Numbers for Thursday, October 15, 2013

Hi to all,

Here’s what I have for Thursday’s price changes:

·         Heating and stove oils to increase by 1.17 cents a litre.

·         Diesel to increase by 1.4 cents a litre, and…

·         Gasoline to increase by 2.5 cents a litre.

·         Keep in mind that my heating and diesel numbers may be off slightly with the advent of the winter heating blend which includes 75% jet fuel in the mix. I hope to have the jet numbers worked into the mix by next week.

Market highlights

·         The clock is ticking towards the US debt ceiling. Some international credit agencies are now warning of a possible downgrade in US credit ratings as a result of the debt ceiling dispute. The debt ceiling dispute promises to disrupt the US economy if it fails to raise the ceiling debt-load.

·         Bloomberg has put a story up that says to expect Brent crude prices to drop below $100 if sanctions against Iran are lifted. Currently, there are ongoing discussions over exposure of Iran’s nuclear program, which is how initial sanctions ended up being placed against the Middle Eastern country. If sanctions are lifted, it could add almost 3.5 million barrels a day into the world system.

·         The United States Energy Information Administration has also been a victim of the stand-down between the Democrats and Republicans over Obamacare. While the Republicans are looking for concessions in the filibuster, Obama is not bending to their demands, which has cut off government salaries in the process. As a result, there is no inventory data being released, leaving lots of volatility in the oil and gas markets, not to mention some wiggle room for speculators to maneuver.

That’s it for this week!

Regards,

George Murphy

Twitter: @GeorgeMurphyMHA

Numbers for Thursday, October 10/13

Numbers for Thursday:

Heating and stove oils up by 1.18 cents a litre with Diesel showing an added 9/10ths of a cent on a litre.

Gasoline shows a very modest drop of just a half cent on a litre.

As the numbers show, oil stayed relatively steady over the last week, in spite of the US government shutdown. It was anticipated that off-work government workers and a drop in spending would affect the oil markets, but it certainly hasn't shown itself yet.

We'll see what happens for next week.

George

Twitter: @georgemurphymha 

Price changes for Thursday, October 3rd, 2013

Hi to all,

Here’s what I have for Thursday’s price change:

·         Heating and stove oils show no change to prices.

·         Diesel shows just 2/10ths of a cent down.

·         Gasoline shows a small dip of 6/10ths of a cent a litre.

Market highlights

·         US government shutdown last night has no effect on this week’s numbers, but an extended shutdown will most affect prices downwards starting as early as next week.

·         Bloomberg predicts an increase of 2.5 million barrels this week with a total refinery utilization of 89.5%

·         Thaw in US/Iran relations drives oil prices downwards. Iran sanctions will add oil capacity to the markets if sanctions are lifted. Contingent on Iran stopping its nuclear program.

·         Survival of Come by Chance refinery contingent on lower prices for low gravity crude. If prices drop for heavy crude, refinery stands a better chance of survival. Lower crude acquisition prices part of the problem of losses to the refinery’s bottom line. If we lose the refinery, lack of competition could mean higher prices for consumers in the province with having one refinery in Atlantic Canada being a source of supply.

That’s it for this week! Back on track I hope!

Regards,

George Murphy

Twitter: @georgemurphymha

The Power of Open Line...

A funny thing happened…

Numbers down again this week

Hi to all,

I’m back!

I’ll be the first to tell you to never underestimate the power of an Open Line show!...

A couple of weeks back, I had considerable trouble finding a new and timely source for my pricing information. In telling radio show host, Bill Rowe about the problem, a father asked his son, a Newfoundlander working in New York for an energy information firm, if he could help out myself with my predicament. As it turns out, the son working in New York gave me some direction in getting to my new source of information!

Small world it is!

I’ve been working up new numbers over the past two weeks and I feel that there’s enough stability in the numbers that I can “go” with them. Hence, I’m back in business!

Thank you to the listener of the show that day, and thank you New York!

In the numbers
Turns out that I have all seven days data as well in a timely fashion as well, so, without further ado, here's what I have for this Thursday's price changes:

Heating and stove oils down by 2.24 cents a litre.
Diesel shows a drop of 2.5 cents a litre, and...
Regular gasoline shows a drop of 3.1 cents a litre.

Market highlights

·         Besides the fact that Syria will turn over it's chemical weapons, negating (for now) a possible strike by the US, there's a bit of a thaw in US and Iranian relations that is also playing into the markets. Hence, some added downwards pressure for all fuels.

·         Canadian dollar continues to remain relatively stable against the US greenback, averaging about $1.03

If we lose the North Atlantic refinery…

This would be a threat to consumer pricing on a couple of perspectives. We have already lost the Dartmouth, NS Imperial refinery that closed a couple of months ago. With the possible closure of North Atlantic, that would leave the province heavily dependent upon the Irving, new Brunswick refinery as a single source of supply. That leaves us as consumers, vulnerable to swings in price costs, particularly for added shipping.

                It also leaves Canada with one refinery in Atlantic Canada, and that much less refining capability. That’s not a good thing for the country in the event that the Irving facility has to shut in for any length of time. Our energy security depends on it, and consumers depend on cheaper products produced here, rather than see them shipped in. No doubt, it will impact consumer prices somewhat.

                It could affect the offshore/onshore industry. Remember that we have a lot of crude offshore that is not exactly what’s wanted in the markets right now. Hebron crude oil will need to be refined in a facility unlike that which we have now. If the refinery here can’t do it, I feel it will devalue the cost of Hebron crude in the markets as it will take an added expense in getting that type of crude to another facility to process it.

                I don’t believe that the price of “dirty” crude will remain high. The advent of lighter oils availability and desirability will lower the price of crude oils that are acquired by facilities such as North Atlantic. Indeed, it may very well be part of the reason why we’re seeing a partial thaw in US/Iranian relations. Light oil has put some pressure on OPEC countries to respond to the threat of light oil. In other words, there may be hope for the refinery yet. In the least, I believe it can survive.  

Of note…
Numbers may be off slightly as a result of working up my new averages. You technically need seven days to make up an average for the week to play against the week previous to account for accuracy. Last week’s data to compare against only has five days of data, but I went with it anyway for "notice" to everyone which was important in making your purchase decision, especially for heating oils!


Regards,

George Murphy

Twitter: @GeorgeMurphyMHA

Prices for Thursday, July 25, 2013

Small break at the gas pump

Distillates still continue upwards

Media release

St. John’s, NL, July 23, 2013- “It’s almost too lousy of a decrease to talk about, all that considering the root that consumers received from market investors last week, But if you use gasoline, you might even welcome the drop in price, even if it is just a penny. For distillate users of heating oil and diesel fuel, the news is a little different.” That word from George Murphy, Member of the House of Assembly and group researcher for the Consumer Group for Fair Gas Prices.

“While most commodity prices remained relatively steady this past week, the Canadian dollar gained a little ground against the US greenback in trading, picking up a little over a cent. That resulted in a small drop in gas prices, but wasn’t enough to turn away the prospects of another increase to heating, stove oils and diesel fuel prices. It’s beginning to be painful to watch heating oil prices rise, not to mention the spectre of rising diesel fuel that can burn consumers in higher transportation costs which will result in higher prices for food.”

“Most seniors in this province just received increases to their seniors benefits ranging a massive $2 increase to their cheques. That’s not enough for a litre of milk, let alone look after the rising cost of heat this winter, if prices don’t retreat-and retreat fast. How are they going to look after themselves? This trend is spelling trouble.”

The numbers

Here’s what I have for this week’s price changes:

·         Heating and stove oils to increase by another 1.17 cents per litre.

·         Diesel fuel to increase by 1.7 cents per litre.

·         Regular gasoline to drop by 1 cent, and…

·         Reformulated gasoline shows just a half penny down.

Incidentally, the record high for heating oil prices was reached in July of 2008 when heating oil prices briefly hit $1.23 a litre before collapsing before heating season began. Crude oil hit $147 US a barrel that same week, part of the reason for the massive hit to heating oil prices.

-30-

For more information, contact;

George Murphy

Researcher

Consumer Group for Fair Gas Prices

Twitter: @GeorgeMurphyMHA

Ok Big Oil...This isn't funny anymore!

Consumers to take another hit at the pumps

Heating rises for the fifth week in a row

Media release

St. John’s, NL, July 16, 2013- Consumers in Newfoundland and Labrador will see another jump in prices at the pumps when the Public Utilities Board adjusts prices this week. That news from George Murphy, researcher with the Consumer Group for Fair Gas Prices.

Heating up again

“This latest expectation of another increase really hurts the consumer. We’re looking at another increase to heating oil, which miniscule, still adds to a high heating price starting point when, traditionally, heating prices have been dropping. It could be a very cold winter for some out there.” Murphy said.

Gasoline up to another high

“To add to the consumer, add another increase to consumer gas prices which have reached the second highest level since 2008 when oil prices hit a record $147 US  a barrel before the late July collapse in prices that year. Consumers could be looking at another 4.6 cents a litre at the pumps when they wake up on Thursday morning.”

In the numbers

Here’s what to expect with the Thursday morning price change:

·         Heating and stove oils are expected to increase by 23/100ths of a cent a litre.

·         Diesel shows a drop of just 1/10^th of a cent. No change here with my margin of error of three tenths of a cent on a litre.

·         Regular gasoline shows an added 4.6 cents a litre, and…

·         The reformulated gasoline blend shows an added 6.3 cents a litre at the pumps.

Not fair to consumers

“ in spite of another record drop in oil inventories, we’re still at record levels of oil inventory on hand. What really plays into the latest increase falls back on the massive draw-down in inventories last week, matched with a high refiner capacity number that saw almost ninety three per cent of refiner capacity taken up. That is a signal of increasing demand from consumers, and until we see demand drop, we won’t see any relief at the pumps unless inventories of oil and gasoline increase again. That seems to be the word on the street.

What we’re not hearing from Wall Street is the effect of these high prices on consumers that can send any economic recovery into a tailspin. They remain ignorant of the facts that we simply can’t afford high prices. That should be making investors retreat from oil, but they’re not…yet.”

 Prices rising

Here’s more…for the various changes for roughly the same week all back to 2007:

July 19/12 …$1.31.6/Lt

July 14/11…$1.33.1/Lt

July 15/10…$1.08.5/Lt

July 16/09…$1.05.4/Lt

July 17/08…$1.49.3/Lt

July 19/07…$1.16.4/Lt

Chinese GDP less than expected

It will prove to be a sore test for the government of China in getting gross domestic product up again to world expectations in the next little while as GDP has not kept up with falling demand for Chinese products. What may help China in the long run may be expectations of a world economy that shows signs of picking up speed before government makes any moves to improve its own economic output, and that’s where Chinese challenges lay. Before government there makes any moves, the changing dynamic of the world economy may make it easier for the Chinese government to be “hands off” for now, before it may make any rash decisions like increase interest rates that may slow things down further. It’s “wait and see” on the Chinese economy and for any further increases in oil prices for now. Gauge that with an increase to other worldwide consumer spending, and we may not be out of the woods yet. Will Chinese manufacturing keep up with a world economy picking up steam?

-30-

For more information, contact;

George Murphy

Researcher

Consumer Group for Fair Gas Prices

Twitter: @GeorgeMurphyMHA