 鲜花( 98)  鸡蛋( 0)
|
Gas prices are rising while crude prices are falling. What gives?
- d! I! R5 ~5 _. d4 A% QPublished: Friday, January 16, 2009 | 5:11 PM ET5 V/ u& ^% G, G+ |; [
Canadian Press NewsItem/NewsComponent/NewsLines/ByLine
& W" p! C3 Q8 u1 Z C2 r* ?4 {4 H. R5 h
CALGARY - With crude oil prices falling, motorists may wonder why gasoline prices are heading in the other direction.
2 P. T7 i3 S/ _0 E# g% a d$ X) W8 h$ r
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.
7 J2 T5 A( p5 w* q7 N, `7 _% w4 X- _' e
Calgarians were paying on average 81.5 cents per litre - about a four-cent jump in just one day.# g% K& ?. t" C8 u+ _- ?
- x p H; f: s9 d! h$ F% g2 {: ^"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.
* A) h4 t( `0 x, g& l4 u
1 e# b- A) C$ @6 UBut Friday's price is still a welcome respite from the $1.40-level gas many Canadian cities faced during the summer.
3 V* b4 h' S$ J6 w8 H8 ~- }8 a, |/ i, a6 G; f8 I* 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.7 E/ I* Q& }: J" i
& \% Z3 v' D9 n" u, ?, `, m1 g4 c7 ^
"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."
" `: W: o' p/ v( @1 G
- [. w) W' y/ A+ B2 QIn Toronto Friday, pump prices were 80.9 cents per litre. On Thursday they were 79.4 and a week ago they were 74.2.: s# J" M: H P( _( T: `% l
0 U0 W6 @# G9 b3 }, DVancouver, which has higher gas taxes than other cities, has prices of 94.7 per litre, up from 87.5 a week ago.
+ M' ^% M1 J' W3 k! e' L
- X% r, K" _3 U2 b5 Q: D9 XThe price of crude oil, the main ingredient in gasoline, has been dropping steeply since it's peak of $147 reached in July.
, Z% |, c. F, T* U' R, C8 N n$ e% b3 w9 ~0 `. R
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 m1 ?. y! D( d" E5 y
7 w/ S1 n" [/ ?( w9 q! L d1 N; G"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.& Z! ]6 G( \& E- V' I5 W
* F$ a/ T. y a" }" I7 B. J& z3 tIndustry players would say they have to account for transportation, marketing and other expenses - not to mention taxes, which vary from province to province.
5 k: W, E! H0 V" J7 F7 w+ k1 y+ I
z6 N* N1 s$ fBut those oil companies - private-sector players in a free-market system - also want to turn a profit.
4 \3 g( s% G6 a3 g+ G9 Z+ V& Z$ N' q6 q+ q
"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.
( B7 J# _4 U) i7 N" ^$ I
7 b1 e) K) |2 i0 O; E9 [) F"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."4 N: O- R' ^6 E
2 u3 e! Z8 f; K% u7 p4 S
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 $42.57 on Friday./ L( G5 @8 [7 [( G' a
8 ?/ g$ }3 G! V"(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.( r7 j' ]9 h# t# C6 U
4 { ^, F! b" ^" T" @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$ @" Q# T; @4 [/ M6 D
0 s+ H+ t8 z# e4 Z. \
"I'm not seeing a lot of strengthening in crude oil prices over the next six months," he said.$ P, i* G8 j( {& Z. V4 L2 F
6 W% G( O6 F" j) k"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."
/ ], ] H* h+ p' Y6 G; ?
) B, r! ^! g9 M/ xBut 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.
. D5 a; n) I3 D. z" W* T% j. v/ t! g, E4 ]# ^( ~
"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.
/ ?# U" m: Q2 T5 ]3 b! ]4 |% Q; d: i4 `: O9 Y
"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." |
|