The country, which is in a fourth wave of the pandemic, has seen gas prices rise due to the uncertainty around demand as the resurgence in the virus threatened economies from fully reopening. Prices reached as high as $1.74 per litre in Vancouver in July.
But with the average price of Canadian gas sitting around $1.40 per litre as of Wednesday, one petroleum analyst thinks Canadians might be in for some relief come fall.
Patrick De Haan, head of petroleum analysis at GasBuddy.com, told Global News that with oil producers switching to cheaper winter fuel blends as of Sept. 16, Canadians might see prices slide to under $1.35, or as low as $1.25 on average, as we head into October and November.
“Or even in an optimal situation, maybe even getting down to a $1.20, but I don’t see much more relief than that yet,” he said.
“Of course, there’s a lot that could change the course of declines.”
One of those changes could be another hurricane, he said. Hurricane Ida’s destruction in the southern U.S. forced the closure of several oil refineries, which pushed Canadian prices up after averaging at $1.35 last week.
On Wednesday, the most expensive gas was in British Columbia, which averaged around $1.54, while the cheapest was in Saskatchewan with prices floating around $1.31, according to GasBuddy.com.
Another change to watch out for is how the pandemic plays out in Canada and other major oil-consuming countries like the United States and China, De Haan said.
“Though Canada is very much aligned with the U.S. on its COVID response, if the U.S. deviates and say, for example, the U.S. shuts down and Canada does not, that’s going to make a bigger shockwave,” he said.
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“So watch what happens in China with the response to COVID. India is another large oil consumer and the U.S. I would watch what OPEC does — if they shift their policy and of course, the overall global economy.”
Roger McKnight, chief petroleum analyst with En-Pro International Inc., is split on the issue.
He said while Canadian prices follow those in the United States, it’s hard to predict what price points could be in the fall.
“I do the gasoline predictions for the next day every day of the week, and I know what factors go into that price change tomorrow but when you come to a week from now, a month from now, the middle of October, anything can happen for goodness sake,” he told Global News.
“I mean, it is a function of demand, not necessarily supply. That can be altered by shale oil production coming back on or OPEC kicking in more crude oil like they say they’re going to do in September, but it’s the demand side and that’s what’s driving this whole darn thing.”
McKnight added that he’ll be watching how vaccine mandates play out across Canada.
“If the mandated vaccine programs come into effect that will increase demand because people will say, ‘OK, everything’s under control and I can get back to work now,’” he said.
“If variant number one, two or three shows up and people start hiding behind the curtains in the home again, that will decrease demand and lower prices, so it’s a coin toss either way. I don’t know how anybody can say what the price is going to be in September when you’ve got those two variables in the equation.”
To put the price changes into context, De Haan provided data for the two years before the pandemic.
In September 2018, average Canadian prices were at $1.30. By January, prices dropped to $1.02.
In 2019, fall prices averaged at $1.15 and dropped to $1.14 by January.
“Given that we’re now in a COVID era, there’s nothing really that we can compare where we are now to past history,” De Haan said.
“I think there will be relief, but I just think that relief could be enhanced or disrupted by the amount of COVID cases and the action in response to a change in cases from OPEC, Canadian oil producers, (and) from U.S. oil producers. So there’s more difficulty getting a prediction right but I think the overall trend should remain downward simply because prices are so elevated compared to where they were prior to COVID.”
–With files from The Canadian Press