Photo credit: The Canadian Press

By Curtis Galbraith

Business

Rising oil prices helping push up gas prices

Feb 19, 2021 | 1:16 PM

Gasoline prices have been edging up since the start of 2021.

GasBuddy.com’s Patrick de Haan says the price of a litre of gas is up 13 cents from a year ago because of a surge in oil prices.

“A barrel of West Texas Intermediate crude oil, one of the global benchmarks, is at about 60-and-a-half dollars a barrel. That’s up from $35 a barrel as recently as last Halloween, so, maybe that bodes well for some in the province. Certainly, as oil prices heat up, it’s good for one aspect of Canada but, unfortunately, higher prices at the pump (are) coming.”

Gas prices in Red Deer averaged 112.9 cents per litre on Friday.

de Haan adds higher oil prices are not the only reason for the jump in the price of a litre of gasoline.

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“In the US market, the extreme cold weather has shut down a significant portion of refining capacity in the US. That shouldn’t make a huge difference in Canada, though it will likely drive prices up a couple cents a litre.”

de Haan expects the reduced refinery capacity to continue pushing up prices.

“By the time that is all said and done in a couple weeks, we’re going to be talking about the switch-over to cleaner summer gasoline across much of North America. That will be the next catalyst for a rise in price. The other thing, too, the price of oil continues to advance, demand has recovered. Things continue to improve in Canada and the US in regard to COVID cases.”

de Haan says prices would continue to go up with the increase in demand unless oil producers increase production.

(everythingGP)