Update:

Prices to increase again
Refinery outages and political unrest increase oil pricing

Media release

Conception Bay South, NL, May 19, 2009- Consumers in Newfoundland and Labrador will, again see an increase in all fuel prices when the Public Utilities Board sets prices this coming Thursday at it’s regular price-setting, that’s according to George Murphy, group researcher for the Consumer Group for Fair Gas Prices.

“Political unrest and refinery outages south of the border are being mentioned as key reasons why consumers here will see prices increase this Thursday morning. Consumers can expect to see an added two cents on gasoline prices, 2.4 cents on diesel and 2.08 cents a litre onto heating and stove oil pricing this Thursday morning,” said Murphy.

“Rumors are rampant in the markets that there is considerable disruption and loss of life in Nigeria in the delta region over these past few days. Add to that, the fact of several refinery outages and we have the impetus to see prices increase on fears of disruptions again. Even though refinery capacity and utilization rates sit at close to 84 per cent, it seems that the refinery disruption scenario is manufactured by industry and is easily curable and we know that there have been supply concerns from the Niger Delta region for years now. It is inexcusable to see prices increase to consumers with this information!

“Demand figures are, at present close to two percentage points down from last year at this same time-frame. Consumer demand for oil products such as distillates remains low at 14 per cent below last years levels. Jet fuel demand has dropped by almost 11 percentage points against last years numbers and industries numbers are telling us that prices will increase? The information available out there is telling us that consumers in Newfoundland and Labrador as well as the rest of North America are all being taken for a ride this week.

-30-

For more information, contact:

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

How it all worked out...

I guess by the time you all drop in on this note, you will have already heard where the numbers went; mostly up. I guess we dodged a bullet when gas didn't move as I thought it would, but how close was it in the end?

From my media friends at VOCM, I got details of the hit on heating and stove oils and, as it turns out, with seven days now reporting here, I was out by something in the order of 3/100ths of a cent. My final number aloowed for an increase of 7.71 cents. That means that the decrease we all got from the removal of "jet" from the summer mix, was eradicated in one stroke of the pen.

What's worse is that our fishers and transportation sectors got the perverbial kick in the teeth overnight with an allowable 9.2 cents a litre increase to diesel pricing. That's why I say in my releases whenever I talk about the heating/stove oil numbers that "the number may also be pointing the way that diesel will also be going", in this case, UP...

Gas was a little different as the volitility of the markets got to me on this fuel.In the end I had an allowable of 4.1 cents a litre, if you include taxation, or 3.6 without the tax component. The interrupter works on the basis of a four cent a litre movement up or down as measured over seven days.

I usually call my shot with five days reporting so everyone can be a step ahead, particularly when it comes to heating and stove oils and to give the media a chance to report and get the word out to everyone...

My margin for error is 3/10ths of a cent and, with the volitility I figured that I would get the word out on a chance increase in case I might be off just a little; in this case by that extra 1/10th of a cent that would have moved my numbers up to four cents even on gasoline. Guess I "missed it by that much".

Hence, we dodge a bullet for this week with pricing for gasoline still on track for a possible 3.6 cent a litre plus taxes increase coming for next week at the regular setting of prices.

I just hope no one was inconvenienced by my call on this one.

Oh well, it's off to bed and call Randy Simms in the morning!

Sometimes, a tenth of a cent can ruin you...lol

Regards,

George Murphy

Another kick in the personal economic teeth
Numbers warrant an increase to heating/stove oils…Again

News release

Conception Bay South, NL, May 13, 2008- Unless divine intervention sets into the markets this week, and soon, consumers in Newfoundland and Labrador will experience the biggest weekly hike in heating and stove oil pricing that they have ever seen for this time of the year.

“Numbers for heating and stove oils show an allowable 7.4 cent a litre increase coming this Thursday morning as these numbers fall well within the guidelines set for early interruption of pricing, that’s also with five days out of a possible seven days of data needed for interruption to occur. Being a part of the distillate group, there is a possibility that diesel may also get hit.

“Gasoline now is showing an allowable of 3.5 cents a litre but, the way those numbers have been going as of late, it wouldn’t surprise me if pricing did move early. Those numbers are just outside of the guides for interruption but, just by a minimum. There is still a slight chance that they won’t albeit; I’m still hitting the pumps myself on Wednesday night.

“Continued heavy investment in commodities ahead of the dropping US dollar, supply disruptions and the continuing geo-political situation are to blame as they always have been. I just find it incredible that heating and stove oil pricing will increase again, all during the non-demand season. Right now, I am looking at a 95.00 cent a litre cost price where there was a 55.00 cent a litre cost last year for this time period. It’s early but there are the signs of big trouble on the heating and stove oil fronts this winter coming.”

-30-

For more information, please contact;

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

"The Perfect Storm scenario"

Why prices might even crash...

I know...

Seven days showed a 3.9 cent a litre increase and still a decrease for stove and heating oils. Guess they were close...

It made me sick too, just to look at the pump as I drove by. I didn't need any as I topped it all off the night before...

It's my way of putting the screws to Big Oil before they get to do it to me later in the week when I'm back on "w" for "walk".

But, if the storm in the markets has anything to do with it, we just might see a drop at the pumps before the summer driving season hits and we hit the "expected' spike in prices for the summer.

You shouldn't take for granted everything these professional oil analysts are thinking. You might "get use" to what they say and then you'll have to pay the piper.

And that's the reason for this particular post; because I don't take what they're shoving at me for the truth. Matter of fact, I think there's something that the "investor" is not telling you...

If the refining industry is having such a tough time with their refiner margins and oil is becoming hard to acquire because of price, then it must be obvious to the consumer that they are "purposely" keeping capacity down in order to support the retail price to the consumer, right?

If that is true, and prices have climbed to the point that overall demand is being broken and people start to conserve, then that creates a build in inventories right?

Then the following must be true...

Less demand means less need for refined product which in turn means less refining. That would also mean a drop in demand for the raw crude oil product. We have to note here that crude inventories climbed last week possibly because of part of what we're saying here; that crude simply costs too much to buy by the refiner and inventories were allowed to build in the hope that prices may be impacted...

That means there's evidence of an attempt to support gasoline and heating oil prices by the refiner and Big Oil; a "supported" price...

While the price may indeed be supported, there's not a heck of a lot of return for the investment...

What the markets need to see now, or should I say, the consumer needs to see, is the proof that inventory is building and that demand is being impacted. That may bring down the house of cards that OPEC helped create.

We have already reached a point where Big Oil has hit the Law of Diminishing Returns because of rampant investment in commodities like gasoline and heating oils. consumers here in Newfoundland and Labrador have been hard hit this winter with "above normal" heating oil prices. The elderly and those on fixed incomes as well as pensioners, are at the point where they are buying no more.

They now choose food over heat.

I think they like to call it "energy starvation"...

I think that we're going to start to see investors in distillates lose a lot of money...

One can always live in hope...

Regards,

George

Latest EIA survey confirms our thinking

Petroleum stocks down on three fronts this week...

The latest report from the Energy Information Administration today seems to confirm our worst fears; that there is a steady decline in inventories of crude and distillate and that we can expect pricing here in Newfoundland and Labrador to remain around the $1.22 to $1.37 range for the better part of the summer.

As a matter of fact, my numbers are also pointing at the figure of $1.30 at summertime peak this coming first week of July before things moderate. That doesn't include outside factors like Hurricane Syndrome.

Numbers in the report are all down again this week while, refiner capacity is at a near historic low of 83 per cent, a level I haven't seen since I started predicting pricing movements.

See the report from the EIA on last weeks oil inventories here:

http://tonto.eia.doe.gov/oog/info/twip/twip.asp

Here's the kicker though...

In the report, we also see that gasoline demand is also projected to drop as recession factors and consumer fears kick in. Gasoline demand has been dropping so much so, that it is a mere 3/10ths of a percentage point over last years numbers for the same timeframe.

Distillate demand along with jet fuel usage has also remained flat for the past week compared to last years numbers so, consumers can expect to see prices for heating and stove oils start to drop from here on in.

They better start soon!

If pricing fails to fall now rather than later, there is no doubt that consumers again will be paying new records for heating and stove oils next year possibly making heating oils even more unaffordable than it already is now.

See the highlights report here:

http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/weekly_petroleum_status_report/current/pdf/highlite.pdf

In the meantime, don't forget to hit the pumps on the way home tonight. My numbers now show an expected 3.1 cents a litre at the pumps tonight.

You just might want to pass the word along...

Get to the pumps before Thursday

Call your heating oil guy too...

I'll have more on this tomorrow around this time but, from the looks of things, Newfoundland and Labrador consumers will be taking a hit at the pumps and at the heating-stove oil truck level this coming Thursday, February 21st.

Numbers I have from the last adjustment just last week, show an average of 66.06 a litre for heating-stove oils and an average of 59.43 a litre for gasoline.

Trouble with this is that numbers after last Tuesdays set average are all well over those.Each fuel is showing in excess of four cents a litre up and, in some cases, more than the allowable needed to warrant interruption to current fuel pricing.

I'll have more in a posted news release on what you might expect to see tomorrow, but after Hugo Chavez's little tirade last week along with a reported refinery fire in Texas this morning and heavy investment in oil and related commodities over the past week, it was bound to happen.

What does this mean to summer pricing?

Gas is supposed to drop during the winter and the increase in heating-stove oils at this time of the year means that we'll have that much more to face dollar-wise next fall.

You just get the feeling that you're going to have less to spend over the next little while...

More increases on the way
Gasoline, stove and heating oil pricing to increase Thursday

News release

Paradise, NL, July 3, 2007- Consumers in Newfoundland and Labrador will get tagged with another round of increases this week as demand for gasoline and diesel fuels pick up for the summer driving season.

“Consumers can expect to see an added 2.2 cents per litre on gasoline and an added 2.92 cents per litre on stove and heating oils. That’s with 13 days out of a possible 14 days to report from. I don’t expect too much change from those numbers after today’s market trading,” said George Murphy, group researcher and member of the Consumer Group for Fair Gas Prices.

“A drop in gasoline inventories along with a drop in refiner capacity has complicated the pricing problem, but what was totally unexpected is the fact that stove and heating oil users will be looking at a considerable increase at the pumps this week. This is the time of year when we see those expected builds in distillate inventories. Last weeks numbers from the Energy Information Administration in the United States showed a considerable drawdown on stocks.

“We’re roughly at a level we were last year on both fuels. My records indicate that the next two weeks will be critical in seeing pricing stay at its present level. Last year saw a rapid increase in spot pricing of gasoline immediately following the July 1st and July 4th celebrations in Canada and the United States. That’s when the heat comes on gasoline spots and people start vacations. If we hear of increases in refinery capacity and its associated pickup in production of gasoline, we could dodge another increase, but right now that’s up in the air. We’ve already hit that range of $1.22 to $1.31 a litre and we could easily hit it again.”

-30-

For more information, contact;

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