Green Shift calculator on the Liberal.ca website, my household would receive an annual benefit of $2090.00 per year.

According to a handy, carbon calculator I found online, I would be taxed, at $40 per tonne, or $458.68 per year. That means our household will benefit by $1631.32 a year.

As a sideline, because I know a lot of people are concerned about being "nailed" by carbon taxes on heating fuels, I also did a calculation based on 3000 litres a year of heating oil. It added an extra 1.146 tons of CO2 emissions and, thusly another $45.84 annually to my expenses.

Now, here's what I didn't like about my introduction to the Green Shift program...

When I went to a meeting held in Mount Pearl a few weeks ago, I asked the question about how the government thinks that costs associated with carbon would not be passed down to motorists. At the meeting, Bob Rae told us all that there would be tax breaks to the oil companies for the retrofit and purchase of equipment that would be used to reduce the impact of CO2 emissions. If anyone thinks that the costs associated with making things a little bit greener at the refinery is not going to be handed down to the consumer in the form of higher prices for gasoline, he's living in a dreamworld.In this case, it's Mr.Rae. He came here to give the right message but screwed the pooch on it...

Ahem...

I have a problem with granting tax breaks to Big Oil at a time when they are making huge profits off the backs of consumers who can't afford the prices they are being charged yet, have to buy because they need it. The Liberals are going to have to try and explain that one. We're already on an "enforced" reduction in greenhouse gases...

The second thought I have on the issue is that, while I may be able to afford to take a hit "up front" with carbon taxes, the Liberals are going to have to promise to take the hit "up front" to prove to the consumer/taxpayer that this is a good thing-especially for those people on a fixed or lower income like seniors. They will need the money up-front just to help pay the extras that the Green Shift will put on them. If you're going to start taxing heating oil in year one of the carbon tax plan, you're going to have to provide everyone with "an advance" to get them over the hump of extra taxes on heat. Again, we're also going to be dealing with an added tax on heat which, as far as I am concerned, should never be. Consumers now are being forced to conserve on heat because they can't afford to pay more for what they need! The product price itself is forcing a "Green Shift" and we already know about the GST charged for heat...

It should have been a different "Green Shift"...

Canadians recognise the fact that we have to reduce our carbon footprint I think, but why did we have to go this way first before making an attempt at introducing other viable energy options that wuld compete against the carbon causes? Why doesn't one government do an assessment of Canada's energy needs for the future, in the form of a national energy plan, and introduce that as a "competitor" against the use of carbon-causing energy producers now? In other words, while heating oils are a cause for carbon emissions, why not introduce cheap electricity to encourage the consumer to choose that form of energy to keep warm rather than use petroleum products that are artificially supported by NYMEX investors?

Here's my reasoning and, some might even think it's nuts...

Let's take Churchill Falls...

If the idea is to make available cheaper energy and cleaner energy, is there none more cleaner than hydro or wind power? If the government were to give the province a loan guarentee to ensure the availability of more electricity to the North American grid, would it not then become a major player in keeping down electricity costs elsewhere in North America? Is the government going to tell us that an National Energy Plan that would include a Lower Churchill project would not be sold to the people of Quebec if the Quebec consumer was told, and it was proven, that their electricity costs could help break the OPEC dependency and that they could make the switch from oil generated heat to electricity? Would the Lower Churchill help in greenhouse gas emissions by taking some of that same electricity that is oil-generated in Holyrood offline and shutting down the world's sixth largest emitter of CO2? Would heavy investment in wind generation or tidal generation help to reduce the Canada carbon footprint? I say 'yes' and I think it's high time that this country takes stock of it's abilities when it comes to being "carbon free". We need a Green Shift alright but, we need it on a national perspective as well...

What we need is a "natinal energy inventory" done. A 'Where can we get it', 'the benefit to the consumer and industry' and a 'for what costs' type of program...

Numbers this week

Speaking of pricing, data used to make predictions on pricing movements has been weak the last two weeks and there is simply not enough to make a prediction that will stick. My sources are starting to dry up a little I think. I'm working on some other methods that I hope will come to fruition so, stay tuned. Numbers that I do have show a modest drop in heating oils of 1.7 cents and no change for gasoline; that's with a bare seven days data out of fourteen needed.

To find out your carbon footprint, go to www.carbonfootprint.com

To use the Liberal Green Shift calculator, go to www.liberal.ca

Summary

People are going to have to make up their own minds about the Green Shift. I know that, for the information I have, there appears to be some financial benefit to our household against what it program is initially intended for. We have to do something to protect the environment but, it also appears that there is only one party with some sort of a plan, as problematic as what it may appear to some...

Hope all this helps!

regards,

George