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
'They needed people inside Air Canada:' Police announce arrests in Pearson gold heist
Police say one former and one current employee of Air Canada are among the nine suspects that are facing charges in connection with the gold heist at Pearson International Airport last year.
House admonishes ArriveCan contractor in rare parliamentary show of power
MPs enacted an extraordinary, rarely used parliamentary power on Wednesday, summonsing an ArriveCan contractor to appear before the House of Commons where he was admonished publicly and forced to provide answers to the questions MPs said he'd previously evaded.
Leafs star Auston Matthews finishes season with 69 goals
Auston Matthews won't be joining the NHL's 70-goal club this season.
Trump lawyers say Stormy Daniels refused subpoena outside a Brooklyn bar, papers left 'at her feet'
Donald Trump's legal team says it tried serving Stormy Daniels a subpoena as she arrived for an event at a bar in Brooklyn last month, but the porn actor, who is expected to be a witness at the former president's criminal trial, refused to take it and walked away.
Why drivers in Eastern Canada could see big gas price spikes, and other Canadians won't
Drivers in Eastern Canada face a big increase in gas prices because of various factors, especially the higher cost of the summer blend, industry analysts say.
Doug Ford calls on Ontario Speaker to reverse Queen's Park keffiyeh ban
Ontario Premier Doug Ford is calling on Speaker Ted Arnott to reverse a ban on keffiyehs at Queen's Park, describing the move as “needlessly” divisive.
'A living nightmare': Winnipeg woman sentenced following campaign of harassment against man after online date
A Winnipeg woman was sentenced to house arrest after a single date with a man she met online culminated in her harassing him for years, and spurred false allegations which resulted in the innocent man being arrested three times.
Woman who pressured boyfriend to kill his ex in 2000s granted absences from prison
A woman who pressured her boyfriend into killing his teenage ex more than a decade ago will be allowed to leave prison for weeks at a time.
Customers disappointed after email listing $60K Tim Hortons prize sent in error
Several Tim Horton’s customers are feeling great disappointment after being told by the company that an email stating they won a boat worth nearly $60,000 was sent in error.