Sky-high gas prices the 'new normal,' analyst warns
It's going to be an expensive summer for Ottawa drivers
Drivers in Ottawa watching gas prices creep higher and higher shouldn't expect to see much relief at the pump anytime soon, says one industry analyst.
Dan McTeague, a senior analyst with the website GasBuddy.com, told CBC News that it's going to be an expensive summer for Ottawa drivers.
"If we can get to $1.37 or $1.38 right now, we're likely to see a dip, but during the summer we'll see heavy, robust demand for gasoline, which could see prices moving another five to seven cents a litre higher than what we're seeing now," McTeague said.
Potentially $1.42, $1.43 in Ottawa, perhaps higher elsewhere."
That dip will likely come before the May long weekend, he said, but after that the forecast isn't pretty.
The world is consuming more oil, not less.- Dan McTeague
"I'm not thinking there's going to be a lot of days where we see prices heading below, say, $1.25. $1.25 to $1.35 looks like the new normal."
McTeague noted there's been a rise in the price of oil since Christmas from about $50 a barrel to about $67 or $68 now.
The Canadian dollar usually moves in lockstep with the price of oil — as prices go up, so does the value of the Canadian dollar — but this hasn't happened in this case, he said.
"If the Canadian dollar were the same trading level as the U.S., you'd be saving 15 cents a litre," he said.
McTeague noted refineries in Sarnia, Ont. and Quebec are out of commission for spring maintenance which is putting some tightness on supply.
Also putting pressure on supply is the big picture of oil consumption globally.
"The world is consuming more oil, not less," McTeague said.
"Increasing amounts of oil and gasoline are being diverted to other parts of the world … where demand is increasing no matter what the price is."
There won't be any relief in the cost of gas for the foreseeable future, McTeague predicted. Drivers will likely absorb the cost over the next few months but won't be happy about it.
The only thing for drivers to do now, he said, is to keep an eye on the Canadian dollar and cross their fingers something will change.