 鲜花( 98)  鸡蛋( 0)
|
Gas prices are rising while crude prices are falling. What gives?
. @7 u, R% J( g$ M6 E# ?Published: Friday, January 16, 2009 | 5:11 PM ET. s+ w' G: n, b1 Q1 R' S* r
Canadian Press NewsItem/NewsComponent/NewsLines/ByLine
5 z$ Y' V- w7 B
0 s$ n; I) L& |CALGARY - With crude oil prices falling, motorists may wonder why gasoline prices are heading in the other direction. _" W2 \4 l1 M$ |) l
/ K% U$ [" T& Q$ |$ }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.
, `- \- D9 {$ }% w4 T+ a6 W/ C2 T0 N" m4 o W
Calgarians were paying on average 81.5 cents per litre - about a four-cent jump in just one day.
" v7 ^( @1 T8 N0 q) v) s/ D3 A7 ~( Z2 L. x6 N
"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.
" {. S1 t2 _& b1 W9 s, | r. p8 @) z+ U/ D: g; O) Z+ V/ ]
But Friday's price is still a welcome respite from the $1.40-level gas many Canadian cities faced during the summer.
! `: \& w1 @* |1 }: _2 b- i2 G M: w, G P
"I definitely changed my habits in the summer. I was going to go on two road trips, which I did not go on by virtue of the fact that the prices were so high," Lawnikanis said." E; G: R5 K4 s- B; F. p L
, ?# C: o8 F$ N: D8 Q/ \: T) H"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."# } {, `8 I: v6 c/ H* E4 {. ?
( n( g1 Q# d- I& g: k8 d1 D* 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.
$ \/ A. v7 F/ G. t+ Y" f3 G+ C0 e }8 b$ O" U+ x
Vancouver, which has higher gas taxes than other cities, has prices of 94.7 per litre, up from 87.5 a week ago.5 h% L3 M, K% y: D9 r
) Z& v9 z$ C. x! r/ n, p
The price of crude oil, the main ingredient in gasoline, has been dropping steeply since it's peak of $147 reached in July.
7 v6 F/ ~* ?( L; m, T# ~
3 X& h- x9 |+ ?9 dThe February contract for crude oil settled at US$36.51 on the New York Mercantile Exchange, down from more than US$50 a barrel a week ago.7 z8 k C$ v1 |6 k! S4 l
& P6 }5 \! e# h( `# F
"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.! q' t& M+ w: l- G, Y5 H
+ ]2 M7 ?4 s7 |) u# g
Industry players would say they have to account for transportation, marketing and other expenses - not to mention taxes, which vary from province to province.
$ @( B. ~# q6 E0 a0 i2 m
: |/ B0 }0 ^$ x7 ]But those oil companies - private-sector players in a free-market system - also want to turn a profit.
R5 w' P- O/ r! g: }, ~) _( N* o1 ~3 v8 L- z& Y
"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 f7 i2 l" |' U! b) E# W u" j* J3 y
0 e6 f" R5 |3 P, d. h. f* r"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."8 v; U. D( o: q" s
3 u/ `# A7 H( L' c. ^( v
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 $42.57 on Friday.5 _& Y/ J( M9 P2 C4 g
+ z* w! M3 R N
"(The oil companies) might have realized that while prices were low in the last couple of weeks, they knew that there was going to be a correction," Hirsch said.& T& ]' _/ f( ^0 |/ O
' a& D7 |$ L: d( wHirsch 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.- f. J& I+ M. L* f7 c
: O1 Z$ O1 o# d9 t& _
"I'm not seeing a lot of strengthening in crude oil prices over the next six months," he said.8 F4 {5 }6 b, t' }5 n2 `
Y( s# M+ r7 ~' b/ P- r1 R
"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.", z" v4 z) }; R& `
7 h% E$ f# G0 Y5 x/ o8 NBut 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.2 ~7 [ N2 W: \5 u2 b
% g+ e6 F# M. o2 Z5 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.2 f! L+ |0 j; b" b4 O
& V3 j* U' i7 W* J. T
"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." |
|