 鲜花( 98)  鸡蛋( 0)
|
Gas prices are rising while crude prices are falling. What gives?
- Q3 m3 n3 W8 `) e3 O k) \Published: Friday, January 16, 2009 | 5:11 PM ET( r+ O- x/ p2 e0 L7 A: g% r1 a
Canadian Press NewsItem/NewsComponent/NewsLines/ByLine, l7 P! L; e4 t1 ~1 h
. s5 Q( n6 D- \( a9 wCALGARY - With crude oil prices falling, motorists may wonder why gasoline prices are heading in the other direction.
) ~3 ?: A5 l- o/ X1 N7 N4 D6 ~* U& Z% I9 V8 d. j; M% I# Y) A
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.
" E/ e& `/ v1 O/ j& |. g
( u! \& k$ Q4 `Calgarians were paying on average 81.5 cents per litre - about a four-cent jump in just one day.5 \1 [3 {" ?# r
$ d5 L, c: Y6 q# Z9 P
"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.) [. E& W6 n1 ~
+ x( O4 |$ j( ]6 i2 BBut Friday's price is still a welcome respite from the $1.40-level gas many Canadian cities faced during the summer.
' ^5 D7 M( _8 O: Q \7 h
9 A5 |3 M( P+ Y/ O) U3 ^"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./ a* j; q5 o, ]* ^4 {0 P: H
/ B! W* r- I' q/ z. K' |% [4 a7 G"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."
1 t5 X, v n- {7 {5 r8 ~4 o, a0 s/ c- U5 F1 C# K S
In Toronto Friday, pump prices were 80.9 cents per litre. On Thursday they were 79.4 and a week ago they were 74.2.
1 V+ Z8 T* G# }9 B, C& ]9 d3 F8 a! d
Vancouver, which has higher gas taxes than other cities, has prices of 94.7 per litre, up from 87.5 a week ago.1 [2 h' B7 W2 ?# W0 ]' L, a$ V. e$ k& D( o
% ^! j) w+ |9 a! g* l o2 x6 b* t
The price of crude oil, the main ingredient in gasoline, has been dropping steeply since it's peak of $147 reached in July.3 s h5 g1 ?/ ?' I' ?8 F
* ]2 r1 X2 [, M" b( i2 U3 {4 L
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.) j. y7 i- t7 n# T: Z( d+ b
?1 a* A- i( j3 F! v4 V0 j"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.
! k, ?9 o/ }, Q( K. _8 E; S% ]9 F+ M+ N
Industry players would say they have to account for transportation, marketing and other expenses - not to mention taxes, which vary from province to province.& Y( q2 B& o- {3 I, }
6 V- E2 n6 \ G7 KBut those oil companies - private-sector players in a free-market system - also want to turn a profit.
! F/ c& D* t$ y$ q4 C
* L/ ]! T- U1 g. F- \) o- J6 c"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.
: R# j' g0 R7 U* k _" f: P% C9 Q& Q8 Q) r+ |4 l& v
"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."+ G; n, \! \. `# D4 d& o0 h
7 S( x0 h; }: o! X' nAnother explanation could be that the February contract for crude oil expires on Tuesday, and the contract for March is already significantly higher, settling at $42.57 on Friday.
, |- _1 W$ Q8 t9 J% p" D$ v$ o1 V( u1 i
"(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.
( T. n9 a; n7 ~ N" }" C$ h O& Q7 r4 @
Hirsch 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.
3 j6 o5 h7 O, B$ Q4 E) E' E, C+ G* _/ ^! }6 _$ c; h
"I'm not seeing a lot of strengthening in crude oil prices over the next six months," he said.2 `5 Y, A# z' j# l& J+ m
6 n9 s1 ^0 N8 `* u, o( L"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."
" t6 L" w2 [9 _" Q6 g; Q k5 c* z3 N5 k% U9 r
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.8 V; Z% [ U X* l; K' E
9 D" S. P2 [7 b, }
"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.
' Z5 v: b) a( @. o+ ^* v+ G7 _2 K. p: Q. |
"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." |
|