 鲜花( 98)  鸡蛋( 0)
|
Gas prices are rising while crude prices are falling. What gives?
/ }$ a1 ?2 h% U; @4 vPublished: Friday, January 16, 2009 | 5:11 PM ET* C) w: p9 T. p, x$ `4 G! ~
Canadian Press NewsItem/NewsComponent/NewsLines/ByLine! U. S# s0 R; t0 {; _( X
+ Q7 T M/ D+ B T: ZCALGARY - With crude oil prices falling, motorists may wonder why gasoline prices are heading in the other direction.6 n( X. F0 J! L4 X
, _8 o* w' M/ y0 l- v" LThe 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.
" w4 u, c! ]$ O/ N& G i
* p& `% t0 _! |Calgarians were paying on average 81.5 cents per litre - about a four-cent jump in just one day.2 T8 P& g0 \( @
* ?6 Z! s: F: W( V p" I; x+ |
"I don't actually understand it and I do work in the oil and gas industry, so I'm perplexed about it," said Paul Lawnikanis as he filled up his truck at a Calgary Esso station, which was selling gas for 80.4 cents per litre.
' Q: J+ l& ~! ^- ^, B- S$ ]7 R4 d- r! ~( J' }" \9 k
But Friday's price is still a welcome respite from the $1.40-level gas many Canadian cities faced during the summer.
* s, a- {0 O9 N8 q9 U& \) v
4 [1 ?7 C( y$ Z6 L* f- 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.
z" ^5 M: R. ]$ M C0 P5 ]2 y
"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."" S- r4 d- r% O. z& E& X
- {% w8 K) Q: L/ R" v) ZIn Toronto Friday, pump prices were 80.9 cents per litre. On Thursday they were 79.4 and a week ago they were 74.2.9 j! R% y* t9 w7 \4 W' W8 F% f1 \% {0 o
$ p3 W: f; W. Y) i( _9 O2 l& kVancouver, which has higher gas taxes than other cities, has prices of 94.7 per litre, up from 87.5 a week ago.
" k3 V$ G/ }7 A4 q1 d6 H. y0 a* `% F& R( f X0 [$ F' s
The price of crude oil, the main ingredient in gasoline, has been dropping steeply since it's peak of $147 reached in July.
* C) A" j9 [% l* o, Q
! c2 \2 b7 B$ c# P# P* zThe February contract for crude oil settled at US$36.51 on the New York Mercantile Exchange, down from more than US$50 a barrel a week ago.
( c8 f9 ]% E- P% t9 g7 s, Z3 ?
' q0 L- S0 F( ^" V# w3 U7 `"Crude oil is an important input into the distillation of gasoline. But there's a lot of other factors as well," said Todd Hirsch, senior economist with ATB Financial in Calgary.
4 q! B( }! c; c6 a8 k* N% M9 w8 w3 E! o1 a7 i. e8 P1 D. {
Industry players would say they have to account for transportation, marketing and other expenses - not to mention taxes, which vary from province to province., t1 t% G4 {. A9 |0 l. j' F
9 @' @( H7 F( y2 ?! J
But those oil companies - private-sector players in a free-market system - also want to turn a profit.; p/ a# T0 L$ S8 x
# ^5 ^3 ~8 }4 _" c9 M
"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.
8 V( b+ l( c/ S7 s5 j. ~% T4 P( N
"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."" J. |+ z" f! w$ Y% \5 K
% l( [0 ^" h3 P/ D5 {2 G
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 $42.57 on Friday.5 ^! C1 [4 e& G! W6 z) [& J
3 h7 e: Y: v5 ~3 X8 ~+ H8 d
"(The oil companies) might have realized that while prices were low in the last couple of weeks, they knew that there was going to be a correction," Hirsch said.$ }9 ?% j+ N" f3 \0 f2 F/ `0 M$ j
0 V& ]8 z, X: ?! z0 @0 `; d% m+ YHirsch 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.
! C. |' _' z* u% {! S' V
5 `7 o+ ]& ~. ~"I'm not seeing a lot of strengthening in crude oil prices over the next six months," he said.
/ E: G8 T0 d2 H6 D5 ^3 Z8 J- O1 C! D
"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 J/ A" i0 v3 k& j1 z) ~ W' L
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.# b0 U" f8 x, ?: ^% z, X
6 |/ K9 W3 O( d"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.
, m' d! E. \7 _
7 a* b4 H: d" i1 }% w5 G"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." |
|