The wild ride at the gas pumps isn’t over yet.
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The wild ride at the gas pumps isn’t over yet.
Londoners have been paying close to $2 a litre for gas recently, but the price is expected to plunge about 15 cents a litre Friday and another five cents Saturday.
That means regular gas that cost $1.90.9 a litre Thursday will drop to $175.9 Friday and $1.69.9 Saturday, the gas monitoring website gaswizard.ca predicts.
“The market is insane. There’s no rhyme or reason as to why this is happening. It’s not based on fundamentals,” said Dan McTeague, president of Canadians for Affordable Energy that runs the website gaswizard.ca.
“It’s all over the map, pricing has no bearing to reality now.”
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Oil dropped this week to $107 a barrel, a $17 decline in two days, driving the change in gas prices.
Broadly, the Russian invasion of Ukraine is to blame for the uncertainty in the markets and volatility, causing a price spike last week.
It is less certain why the price dropped. Some suggest there is enough oil still being exported from Russia as not all nations have embraced energy sanctions of that country. Other reports have pointed to a new Omicron variant from South Africa sparking worry over more lockdowns. Media in the U.S. were quoting U.S. President Joe Biden saying he will intervene in energy markets, releasing petroleum reserves.
“No one is certain what will happen,” or why, McTeague said.
“The market is trying to figure this out. These are very dangerous times for consumers. There’s a speculative energy bubble.”
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Last week, the price of gas spiked 13 cents a litre as the invasion of Ukraine by Russia slowed the flow of oil globally, causing market uncertainty. Russia supplies about 10 per cent of the world’s oil, about 10 million barrels a day, and that supply has been slowed by sanctions imposed in response to its invasion of Ukraine.
Canada does not import Russian oil, but the shortage has increased global gas prices, McTeague said.
The price of gas is so volatile some analysts do not track it daily or even weekly, but prefer giving monthly analysis of the sector, said Vijay Muralidharan, director of consulting at Kalibrate, a Calgary energy consulting firm.
“It’s too volatile. No one knows what will happen. It can fall one day and be up the next,” Muralidharan said. “It’s becoming hard to predict. There are a lot of moving parts. If there are more sanctions, it changes everything. I’m hesitant to say anything.”
As for whether we will see a price surge again in the near future, McTeague doubts it. “Anything is possible, but I think we will be down for a few weeks.”
In early January, local gas prices averaged about $1.40 a litre.
