With the weekends price increases please note the absence of any credible basis on which the prices should rise to this extent. This time last week the surcharge by Canadian refiners over benchmark market prices at New York stood at 5.3 cents – above.

As a direct result of a lack of competition at the wholesale/refinery level in Canada that figure has now bloated an extra two cents a litre to a whopping 7.3 cent rip off which you will have little choice but to pay. This is the price of having an irrelevant competition act headed by individuals whose work in the past has been both to defend and intensify monopolies in other relevant energy market sectors.

Over the next few weeks we will no doubt be treated to a phalanx of experts and analysts who will provide the usual lame excuses justifying higher prices for crude and the price we pay at the pump. These wild forecasts of higher prices are usually linked, blamed, or based on China’s consumption picture.

Putting things in their proper factual perspective – and in accordance with figures provided by the International Energy Agency – global demand for oil in 2009 was approximately 84.9 million barrels per day. Of this number, the United States alone consumes 22% (18.7 million barrels per day) while China remains well behind at less than 10%.

By doing our math correctly, assumptions about China increasing its consumption of crude at 3.6% (300 000 barrels per day) in 2010 pales in comparison to last year’s US decline in consumption of 4% or 748 000 barrels per day.

Logically, there is a surplus of oil which would lead to downward pressure on energy prices generally.  Supporting this as well, US weekly inventory report on crude continues to show that crude inventories are at record highs.

When taking advice from so called analysts and experts, let’s make sure we know who they work for and how it is possible for them to make profit despite market fundamentals. Reforms that would include real position limits on those who can purchase energy products are long overdue.

An article appeared in today’s Toronto Star suggesting that gas prices could hit $1.12 by the end of May. It is difficult to predict price increases in the short-term due to moderate downward pressure currently placed on prices as a result of oversupply in North America and weak international demand – refinery closures notwithstanding. In other words, predictions beyond a few months are extreme conjecture.

This morning’s Bloomberg article supports the claim: http://www.bloomberg.com/apps/news?pid=20601072&sid=a_hBIkq_YPRA