Gas prices dropping at year end
Crude oil biggest factor in low pump costs
Simon Whitehouse
Northern News Services
Wednesday, December 16, 2015
SOMBA K'E/YELLOWKNIFE
Dave Karpan was filling up his truck and two canisters of gas Monday night and if he was feeling a bit confused, it is understandable.
Dave Karpan fills his truck up with gas at the Yk Co-op gas bar, Monday evening. Karpan said he has noticed that gas prices have gone down and shot back up since last week, even though oil prices per barrel were down. He said it is definitely strange. - Simon Whitehouse/NNSL photo |
"I have noticed gas prices had gone down to 109 (cents) the last time but now it is back up to 112.9," he said.
"I also saw that the price per barrel had also gone down just last week, so I don't know what is going on."
As 2015 wraps up, Yellowknifers like Karpan may continue to enjoy even lower gas prices but former trends of price stability is likely to be of the past, says one market analyst.
It now seems like a lifetime ago when drivers were paying a steady rate of 138.9 cents at the pumps but Jason Parent, vice-president of consulting with petroleum market analysis company MJ Ervin & Associates, says fluctuating crude prices, which as of Monday sat at a Canada rate of $US 36.10 per barrel, will make it harder for trends to forecast.
"With you guys the price tends to sit at one spot and the wholesale prices fluctuate underneath that," Parent explained, adding there is a tendency at this time of year for prices to be at their lowest. The world market's extremely low crude prices have pushed the price further down.
"Crude prices have been the big story and have remained low for quite some time. Looking forward there is no expectation that crude prices will return to $100 per barrel level. This is something that is the new reality for at least the next year to a year and a half. "
As of Monday, gas prices remained at 109.9 cents per litre at Esso, Shell and the Monkey Tree, but the YK Co-op posted a price of 112.9 cents. The Canadian average for gas prices is 100.7 cents per litre. Parent said there is a likelihood of gas prices raising again in February because of demand for gasoline in anticipation of the spring.
"It depends on what happens with crude, but if crude prices stay where they are - which is the expectation that they will -you are likely to see prices stay low," he said.
Justin Nelson, general manager at the YK Co-op, said his store was the first in the city to drop prices to as low as 109.9 cents within the last week and a half and other gas stations then followed.
Over the last year, Nelson said, the store has found prices much more unpredictable, calling them "whacky." He said they tended to drop every week by about three cents and then rose back by two cents, leading to a general downward trend. The greatest fluctuation has been about 10 cents in a day, he added.
"As far as dropping, they've been dropping for a while and while we are at 111 (cents) now, who is to say where we will be at the end of the week," he said. "To really tell you the truth, it has got its peaks and valleys. What we have been seeing is that at the end of summer it started going up. Of late, the rack rate (the price gas suppliers sell to stores) has had bigger jumps, and even bigger decreases than normal. And then it increases again."
