An acute energy crisis is making its presence felt in North America as consumers are finally starting to feel the pinch of much higher prices to fill up their cars and heat their homes.
The average retail price of gasoline in Canada hit $1.45 a litre on Wednesday, according to data compiled by retail analytics firm Kalibrate.
That’s a three-cent rise from Tuesday’s level and enough to beat the previous record of 143.6 cents, set this August. Prior to that, you had to go back several years to see higher gas prices.
The average pump price topped $1.40 a litre for the first time in 2008 and then $1.41 in 2014, research analyst Suzanne Gray told CBC News in an emailed statement.
While there are many factors that determine the price of retail gasoline, the price of oil is the biggest one, and crude prices around the world have roared back in recent months as supply and demand is proving to be more volatile than usual while the global economy is trying to emerge from the depths of the pandemic.
WATCH | Here’s why oil prices are spiking
Reduced supply driving increasing oil prices
19 hours ago
As demand exceeds supply after months of lockdown, gas prices are rising in Canada. Other countries are also seeing higher prices for fuel, but are more concerned about overall availability. 2:00
Like just about everything else, oil prices took a swan dive in the early days of the pandemic, as travel slowed to a crawl, factories closed up shop and the world economy effectively went into hibernation.
This slowdown went as far as causing the oil price to dip below zero for the first time on record in April of 2020. Oil traders literally couldn’t give away a barrel of oil for free and had to pay money to have people take it off their hands.
Oil rigs went into survival mode to make it through the pandemic. But as demand started to creep back, so, too, did prices. After dipping below zero barely a year ago, crude prices are now back to their highest level in seven years, and analysts say higher highs are coming.
“We’re probably going to see prices continue to rise through the end of the year unless we see another kind of COVID acceleration,” said Rory Johnston, founder of the Commodity Context newsletter and managing director at Toronto-based investment firm Price Street.
Normally, oil prices tend to ease off in the winter as demand for driving and flying in the northern hemisphere declines. But COVID has thrown the normal seasonal patterns completely out the window.
“Because of all of the pent up demand and these random reopening paths we’re on globally, it’s really hard to … ascribe a very normal seasonal pattern,” Johnston said. “I think it still is yet to be seen whether or not that happens.”
Edward Moya, an analyst at foreign exchange firm Oanda, says crude prices could have a lot more room to run.
“The oil market is still heavily in deficit and that will likely be the story over the winter. If the north has a cold winter, the prospects of $90 oil seem very likely.”
Global energy crisis
Higher pump prices are probably the most obvious example that consumers notice, but in reality, what Canadians pay at the gas station is only now catching up to what the rest of the world has been seeing in energy for a while now. Put simply, the price of everything is skyrocketing.
Natural gas prices are skyrocketing in Europe and Asia in recent months as demand has increased at a time when supplies have never been lower.
The fall has been colder than normal across much of Europe, causing Europeans to reach for the thermostat. But supplies are lower than usual because exports from major suppliers, such as Norway and Russia, are down.
According to data from Gas Infrastructure Europe, the association for gas companies on the continent, storage tanks are almost one quarter empty right now. Typically at this time of year, they would be full to the brim in advance of the cold months to come.
Natural gas prices have increased more than fivefold in recent months, and more hikes are expected.
Europeans aren’t the only ones short on gas either; China finds itself with a voracious demand for energy, too, which is causing gas exporters to go to the highest bidder. Rolling blackouts and shuttered factories are the norm in China right now, as the world’s most populous country is having trouble keeping the lights on as things reopen from COVID-19.
It’s gotten so bad that it has declared a temporary truce in its ongoing trade war with Australia, because it is so desperate for coal.
WATCH | Why the U.K. seems to be running out of gas
Severe gasoline shortage at pumps in the U.K.
10 days ago
Britain is trying to find 5,000 truck drivers to deliver gasoline to stations, even issuing temporary visas to Europeans to help ease supply chain problems. (Jon Super/The Associated Press) 1:36
Utility bills expected to rise in B.C., Ont.
While drama like that hasn’t happened yet in North America, consumers should expect their bills to rise.
B.C.’s main gas distributor, FortisBC warned customers in September that the average bill is set to go up between nine and 12 per cent starting this month. And Ontario’s biggest gas company, Enbridge, has applied with the province’s regulator to increase what it charges consumers starting in January.
“As if we don’t have enough sources of inflation pressures flaring,” Bank of Montreal economist Doug Porter said in a note to clients on Thursday.
Soaring demand around the world “points to higher prices ahead for Canadians to heat their homes this winter,” he said.
Kit Juckes, a strategist with French investment bank Société Générale, says energy prices are spiking so much that he expects governments around the world may eventually have to step in.
“How much governments will end up subsidising gas use will vary from place to place,” he said in a note to clients on Wednesday.
“In the longer run, we don’t think current prices are sustainable, but the short run will matter more in the weeks ahead.”
CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.
It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.
The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.
Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.
TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.
The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 7, 2024.
BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.
The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.
On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.
“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.
“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”
Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.
BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.
The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.
BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.
It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.
The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”
Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.
This report by The Canadian Press was first published Nov. 7, 2024.
TORONTO – Canada Goose Holdings Inc. trimmed its financial guidance as it reported its second-quarter revenue fell compared with a year ago.
The luxury clothing company says revenue for the quarter ended Sept. 29 totalled $267.8 million, down from $281.1 million in the same quarter last year.
Net income attributable to shareholders amounted to $5.4 million or six cents per diluted share, up from $3.9 million or four cents per diluted share a year earlier.
On an adjusted basis, Canada Goose says it earned five cents per diluted share in its latest quarter compared with an adjusted profit of 16 cents per diluted share a year earlier.
In its outlook, Canada Goose says it now expects total revenue for its full financial year to show a low-single-digit percentage decrease to low-single-digit percentage increase compared with earlier guidance for a low-single-digit increase.
It also says it now expects its adjusted net income per diluted share to show a mid-single-digit percentage increase compared with earlier guidance for a percentage increase in the mid-teens.
This report by The Canadian Press was first published Nov. 7, 2024.
