 鲜花( 98)  鸡蛋( 0)
|
Gas prices are rising while crude prices are falling. What gives?
& D% Q3 ~) R1 P# O0 YPublished: Friday, January 16, 2009 | 5:11 PM ET
! E. B Z6 u2 G6 u" F; aCanadian Press NewsItem/NewsComponent/NewsLines/ByLine! `' N, N4 z) n" g. u8 o5 {& w7 j
/ j* {8 e+ q% D4 s" CCALGARY - With crude oil prices falling, motorists may wonder why gasoline prices are heading in the other direction.
; R2 h+ N9 ?) s4 ^% w* s" R
' W( l, O$ f' t! l6 B9 KThe 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.1 {3 [$ w& w/ I1 j( _3 k
0 X+ ~; Y3 G+ Z: [4 ^
Calgarians were paying on average 81.5 cents per litre - about a four-cent jump in just one day.7 }1 u4 M5 m8 C
$ Q. ~3 V. A% V c1 b# r8 G
"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.& D1 l# E8 W, J1 c# C9 q
! X h, z; L8 N) C- @' l
But Friday's price is still a welcome respite from the $1.40-level gas many Canadian cities faced during the summer., t B& q+ |* V# b- F5 w5 M
4 G& m w# F% t
"I definitely changed my habits in the summer. I was going to go on two road trips, which I did not go on by virtue of the fact that the prices were so high," Lawnikanis said. G- j, r, J+ r) P# h: D
+ ^4 I' c' Z" i8 l, m"Because of the fact that the prices are so reasonable, I've actually taken the liberty to drive more. I've really enjoyed doing more driving."/ C7 v& S$ I9 D% X# |3 v9 x
# O- X; N6 a& } W4 k$ W& aIn Toronto Friday, pump prices were 80.9 cents per litre. On Thursday they were 79.4 and a week ago they were 74.2.
; U" Y: L0 f( ^- q
* b, b" C+ f, N4 MVancouver, which has higher gas taxes than other cities, has prices of 94.7 per litre, up from 87.5 a week ago.( e: G; `6 P/ U, D! P' d
; u% @" `* Y+ X2 c. R' i6 C
The price of crude oil, the main ingredient in gasoline, has been dropping steeply since it's peak of $147 reached in July.
& S! K$ W8 R1 {3 u: ^
( Q& u. ~: \9 f5 U( hThe February contract for crude oil settled at US$36.51 on the New York Mercantile Exchange, down from more than US$50 a barrel a week ago.+ E$ y# h- r) h( M6 u" Q
4 l: d) Q: K0 ~* u"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.; T- l. _& n5 H1 e
- u# h8 }) u/ l! L, E) [! O
Industry players would say they have to account for transportation, marketing and other expenses - not to mention taxes, which vary from province to province.) \. J" _) x; _6 r: Y% ]- t
2 M) ?7 j3 \8 Y6 D Q
But those oil companies - private-sector players in a free-market system - also want to turn a profit.8 j5 J% I% I L$ ^2 i. J
: s( i* ~! ^% }"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.
: o, e0 x0 a1 M5 G+ U# d# I1 P0 j2 L2 g3 V- s _/ g
"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."" D1 L6 s. c" U5 j) b
( n& t. [4 D" W# _' D5 Q& \2 j3 x
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 $42.57 on Friday.' y! l/ B! @) k
' H8 Q. ?6 H3 V# S"(The oil companies) might have realized that while prices were low in the last couple of weeks, they knew that there was going to be a correction," Hirsch said., {3 o/ {1 }9 ?8 Y) ?
' U, y1 {# w* l- N+ K
Hirsch expects pump prices to bounce between 60 and 90 cents per litre over the next few months, but not retesting the heights of last summer. K( b/ t* g8 Q, M+ S; W
' C# Q4 u: L( `8 [4 o"I'm not seeing a lot of strengthening in crude oil prices over the next six months," he said.
: K+ ?& I/ Q& f% H# |( F: ^* Q$ h- c h5 h; T% g1 y: u, N
"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."% w9 B. Y; j1 A3 M. C
& P8 R- k& v1 u/ G& U
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.
: g. x& u1 F; ^! W% d! P! _. J
/ S1 C' y9 ^0 N8 h"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.0 ]) o: n* c; k1 m# ^# z
* R& r- x; {! z8 i"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." |
|