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With fuel prices going up up,should Ottawa drop the GST on the rising price of heating fuels like oil, natural gas and propane ?
YOUR FIRST AND ONLY CREDIBLE SOURCE FOR GAS PRICE PREDICTIONS IN CANADA
Gas prices to RISE overnight for Thursday April 24.
The 16 cent a litre rise on average across Canada from this time last year can be traced to 3 factors
1) Money managers, hedge funds (ie- financial speculators) are ignoring supply and demand fundamentals over crude inventories which now stand at 83 year highs (May 1931) and focusing only on the recent draw of inventories at Cushing, Oklahoma’s, WTI’s price hub. This draw – the result of the completion of the southern tier of the Keystone project, now sends crude to the refineries on the US Gulf Coast, where, at the end of the pipe from Cushing, a record inventory (the highest since 1990) now exists. This ignorance based speculative betting is causing refiners to rethink buying hyper inflated priced crude and therefore limiting output by operating at seasonally low utilization rates. The same speculators are reading this as supply limitation or increased demand. Both false signals created by their price distorting bets.
2) The ever present risk to global stability in eastern Europe is lending support to the belief that Russia’s vast energy supplies of natural gas and crude may be affected at some stage down the road. Again these are rumours and suspicions, not positions taken because of actual physical impacts on commodities.
3) Increasingly the disparity between selling our crude to the US at deep discounts, only to have them or Europe ship back higher value added refined product, is making Canadians vulnerable and increasingly, price takers for fuel. Our greater reliance on imports also leads to the devaluation of the Canadian dollar vs. its US counterpart, leading to further price hikes as Canadians elected many years ago to price all our commodities in US terms. That alone explains why half of the increase in gas prices from this year to last is the result of the weakened loonie.
4) A quick check of retail gasoline margins shows that where years of Ottawa’s failure to stop the undermining of true independent gas retailers by their integrated wholesale suppliers/retail competitors, margins have more than doubled. ex – thoughout most of 1990′s retail margins in Toronto were between 0 and 3 cents. As independents succumbed, the retail margin rose to 8 cents, up 2 cents in the last 18 months alone.
New US Study on Ethanol casts more light on its dubious benefits (apart from driving up food and fuel prices)
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NEW – FUEL WATCH
With so much going on in our lives, trying to figure out how to budget isn’t helped by the erratic peaks and valleys of gas prices. So we thought we’d give you, the factors that contribute to triggering price changes a few day before they happen. Feel free to use our forum page to add your own thoughts on what affects the cost of energy, which now takes up about 25% of your disposable income.
FOR THE WEEK OF April 14 – April 17 THE FOLLOWING WILL DETERMINE GAS PRICES LATER IN THE WEEK:
1 – Major Brand oil co’s increase retail margins to 8 cents/litre in Toronto (6.5 cpl 10 months ago)
2 – US Weekly Petroleum Inventory Report – This Wednesday 10:30 am
3 – Strength or weakness of Canada’s Loonie vs. the US Greenback
4 – Energy speculators turning bullish on gasoline as refiners throttle back on production
5 – Tensions over Russians agitators in East Ukraine put risk back on the table
6 – Ethanol shortage caused by winter rail congestion puts the blend at highest price since 2005
7- Chinese market data Wednesday April 16
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