 鲜花( 98)  鸡蛋( 0)
|
Gas prices are rising while crude prices are falling. What gives?
9 d2 a, [. N. E: B. APublished: Friday, January 16, 2009 | 5:11 PM ET% {2 N7 X' M- e: o8 \; j- }- b
Canadian Press NewsItem/NewsComponent/NewsLines/ByLine
# j& \2 @& a5 s, y$ x- r; n" T2 O( |) _8 X9 q
CALGARY - With crude oil prices falling, motorists may wonder why gasoline prices are heading in the other direction." f; X) g2 g2 y s
+ v9 p& a4 L' _ t' [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.
& N R' D& f- |# h R
, ?: b( f9 E- |3 HCalgarians were paying on average 81.5 cents per litre - about a four-cent jump in just one day.1 t" L! s, H1 D
/ Y y" [/ h4 h4 ^0 u
"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.# \* k' O0 ~2 q" f& ~8 g
h4 |& ^1 l8 P8 {1 s" |But Friday's price is still a welcome respite from the $1.40-level gas many Canadian cities faced during the summer.$ B8 X/ K" A# \
: l D2 e9 m* a' O4 ^) i4 g: e
"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.
( j+ I/ L& K1 L* \. s9 Y0 U5 R4 {" |- j3 S
"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! ^* y( f5 ?9 ]3 m% t) C/ h" s9 u5 [5 L
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.$ F1 w% g6 n" N' D" V& i) M! O0 K
, u9 f2 U( Y" K7 U
Vancouver, which has higher gas taxes than other cities, has prices of 94.7 per litre, up from 87.5 a week ago.
2 K/ h1 y% Z3 _1 w- u3 |7 u
/ M4 H5 N/ j BThe price of crude oil, the main ingredient in gasoline, has been dropping steeply since it's peak of $147 reached in July.& e$ Y$ s- U9 u
8 s5 F" l# g: T8 t
The February contract for crude oil settled at US$36.51 on the New York Mercantile Exchange, down from more than US$50 a barrel a week ago.
1 M! s6 s& W4 M8 p9 d% E# c. a/ n! ]' {/ G" U' `, o
"Crude oil is an important input into the distillation of gasoline. But there's a lot of other factors as well," said Todd Hirsch, senior economist with ATB Financial in Calgary.5 I9 e2 a& `0 G. e4 d
" s% J+ l. k! C( W* sIndustry players would say they have to account for transportation, marketing and other expenses - not to mention taxes, which vary from province to province.' y7 K; E" W# {
! R: g- j# S; Q( H$ mBut those oil companies - private-sector players in a free-market system - also want to turn a profit.
. `4 C1 X3 f5 i9 `) s' Z! B
$ v* @' t% o" g5 ?"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.
) g6 z. o: T6 Q: c6 V% Y
" J0 d7 [( F0 c8 O; c* L8 n8 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."% }% R5 _, w9 R) d
4 E) O1 U0 M6 ]5 rAnother explanation could be that the February contract for crude oil expires on Tuesday, and the contract for March is already significantly higher, settling at $42.57 on Friday.! c! l0 M$ b& Q6 D9 |& F: y
. _5 g) ~! M6 n7 |/ K3 A: `"(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.
& T3 w/ |2 a: _% V% v+ @2 M
! Y1 s( t/ `/ \' f0 a) F zHirsch 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.
: l; d1 b& |% G! V+ b6 f& i6 }0 }. E2 a& g/ O% l1 ~* N1 L
"I'm not seeing a lot of strengthening in crude oil prices over the next six months," he said.- v9 Y$ _/ p C4 c/ l m% T
6 P0 G/ S( k- R8 S3 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."' l6 \6 h# ^, G
& P/ V1 ]4 Q" ~; i/ l6 d
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.
& L3 {; O8 X. X& R+ p' x5 A9 Z% ~" @: O S3 t1 ]# V) {7 I
"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." r" Q8 E3 ^2 N* r+ p* y
' V7 R C) j; m% Q3 L
"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." |
|