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
RCMP uncovers plot to sell drones and equipment to Libya
The RCMP says it has uncovered a plot by two men in Montreal to sell Chinese drones and military equipment to Libya illegally.
Demonstrators kicked out of Ontario legislature for disruption after failed keffiyeh vote
A group of demonstrators were kicked out of the legislature after a second NDP motion calling for unanimous consent to reverse a ban on the keffiyeh failed to pass.
Tom Mulcair: Park littered with trash after 'pilot project' is perfect symbol of Trudeau governance
Former NDP leader Tom Mulcair says that what's happening now in a trash-littered federal park in Quebec is a perfect metaphor for how the Trudeau government runs things.
Man wanted in connection with deadly shooting in Toronto tops list of most wanted fugitives in Canada
A 35-year-old man wanted in connection with the murder of Toronto resident 29-year-old Sharmar Powell-Flowers nine months ago has topped the list of the BOLO program’s 25 most wanted fugitives across Canada, police announced Tuesday.
Doctors ask Liberal government to reconsider capital gains tax change
The Canadian Medical Association is asking the federal government to reconsider its proposed changes to capital gains taxation, arguing it will affect doctors' retirement savings.
Keeping these exotic pets is 'cruel' and 'dangerous,' Canadian animal advocates say
Canadian pet owners are finding companionship beyond dogs and cats. Tigers, alligators, scorpions and tarantulas are among some of the exotic pets they are keeping in private homes, which pose risks to public safety and animal welfare, advocates say.
Thieves use stolen forklift to rip cash machine out of U.K. bank
Police in the U.K. are searching for a group of suspects seen on video using a forklift to steal a cash machine from a bank.
'There was a lot of black smoke': Crane operator sounds alarm while trapped during highrise fire in Halifax
A tower crane operator alerted emergency crews after noticing a fire on a construction site in Halifax Tuesday morning.
Cherry blossoms blooming in Canada: Here's what to know
There is a swaying sea of colour in some cities across Canada, and it's a sure sign of spring: cherry blossoms are in bloom.