 鲜花( 98)  鸡蛋( 0)
|
Gas prices are rising while crude prices are falling. What gives?
2 K: q& D# c" H6 t2 \( xPublished: Friday, January 16, 2009 | 5:11 PM ET
8 g" J) v7 E( g& r& ECanadian Press NewsItem/NewsComponent/NewsLines/ByLine6 N: l8 K2 C! h% f3 d
, H* w" R) l- [9 k3 F
CALGARY - With crude oil prices falling, motorists may wonder why gasoline prices are heading in the other direction.) F. m v9 ^( g, v, G" O' i) J
' k8 f5 P s" H) ^
The average Canadian pump price rose to around 81.75 cents per litre Friday - more than three cents more than a week ago, according to the price-tracking website Gasbuddy.com.! Q* }2 e& g/ b
- A; l# U$ `8 V" z1 E) @
Calgarians were paying on average 81.5 cents per litre - about a four-cent jump in just one day.
! O- a# o6 F0 u$ P7 V: j, f, i& `2 @+ S4 X# p4 @: V# E5 k
"I don't actually understand it and I do work in the oil and gas industry, so I'm perplexed about it," said Paul Lawnikanis as he filled up his truck at a Calgary Esso station, which was selling gas for 80.4 cents per litre.8 g9 u8 p; m0 ~: B) J3 t- A9 x
+ b1 G) B0 w3 y
But Friday's price is still a welcome respite from the $1.40-level gas many Canadian cities faced during the summer.5 o; y$ R6 ~; P6 u3 l% r* g
' h, v; N. t0 ]5 m, H% k"I definitely changed my habits in the summer. I was going to go on two road trips, which I did not go on by virtue of the fact that the prices were so high," Lawnikanis said.
8 U3 b& V5 B0 }) i3 ~& T* B
& g. j. R* _0 ^"Because of the fact that the prices are so reasonable, I've actually taken the liberty to drive more. I've really enjoyed doing more driving."" I3 k3 n6 O! B. @' ~3 ?
. H3 l( s5 }$ VIn Toronto Friday, pump prices were 80.9 cents per litre. On Thursday they were 79.4 and a week ago they were 74.2.
2 g8 C4 h# A+ D0 f
1 I, j; p. {% O' i1 L) eVancouver, which has higher gas taxes than other cities, has prices of 94.7 per litre, up from 87.5 a week ago.
9 U! O+ f1 }. \' E! S- A' k
: F" H2 j7 a) kThe price of crude oil, the main ingredient in gasoline, has been dropping steeply since it's peak of $147 reached in July.
6 f! [' d5 p7 |2 b( [4 `0 b! M( p# H* W. @! _
The February contract for crude oil settled at US$36.51 on the New York Mercantile Exchange, down from more than US$50 a barrel a week ago.( n# o9 x' N+ b1 w% L) t
- z; I. L) k$ M. a"Crude oil is an important input into the distillation of gasoline. But there's a lot of other factors as well," said Todd Hirsch, senior economist with ATB Financial in Calgary.
7 a0 U+ U3 {4 D3 Q/ u! v
0 V4 ^- c) P3 L; NIndustry players would say they have to account for transportation, marketing and other expenses - not to mention taxes, which vary from province to province.7 Z- D# B( O% q* Z; T! p; L8 Z
' Q$ \+ O% Q0 A+ [) X
But those oil companies - private-sector players in a free-market system - also want to turn a profit.* H% L, _, E; y+ Y$ i* H1 m( |4 ]
P; E3 s# q) c$ C/ s6 I9 N* ~% q3 {"Without question those gasoline prices are going to be the highest they think they can get away with without their competitor undercutting them," said Hirsch.3 E* Z) h- y, @# n+ k3 u! p1 f
N) q/ q2 l K3 E, z& I/ `"They're out to maximize their profits for their shareholders. I don't think there's anything evil going on in them trying to get the highest price. Every retailer in the country does this."
: C x/ h& D/ t' Y+ G, m! |9 X! }+ _; s) u
Another explanation could be that the February contract for crude oil expires on Tuesday, and the contract for March is already significantly higher, settling at $42.57 on Friday.
x- n3 V, W, r$ n/ K* M8 E
, ^4 K. J( l. S! T"(The oil companies) might have realized that while prices were low in the last couple of weeks, they knew that there was going to be a correction," Hirsch said.
0 D# S5 D; l' Q( n" `
$ j4 O# T+ B. X7 y4 c/ sHirsch expects pump prices to bounce between 60 and 90 cents per litre over the next few months, but not retesting the heights of last summer.0 ]" q8 H- M' z. M* b
: A: \4 ]2 K9 M# B2 A"I'm not seeing a lot of strengthening in crude oil prices over the next six months," he said.
$ k. E, ^. @% o) O' ^; U& g8 O8 X5 D% K! Y$ g' n" o& v
"In the next six months I would expect to see gasoline prices more or less in the range they're in now, maybe firming up a little bit towards the spring and summer driving season as demand rises."
$ o) u- R) H( h: \5 R0 C# A: h, n8 d! E0 J6 m$ x" _
But Gasbuddy.com co-founder Jason Toews said he sees gas prices going higher than their current levels because of a slowdown in Alberta's oilsands and expected production cuts by the Organization of Petroleum Exploring Countries.0 y/ P/ w; ]# t
2 N+ u- ]4 q+ O ^0 q+ C"With lower supplies of crude oil in the market it's going to push crude oil prices up, especially if the economy starts to recover a little bit," Toews said.
! c" I9 i8 P) M \+ I& c4 G- v# m( w7 m H
"Once the summer demand for gasoline comes, we're going to see gas prices go up quite a bit from where they are right now. We're going to see a return of a $1 per litre gas for sure and we may even see up to $1.20 per litre." |
|