 鲜花( 98)  鸡蛋( 0)
|
Gas prices are rising while crude prices are falling. What gives?
$ U1 ]2 c2 Q4 e0 OPublished: Friday, January 16, 2009 | 5:11 PM ET6 ~; P6 V* |- x* T/ y
Canadian Press NewsItem/NewsComponent/NewsLines/ByLine
& W& z& K6 Y' S& r* v" [8 }. C2 a( V e- R1 L: v
CALGARY - With crude oil prices falling, motorists may wonder why gasoline prices are heading in the other direction.2 x6 g3 ~- N$ D+ G d v- R& ?
4 w& t" l& Z8 g3 g1 r$ F3 U7 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.2 F% k! ]3 U; \, N2 r. `! \
' M. n4 j) U2 L, r: T* ECalgarians were paying on average 81.5 cents per litre - about a four-cent jump in just one day./ c1 `0 l; P4 v2 f4 U
S3 q; W+ p# r) M9 N$ u$ |) i" b
"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. V$ n3 {. g2 x) f
" z% \! P& @: O8 b5 H
But Friday's price is still a welcome respite from the $1.40-level gas many Canadian cities faced during the summer.
- j( s& X! }: T: h2 i% o3 f
; i7 d+ P& d% L/ b0 S2 Q; D0 y" z"I definitely changed my habits in the summer. I was going to go on two road trips, which I did not go on by virtue of the fact that the prices were so high," Lawnikanis said.
) d6 G- C. K5 P8 a& L8 }# [; A$ 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.". c, ^; E( C6 X0 Q; {
2 u' y0 `% p3 t, f
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.
: A$ l$ ?7 s* [+ {
; b3 @9 |; t1 M9 }, O: C$ TVancouver, which has higher gas taxes than other cities, has prices of 94.7 per litre, up from 87.5 a week ago.
/ @6 U8 j' B$ b+ m6 C+ _; ^2 N, v. u1 W" \/ ?/ E
The price of crude oil, the main ingredient in gasoline, has been dropping steeply since it's peak of $147 reached in July.
) q- i% m2 W x s' Y0 W
, m+ o2 u5 ^* A( K- BThe February contract for crude oil settled at US$36.51 on the New York Mercantile Exchange, down from more than US$50 a barrel a week ago." x x+ w5 X7 k& J: y
2 v' U; P8 _4 f& `0 X
"Crude oil is an important input into the distillation of gasoline. But there's a lot of other factors as well," said Todd Hirsch, senior economist with ATB Financial in Calgary.
! x( A! H# ?( V, P4 Q& u, s6 Z: W+ w1 e+ e: d1 v+ l
Industry players would say they have to account for transportation, marketing and other expenses - not to mention taxes, which vary from province to province.0 J1 ?. V# U9 W3 k7 a+ a2 N2 `$ T
) F$ F: l! e( p$ @But those oil companies - private-sector players in a free-market system - also want to turn a profit./ _( g4 c6 e& q# Z; W* L+ |3 X
2 E+ c0 `8 k2 G+ x3 E5 J"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.
7 `+ }! ?- K `4 M/ r( {" R- i& _
"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."
& T7 I% t* [% o$ ~$ |2 I" W& u9 @0 K: ?4 B, 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 $42.57 on Friday.4 U2 @: h- _5 E; Q
: {# P1 o4 M1 Y1 K0 f9 z$ V! {0 T. W
"(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.
1 E6 R, l/ b1 X/ n! m/ ^4 p8 E) n0 t2 j; n+ R0 C2 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.
T+ S& P& a. ]' {& d% E* e6 K6 G# S0 C
"I'm not seeing a lot of strengthening in crude oil prices over the next six months," he said.0 o* E' r( P- S# m
8 A- e7 d" R6 J# U9 e# r2 g" i"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."1 x) i5 R0 h( |1 W9 r3 ~
" l6 b3 O9 @0 t% fBut 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.' G2 p' z; C! Q$ o" ] ]
5 p( ~2 I, N( }: N( p/ m
"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.
, u3 ]$ ?8 e, B$ j( j" i# q& @) g- O
"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." |
|