OPEC+ decision could affect already inflated gasoline prices in Alberta
Decisions made at a conference of international oil producers are expected to affect the crude oil market and the price of gasoline at Alberta pumps, which are already back to summer peaks.
Several gas stations throughout Calgary posted prices at $172.9 – almost 10 cents higher than the Alberta average, and the national average, according to CAA.
Gasoline prices were closer to $1.36 in Alberta in mid-September.
Leaders gathered for an OPEC+ summit in Vienna decided Wednesday to slash global oil production by two million barrels per day in order to boost sagging oil prices.
It amounts to about a two per cent reduction in total global output.
It's also the largest cut since early 2020, in response to the COVID-19 pandemic.
CUT SHOULD CAUSE OIL TO CLIMB
"The cut will likely add some short-term price strength to oil. I'm sure that's what we're going to be seeing. But the degree to which those proposed cuts impact the physical market is yet to be determined," said Kevin Birn, energy analyst for S&P Global Commodity Insights.
Birn says continued high demand for oil means prices are expected to trend upward in the near term.
"The refined product market certainly depends on the price of oil. Refiners are going to pass any costs they have back through to consumers. We have to pay for what they pay for," Birn said.
Which means drivers could see the cost of fuelling up climb even further in about one to two months.
CURRENT PRICE CONDITIONS
As for the current price of gasoline at Alberta fuelling stations, retail gas expert Vijay Muralidhuran says a few factors are happening all at once.
Demand for gasoline has stayed higher for longer than the expected "driving season" as North Americans kept more cars on the road with warmer weather stretching into September.
Muralidhuran says several U.S. refineries that provide fuel for gas stations are down for fall maintenance, shrinking supply and raising prices of the refined product.
As well, he says the price at the pumps today reflects market decisions made one to two months ago, and that crude oil market impacts are also felt by consumers on a similar time delay.
PAIN AT THE PUMPS
Some Calgarians say it’s stressful to fill their tanks as it is.
"We'll see it at the gas pumps, and the prices of pretty much everything," said Alex Trenholm.
"I'm driving my partner’s car and I have to fill up with premium today and it's definitely going to hurt the bank account a little bit," said Meghan Clubley.
"Here at least, fuel prices shouldn't be increased because there is no reason except to make money for big companies," said Vlad Kononenko.
A statement to CTV News from Energy Minister Sonya Savage's office says:
“This is yet another reminder that we need to create long-term energy security for Canada and North America. The world needs Alberta’s responsible, reliable energy – which adheres to the highest environmental, human rights and labour standards. (It’s) the logical choice to help meet that demand. It’s the best way to keep energy secure, reliable and affordable for decades to come.”
The Alberta government introduced a provincial gas tax holiday to provide a discount to vehicle-dependent Albertans, but it has been reinstated after a nearly six-month period.
The affordability measure was introduced on the condition that oil prices trade higher than $90 per barrel.
"We review the fuel tax relief program quarterly and will announce the next update in December. If oil prices rebound above $90 in the weeks approaching mid-December, the fuel tax could again be fully paused in the first quarter of 2023,” said Paul Hamnett, press secretary for Alberta Treasury Board and Finance.
“If WTI averages between $80 and $90 per barrel, the tax will remain in place at a discounted rate. The tax will only be fully reinstated when the average price of WTI falls below $80 per barrel."
Hamnett's statement continued to mention the unexpected disruptions at refineries on the West Coast and in the Great Lakes region, as well as the plains states in the U.S., including fires and maintenance delays, which impacted mostly western provinces in Canada.
"Even with the recent price increase, Alberta consistently has the lowest or one of the lowest average gasoline prices in the country," Hamnett said.
West Texas Intermediate, the benchmark price for crude oil, closed at $88 per barrel on Wednesday.
CTVNews.ca Top Stories
'Still so much love between us,' Sophie Gregoire Trudeau says of Prime Minister Justin Trudeau
Sophie Gregoire Trudeau says there is 'still so much love' between her and Prime Minister Justin Trudeau, as they navigate their post-separation relationship co-parenting their three children.
What to know about avian influenza in dairy cows and the risk to humans
Why is H5N1, or bird flu, a concern, how does it spread, and is there a vaccine? Here are the answers to some frequently asked questions about avian influenza.
'I was scared': Ontario man's car repossessed after missing two repair loan payments
An Ontario man who took out a loan to pay for auto repairs said his car was repossessed after he missed two payments.
opinion The special relationship between King Charles and the Princess of Wales
Royal commentator Afua Hagan writes that when King Charles recently admitted Catherine to the Order of the Companions of Honour, it not only made history, but it reinforced the strong bond between the King and his beloved daughter-in-law.
Pro-plastic lobbyist presence at UN talks is 'troubling,' say advocates
Environmentalist groups are sounding the alarm about a steep increase in the number of pro-plastic lobbyists at the UN pollution talks taking place this week.
'Too young to have breast cancer': Rates among young Canadian women rising
Breast cancer rates are rising in Canada among women in their 20s, 30s and 40s, according to research by the University of Ottawa (uOttawa).
Charlie Woods, son of Tiger, shoots 81 in U.S. Open qualifier
Charlie Woods failed to advance in a U.S. Open local qualifying event Thursday, shooting a 9-over 81 at Legacy Golf & Tennis Club.
$70M Lotto Max winners kept prize a secret from family for 2 months
During a special winner celebration near their hometown, Doug and Enid shared the story of how they discovered they were holding a Lotto Max ticket worth $70 million and how they kept this huge secret for so long.
Courteney Cox says her partner Johnny McDaid once broke up with her in therapy
Courteney Cox's longtime partner Johnny McDaid once broke up with her in a therapy session.