Canadians to pay significantly more at the pumps thanks to surging oil prices

EDMONTON -

As oil prices reach a seven-year high, analysts say Canadians should brace for skyrocketing prices at the pumps this week as the global economy begins to rebound from a pandemic lull.

In Winnipeg, fuel prices soared 10 cents overnight to $1.429 cents per litre, up from the average of $1.335 cents per litre – a price that hasn’t been seen in nearly 13 years. Drivers in Toronto, meanwhile, have been told to brace for prices as high as $1.44 cents per litre by Thursday, adding to already inflated prices.

The price at the pumps is expected to jump by another cent or two across the country over the coming days, hitting historic highs just in time for the Thanksgiving weekend, thanks to increased demand and undersupply of oil globally.

“[People] want to get back on the road, they want to get back into planes,” Roger McKnight, chief petroleum analyst with En-Pro International, told CTV National News.

“Jet fuel demand is up 64 per cent, that’s part of the diesel family as well. That’s all going to push up gasoline prices, like it or not.”

In addition to increased consumer confidence, gas prices were driven up thanks to Hurricane Ida, which shut down a good portion of U.S. oil and natural gas production in late August.

But gasoline isn’t the only product that will have an impact on Canadians’ bottom line as winter approaches. Natural gas prices are also soaring due to a global energy crunch.

“China is clamping down on energy consumption because of a lack of coal and there is a natural gas shortage in Europe that’s pushing the price of natural gas up globally to the highest levels seen in years, and that’s also affecting and pushing up the price of oil,” Gas Buddy petroleum analyst Patrick De Hann told CTV National News.

Crude oil prices are up nearly 63 per cent in 2021 while natural gas is 2.5 times higher. On Tuesday, the oil price rally continued after OPEC and its allies opted for a modest increase to production of 400,000 barrels per day in November.

De Hann, speaking to CTV Winnipeg, noted that seeing gas prices increase at this time of year is untraditional.

“Normally, we see gas prices declining into the fall and winter because of a reduction in demand,” De Haan said. “But globally, because of COVID and continued economic recovery, we’re seeing, not only in Canada and the U.S. but globally as well, the trend for oil consumption is one that consumption will likely continue to pick up as the globe continues to rebound from the effects of COVID-19.”​

With a file from The Canadian Press