 鲜花( 98)  鸡蛋( 0)
|
Gas prices are rising while crude prices are falling. What gives?
8 F( w6 S7 S5 R3 D, JPublished: Friday, January 16, 2009 | 5:11 PM ET
5 V: Y# {( h- ?/ i8 wCanadian Press NewsItem/NewsComponent/NewsLines/ByLine0 T) h! r& U2 W$ {2 B8 ]! q5 F
2 d% ]: A$ X) \+ j
CALGARY - With crude oil prices falling, motorists may wonder why gasoline prices are heading in the other direction.
! S# N( R6 ?3 Y: j+ x( _& @- T, \' s- O+ v1 T; ]. O) m* b; q" N+ v9 e
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.9 j& k: _3 A$ v
# t; i# E- D7 ^% U
Calgarians were paying on average 81.5 cents per litre - about a four-cent jump in just one day.$ z+ M- i+ O7 |
: y( B" v( A' c"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.& U5 u6 V1 q1 I9 f. L
Q) n* ~2 r, i* q$ gBut Friday's price is still a welcome respite from the $1.40-level gas many Canadian cities faced during the summer.9 F, {" {( ], ~
5 x. [6 i3 q" ?3 P"I definitely changed my habits in the summer. I was going to go on two road trips, which I did not go on by virtue of the fact that the prices were so high," Lawnikanis said.3 S; T; b. P' M( n/ Q4 t) J
, y6 R7 @4 G! E {8 B
"Because of the fact that the prices are so reasonable, I've actually taken the liberty to drive more. I've really enjoyed doing more driving."
( @" M; A' K8 C2 x" |! \- i( {) [) H+ ?% h
In Toronto Friday, pump prices were 80.9 cents per litre. On Thursday they were 79.4 and a week ago they were 74.2.- i" k P+ H$ J( x7 |9 E* R' U2 s
; N+ Q; a+ F6 \# O2 i
Vancouver, which has higher gas taxes than other cities, has prices of 94.7 per litre, up from 87.5 a week ago.4 a, O( F9 R3 x G9 w9 i
1 Q1 `& X6 c" L/ ]5 L" {The price of crude oil, the main ingredient in gasoline, has been dropping steeply since it's peak of $147 reached in July.
3 h5 d5 Y! h2 ~3 m9 S
) r: q: z/ \9 dThe February contract for crude oil settled at US$36.51 on the New York Mercantile Exchange, down from more than US$50 a barrel a week ago.+ l9 B+ k& Y+ o M7 d I8 b
7 R% R0 ^/ c4 U7 Q; n+ c8 ]4 H# r2 a
"Crude oil is an important input into the distillation of gasoline. But there's a lot of other factors as well," said Todd Hirsch, senior economist with ATB Financial in Calgary.
9 E$ j% v/ G4 K- I& i G( `; W% I0 w; ^8 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.4 @# a& I4 x' f
& e' e4 b1 n7 v# l | t6 f, K2 f& g% cBut those oil companies - private-sector players in a free-market system - also want to turn a profit.' S& l1 I' Z7 @" }2 v' w
. | X+ S4 H) W' t; S ], j6 p
"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.
0 a* t/ M' r& O! t5 k; L, r# M5 }2 l/ o/ t5 Y1 ?1 k5 T$ g: P$ d. b
"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 R9 T$ _& `! h; f3 t& M! q9 S5 b7 z- ^9 d
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 $42.57 on Friday.
! q. S) b* |" ]; o. F6 h, o" ?" m& b$ r" l: y& ^2 q
"(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.
5 f6 |0 k7 D: X1 {4 |2 H5 R6 n0 Q. s
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.+ ]9 X0 f7 x- A
9 [$ `2 Y5 W, e/ q$ V# K- a1 i: ^
"I'm not seeing a lot of strengthening in crude oil prices over the next six months," he said.
% r/ S& P% T% [7 W+ t. A3 n3 { ?5 x" Q& D. h
"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."0 z, Z; c5 f) X$ ]) Y
/ A2 b8 f8 b2 T/ h
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.
' B1 h4 w; h) J7 K6 w7 Y7 E, S$ `; e
6 P# c' v7 }' [- Q2 G5 R4 r"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.
t5 D3 V( D: {+ [9 g7 E9 i
6 o3 H' D8 E, h$ K( W7 P) U/ _"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." |
|