'Rollercoaster' ahead for Canadian gas prices, expert says
Wednesday, April 4, 2018, 1:17 PM - There’s 'nothing short of a roller coaster' ahead for gas prices in Canada, as the effects of a burgeoning trade war and the annual switchover to summer gas loom large.
Dan McTeague, senior petroleum analyst at GasBuddy.com, told The Weather Network that mutual trade war threats between the United States and China have the potential to actually push prices down in the short term, depending on how things play out.
“What you’re going to see is prices likely drop a couple of pennies right across Canada, especially on the wholesale side,” McTeague told The Weather Network Monday evening.
“The normal trajectory of oil and gasoline has been derailed by whatever should come over the next couple of days as traders, investors speculators have really thrown in the towel and decided now is the time to sell just about everything, out of some fear that there could be a major trade war ... between two of the world’s largest economies.”
WATCH BELOW: Surprising myths about gas mileage
The crisis is disrupting the usual gasoline trends at this time of the year, which sees providers switch over to gasoline treated to be more stable in the hotter temperatures of the summer. Instead, the new uncertainty has seen major stock market sell-offs by traders, investors and speculators.
Nevertheless, McTeague says that there’s ‘no doubt’ that once the crisis has passed, prices will rise again, to levels not seen in years. In Ontario, McTeague says prices could reach as high as $1.35 per litre by mid-April, with Vancouver as high as $1.60. On average, prices across Canada could be some 20 cents higher than a year prior.
But McTeague says that’s likely to be the first of several increases, with the winter-summer switchover the “first shoe to drop,” and prices are already the highest they’ve been since September, when the lingering effects of Hurricane Harvey disrupted Gulf oil supplies.
And looking ahead, McTeague says he doesn’t see many more mitigating factors like the current dispute between the U.S. and China. There is some chance the expected dip could be a prolonged one, but McTeague says other factors -- such as expanding global supply and demand for gasoline, increased demand for vehicles, and the added effect in Canada of provincially or federally mandated carbon pricing adding 2-3 cents per litre -- point to an opposite trend.
“So there isn’t really much out there that a consumer could see as good news, and really, the only hedge you have is knowing where the best prices are, and where the spreads are between the highest prices and the lowest in a given town,” he says.