Jamaica Gas Prices

Jamaican motorist can breathe a little sigh of relief as the ex-refinery price of 87 and 90 Octane decreased by $0.27 while the price for Diesel increased by $0.05 . The decreases still does not bring the prices below those ex-refinery prices of two weeks ago but right now any decrease is a welcome one.

Diesel most expensive fuel

Diesel is not the highest price fuel of the three used by Jamaican motorist. This is mark change from a how thing use to be. Diesel was once touted as the cheaper alternative fuel and Jamaicans were once encouraged to look at purchasing Diesel-powered vehicles. Despite the increase the fuel economy of Diesel engines still make those vehicles an attractive alternative.

On the gas prices scene, the thing that Jamaican motorists will have to look out for are the service stations that decide to actually reduce the prices and how quickly they will do so.

There was a slight increase in the ex-refinery prices announced by PetroJam this week. The prices of 87 Octane and 90 Octane increased by $0.38 while the price of Diesel increased by $0.33.

This was expected as despite the fact that there was some retreat in Oil Prices this week, a barrel of oil still sells for over US$90 per barrel.

Motorist in Jamaica will be thankful for the retreat and will be hoping reduced prices soon.

This week Oil Prices has gone into somewhat of a retreat  falling as low as $90.50 for a barrel of Oil although it pushed back to the $91+ region late Tuesday afternoon.

The analyst as usual are divided on the reasons but have highlighted the following:

• Weak and Weaking U.S. Economy
• Less likely demand than predicted as a result of the point above
• Profit Taking
• Defused Iran-U.S. tensions
• End of Oil Bubble?

A Washington Times article,  Oil Prices retreat from $100, reports, “Iran has handed over  blueprints key to its nuclear program, meeting a central United Nations  demand and potentially defusing the country’s standoff with the West.” This is good news.
In a Business week article, End of the Oil Bubble?, analysts question whether or not much of the increase was on based on ‘idle speculation’.  A quote in the article  attributed to one Fadel Gheit, senior energy analyst for Oppenheimer Holdings (OPY), says “Oil prices have risen ridiculously high ridiculously fast because of speculation,” and “It has nothing to do with fundamentals. It’s a bubble, and the question is not if it’ll burst—it’s when?”

Since trading began this week the price of oil has been inching ever closer to that US$100 per barrel mark. In trading yesterday, the price per barrel of Oil crossed the US$98 per barrel mark. This does not spell good news but by now we all know that. We will have to get use to living with the reality that the price will likely not go down significantly from that mark, in the near to short term future.

There are many reasons being put forward for the continued increase in the price of Oil

• The Turkish - Kurdish conflict in Northern Iraq
• Falling USA inventories
• The Impending Winter Season
• Weakening US dollar
• Decreased production in Mexico

The forecasts is for the US dollar to continue weakening against the major currencies such as the Euro and the Canadian dollars and continue recording new lows.

Whatever the reasons, Jamaica and the world has the current reality of high Oil prices to deal with. Its effect is being felt in higher gas prices, higher electricity bills, rising transportation costs and all areas dependent directly or indirectly on this precisous commodity.

Another week, another record as Oil prices take a steady march to US$100 per barrel. Yesterday Oil prices rose to record highs of $96.24. This is just $3.76 alway from the $100 mark.

The factors affecting the continued rise in the price of Oil include, declining United States inventories as we approach fall and the winter months, production problems in Mexico continued tensions in Mexico and the expected ,but not sure, increased production by OPEC countries. In the next seven days we will get an idea whether or not OPEC will or has indeed increase production by the shaky promise of 500,000 barrels of Oil per day. As for the other factors there is really no end in site.

With these high oil prices and Petroleum Corporation of Jamaica announcing increases ranging from  $1.96 to $2.54 it is hard to see any relenting in Oil Prices in the gas prices. Christmas they say has come early but certainly not for the Jamaican drivers only the Oil producers around the world.