 鲜花( 98)  鸡蛋( 0)
|
Gas prices are rising while crude prices are falling. What gives?
+ C+ C% A ]9 L9 |3 j" ^Published: Friday, January 16, 2009 | 5:11 PM ET; u) g9 F3 g- x$ P9 Z
Canadian Press NewsItem/NewsComponent/NewsLines/ByLine
: k6 Z$ E. z- r) s! X* l5 T, f8 V8 c, R6 T/ l
CALGARY - With crude oil prices falling, motorists may wonder why gasoline prices are heading in the other direction.% P2 H% y5 `" j l
. V* M7 n! v ?; K7 TThe 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.
: U7 w8 H4 I8 n4 X0 B5 g; a2 l" D) B: [0 @, O2 |. U5 X
Calgarians were paying on average 81.5 cents per litre - about a four-cent jump in just one day.* B3 O* K2 L+ H6 q* n
% s- Q7 ^/ T$ x" N7 K4 y) S
"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.1 w' w+ ]2 {) O6 \
. c# O' d- X1 U8 U! Q; N ^' oBut Friday's price is still a welcome respite from the $1.40-level gas many Canadian cities faced during the summer.
2 i r: l# V& @# @
/ p6 W* x }3 V L"I definitely changed my habits in the summer. I was going to go on two road trips, which I did not go on by virtue of the fact that the prices were so high," Lawnikanis said.% T* s9 M& g- a3 b+ a, W1 k2 u5 m
# Y5 R- n! b# l+ a$ N; e"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."
0 E% C- ]6 S# P$ d7 E0 y0 }" q+ i5 C1 ?: q1 H4 R) i& @# @
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." N* L1 ~6 Q [1 n" s4 o4 W! `
' F1 |9 M. g* j
Vancouver, which has higher gas taxes than other cities, has prices of 94.7 per litre, up from 87.5 a week ago.
* E' U3 Q' W* V7 F9 a0 q+ `% n
; v5 h4 j) T: q U+ I7 fThe price of crude oil, the main ingredient in gasoline, has been dropping steeply since it's peak of $147 reached in July.8 _ {. x% |% t6 h- d) J! ^
( F" m( E9 _: x" {; j: {6 ^& W- ~( ^; G* @
The February contract for crude oil settled at US$36.51 on the New York Mercantile Exchange, down from more than US$50 a barrel a week ago.
6 s; h; B" h6 ], _; L# v- _
; [1 D& n: b5 n" k( u# |( A& T"Crude oil is an important input into the distillation of gasoline. But there's a lot of other factors as well," said Todd Hirsch, senior economist with ATB Financial in Calgary.7 ?8 E& I- x8 }* `' b
( N/ R9 Z5 `$ r) N- p. V
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 m) b9 X$ f W7 h/ ?3 g# E
) q' b1 n4 Y0 P% L' ^0 mBut those oil companies - private-sector players in a free-market system - also want to turn a profit.) Y' r8 h; R* c* K }6 F& F; q
: B4 P* C7 @, k
"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.! i/ k: t3 w. b/ U# \
5 Y$ v4 _ R i/ o& T) L/ o& ?"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."
! t" Z; F/ a! ~/ x, k* Z1 }% f* l" ?. [7 l8 `
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.. p C# F. u! l1 o) X: P! H' C
# O# b. g% m# ]8 W, Z) ^7 {# e"(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.
- _- {. D+ F! I! \) r$ t% G" {+ n1 [" d
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.
6 O u+ T# w* }( f6 }4 r) m* g/ ^% i( i2 R' w6 o4 @
"I'm not seeing a lot of strengthening in crude oil prices over the next six months," he said.
2 H+ C5 C' y5 U5 t5 L% q
3 e( P% ]! o m9 z7 T"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."8 \1 k( Q! r1 d5 ]( Z( Q3 D
1 h8 J& a/ s/ H' C
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.
. o- n* T% t+ ~) G. T9 F# G N* H6 l8 d( I% j+ `- E; g# E% K! K
"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.
& \4 t( U: m6 x R! w, p$ T- w, D, 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." |
|