Gas prices shot up this week and could go up even more by Sunday, based on the thinking of an industry analyst.
Pump prices climbed Friday and there’s typically a two-day delay between increases, Roger McKnight of En-Pro International Inc. in Oshawa said Friday.
“It doesn’t look good for Sunday,” he said.
The cost of gasoline varies throughout Canada. It is affected by crude oil prices, tax structures of provinces and their location. B.C. gasoline prices tend to follow wholesale prices in Seattle, he said.
Stations have increased their prices this week, with many in Greater Victoria charging from $1.419 to $1.449 per litre on Friday, up from $1.358 a week ago. We’re still below the record high of $1.536 set in 2008.
Prices are also going up across the country.
The higher prices follow a couple of areas of uncertainty around oil supply and “sheer guesswork” on Wall Street, McKnight said.
Crude oil prices climbed on Wednesday following an announcement from the U.S. Energy Department that the supply was down by 10 million barrels in the first week of July.
Although that is a fairly large number, enough inventory remains to see motorists through the summer driving season, he said.
Speculation about the impact of unrest in Egypt is another factor pushing up prices. The worry revolves around the Suez Canal in Egypt, connecting the Red Sea and the Mediterranean, which is the chokepoint for oil delivery to Europe.
McKnight cautioned that his own forecast may not play out as expected, saying that 10 days ago he told everyone to relax because prices would be going down.
Gas price watcher Dan McTeague, a former federal MP, said investors are largely responsible for the price increases.
“You’ve got financial money, pension money all being thrown out of gold and going right back into safe havens of either U.S. currency or oil,” he said. “That’s what’s driving this,” said McTeague, who runs website tomorrowsgaspricetoday.com.
The price hikes are typical in the summer months when Canadians drive more, he noted.
Gasoline inventories in the U.S. have also been drawn down dramatically over the past two weeks, prompting investors to predict a return to better economic times south of the border.
Some analysts are predicting a 10 per cent increase in pump prices in the U.S. over the next few weeks, which means even higher prices in Canada, said McTeague. “Whatever happens in the States, you always have to add five to 10 per cent more [in Canada],” he said. “So, if it’s going up by 10 per cent in the states on average, expect it to go up by 15 per cent here.”
