 鲜花( 98)  鸡蛋( 0)
|
Gas prices are rising while crude prices are falling. What gives?
o4 Z4 W2 k1 R! T a$ sPublished: Friday, January 16, 2009 | 5:11 PM ET* ?; @# C) u$ O/ C4 w4 T- I& C
Canadian Press NewsItem/NewsComponent/NewsLines/ByLine- d3 H. w; m. T6 A! x! x4 \; h
2 j9 Y6 P9 P5 d! K; YCALGARY - With crude oil prices falling, motorists may wonder why gasoline prices are heading in the other direction.( ?* E7 x/ k8 E
- Z; e# H" U6 I- |' _; j
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.
) O) g. G7 V/ F( t0 Y. E+ b P" j' {4 Y; X
Calgarians were paying on average 81.5 cents per litre - about a four-cent jump in just one day.
5 V! X* i/ A, {2 G# `$ n
) b/ ]' i! [$ J- e/ F/ `"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.4 L' U8 }9 A2 G: [9 |* t; Q! J
) h& i& X+ Z9 K9 \( o
But Friday's price is still a welcome respite from the $1.40-level gas many Canadian cities faced during the summer." `7 W( f# @ v) D
; Y1 X( s1 ?2 t5 \) F6 `"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.7 ]8 ^# c' z$ F5 d2 u
, ?/ k8 @, Y! D+ s. u"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."
6 o9 M. T& P. O2 B: s- \6 ]* ]1 N! l( l8 {4 u; T
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.! I) y1 L" Q6 m& U
6 F8 I! ^6 \% ~Vancouver, which has higher gas taxes than other cities, has prices of 94.7 per litre, up from 87.5 a week ago." O7 Z. ]( d8 w
0 d. E" q$ X6 y4 f! zThe price of crude oil, the main ingredient in gasoline, has been dropping steeply since it's peak of $147 reached in July.2 R' X3 E9 m6 S& B# C
5 t1 _( e# K9 o# k- y. `
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.: B |# D+ f& n2 }3 ^) p. t
* M: }4 T6 V+ Y; }6 l
"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.
* v7 T+ [% w5 o; i- {0 O) D2 A. u. Y
Industry players would say they have to account for transportation, marketing and other expenses - not to mention taxes, which vary from province to province.
# Z0 E- w& E, b7 `7 R
$ a; S5 Y" Q. X- O, P0 VBut those oil companies - private-sector players in a free-market system - also want to turn a profit.! K7 w0 W8 f4 b$ S K
6 U) Y" T7 s+ e( Z" Q6 \; m: V, z"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.1 {) f C4 B4 L8 J! {$ L& [
$ I& e. R* e' V4 \/ T"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."5 k& n7 _' x3 W7 L) e1 x
0 h2 [7 O) m2 O% }
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 $42.57 on Friday.
3 M- n( x. |, d% j. _% C. @
3 a& L( Z* J2 ["(The oil companies) might have realized that while prices were low in the last couple of weeks, they knew that there was going to be a correction," Hirsch said.
0 _. N, [# x5 P; s; S1 f, \, E% D2 t1 b. z
Hirsch expects pump prices to bounce between 60 and 90 cents per litre over the next few months, but not retesting the heights of last summer.
1 p# Z: L1 H2 j2 c+ _0 R6 g# y! ]- h, X6 K* [
"I'm not seeing a lot of strengthening in crude oil prices over the next six months," he said.
o, |, |9 N* w9 \; ]; `2 [0 [9 S- ?' P& E4 S7 n$ }4 o( i( I5 B
"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."2 k- q4 `( y2 L4 X, l5 Z
H9 _) j0 t5 ]2 z$ U6 y4 |8 R; E% }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.
6 P" j# M, {2 |6 O
4 a5 F+ N2 \: X) [- L3 Q/ N3 A"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.
9 T3 e0 @+ [) G4 @( h, Z; n2 c$ {+ V9 x/ D7 ~/ s! s4 f
"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." |
|