 鲜花( 98)  鸡蛋( 0)
|
Gas prices are rising while crude prices are falling. What gives?3 D7 I Q/ z8 M) p. [0 K8 G
Published: Friday, January 16, 2009 | 5:11 PM ET
T; J+ y, H1 {Canadian Press NewsItem/NewsComponent/NewsLines/ByLine4 l# }$ d/ u) T2 \2 m
I( V0 k2 N, `1 w# T) ~CALGARY - With crude oil prices falling, motorists may wonder why gasoline prices are heading in the other direction.
! _3 x2 d7 c, f% o6 x$ V& }: ]2 ?
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.
* Q5 ^/ V: T- q& ?9 I& a
6 r3 v# e" ^) J7 f6 bCalgarians were paying on average 81.5 cents per litre - about a four-cent jump in just one day.
, ^; \) H7 @2 g# n! F X) b8 l P. C7 j
"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.; t& k9 {! z: ]" A( V: \
8 Z6 D+ Y4 c5 P1 ]1 j3 w0 o0 dBut Friday's price is still a welcome respite from the $1.40-level gas many Canadian cities faced during the summer.4 b( f9 s3 o: k
6 u2 p! |' N) h- ^6 M
"I definitely changed my habits in the summer. I was going to go on two road trips, which I did not go on by virtue of the fact that the prices were so high," Lawnikanis said.
% b* c; E' l, K4 E# I. V2 x" Z$ x2 v+ Y: X7 R9 k& A
"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."5 K- I9 C7 K! i! r
8 z: N* d2 p! @3 ]; Z" a: B
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.+ l: B- R" D) d( Y
# x8 ]* }+ i' O- t* T# G8 Q2 Q5 BVancouver, which has higher gas taxes than other cities, has prices of 94.7 per litre, up from 87.5 a week ago.
) L$ Z) P. _+ v& b: N0 E$ q0 I) w9 }+ D$ z7 y8 \$ O
The price of crude oil, the main ingredient in gasoline, has been dropping steeply since it's peak of $147 reached in July.- |9 I: |) E. v" U/ Y! m% O6 t/ j5 R
3 e# g* f% X5 i# sThe February contract for crude oil settled at US$36.51 on the New York Mercantile Exchange, down from more than US$50 a barrel a week ago.6 [% }/ K' k# k
5 r$ M9 s1 k/ W7 g+ |4 E"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.
0 s* Q) a8 V7 Y; U( h0 \2 _9 X7 ?: L' b
Industry players would say they have to account for transportation, marketing and other expenses - not to mention taxes, which vary from province to province.
8 P* j; J% S& A9 C4 A1 ~" X/ I2 B8 d5 w
But those oil companies - private-sector players in a free-market system - also want to turn a profit.: A- F/ Q3 p% e: ^, y
0 D8 D4 Q; R2 v"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.
* l* c( B8 _! `7 L1 l; l
: y {. e2 h, l; T9 [, ]+ m( y"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.": a* [) ~- }! \, {7 @4 w
2 u: A9 F0 ^& r) z1 }$ CAnother explanation could be that the February contract for crude oil expires on Tuesday, and the contract for March is already significantly higher, settling at $42.57 on Friday.5 o/ I, q" J% c
- Q* g9 F! B6 o# o, y"(The oil companies) might have realized that while prices were low in the last couple of weeks, they knew that there was going to be a correction," Hirsch said.
. U5 M6 e6 Z5 w% ^! C7 c+ H/ r$ _# N# X+ i
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.
; S- k6 [0 Z$ Y0 H, g$ R) y( T
+ x' V. H; ?: W9 e6 B" |"I'm not seeing a lot of strengthening in crude oil prices over the next six months," he said.
& P- u N, P. o ^ t D" T' @% ^# Q0 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.") A; X# x$ t" R7 {" R# r2 c
+ l% |( I. Z% ]% q( I- V0 m
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.
$ k% S3 s4 q$ A5 X) y0 Y8 X- b4 Y
"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.; J& H0 S8 J) V$ i0 S2 `. P) a$ N1 w
$ j- w) q. a5 N4 Z) l+ p& Z"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." |
|