As COVID-19 continues to spread with the Delta version this summer, the price of gas has taken a toll on Canadians’ wallets.
The country, which is in the fourth wave of the pandemic, has seen gas prices climb due to demand uncertainty as the virus resurfaced, threatening economies’ ability to completely reopen. In July, prices in Vancouver rose as high as $1.74 a litre.
However, with the average price of Canadian gasoline hovering at $1.40 per litre as of Wednesday, one petroleum analyst believes that Canadians will see some respite in the fall.
Patrick De Haan, head of petroleum analysis at GasBuddy.com, told Global News that with oil producers switching to cheaper winter fuel blends as of Sept. 16, Canadians might see prices slide to under $1.35, or as low as $1.25 on average, as we head into October and November.
“Or even in an optimal situation, maybe even getting down to a $1.20, but I don’t see much more relief than that yet,” he said.
“Of course, there’s a lot that could change the course of declines.”
One of those changes could be another hurricane, he said. Hurricane Ida’s destruction in the southern U.S. forced the closure of several oil refineries, which pushed Canadian prices up after averaging at $1.35 last week.
On Wednesday, the most expensive gas was in British Columbia, which averaged around $1.54, while the cheapest was in Saskatchewan with prices floating around $1.31, according to GasBuddy.com.
Another change to watch out for is how the pandemic plays out in Canada and other major oil-consuming countries like the United States and China, De Haan said.
“Though Canada is very much aligned with the U.S. on its COVID response, if the U.S. deviates and say, for example, the U.S. shuts down and Canada does not, that’s going to make a bigger shockwave,” he said.
“So watch what happens in China with the response to COVID. India is another large oil consumer and the U.S. I would watch what OPEC does — if they shift their policy and of course, the overall global economy.”
Roger McKnight, chief petroleum analyst with En-Pro International Inc., is split on the issue.
He said while Canadian prices follow those in the United States, it’s hard to predict what price points could be in the fall.
“I do the gasoline predictions for the next day every day of the week, and I know what factors go into that price change tomorrow but when you come to a week from now, a month from now, the middle of October, anything can happen for goodness sake,” he told Global News.
“I mean, it is a function of demand, not necessarily supply. That can be altered by shale oil production coming back on or OPEC kicking in more crude oil like they say they’re going to do in September, but it’s the demand side and that’s what’s driving this whole darn thing.”
McKnight also stated that he will be examining how vaccine mandates are implemented around the country.
“If the mandatory immunization programs take effect, it will enhance demand because people will say, ‘OK, everything is under control now, and I can get back to work,’” he added.
“If variants one, two, or three appear and people begin hiding behind the curtains in their homes again, demand will fall and prices would fall, so it’s a coin flip either way. When you have those two factors in the equation, I don’t know how anyone can predict what the price will be in September.”
Source_ The Canadian Press