Gas prices will depend on Delta variant's effect on economy: analyst | iNFOnews | Thompson-Okanagan's News Source

Current Conditions

Partly Cloudy
11.7°C

Kamloops News

Gas prices will depend on Delta variant's effect on economy: analyst

A car is fuelled up at a gas station in Vancouver, Wednesday, July 17, 2019. A gas price analyst says prices at the pump will largely depend on how the Delta variant of COVID-19 plays out in the North American economy.
Image Credit: THE CANADIAN PRESS/Jonathan Hayward
August 10, 2021 - 3:01 PM

Gas price analysts say prices at the pump are still at the whim of the Delta variant of COVID-19, and could rise and fall depending on how the virus spreads.

Dan McTeague, president of Canadians for Affordable Energy, says the variant has caused concern around demand as it slows down the economic reopening, which has at times brought down the price of crude oil.

The price of crude oil was at US$68.63 per barrel as of Tuesday afternoon after prices as high as US$75 per barrel in July, but the amount Canadians pay at the pump has consistently risen in recent weeks.

McTeague says that's because the value of the Canadian dollar also dropped when the price of crude dropped.

He believes there could be more dramatic increases when the wave of Delta cases subsides and demand for oil comes roaring back at a higher pace.

"There continues to be this reality that the world is playing catch-up when it comes to demand, and supply is just not adequately meeting demand," said McTeague.

"It'll obviously be a very real problem once we get past this particular COVID variant."

The price of crude oil peaked this year in early July and sent gas prices in cities like Vancouver to highs of $1.74 per litre.

However, Craig Jerusalim, portfolio manager at CIBC Asset Management, said he believes a recent deal by OPEC plus to ratchet up production will prevent oil prices from reaching much higher levels like US$90 or US$100 per barrel.

OPEC plus is a loose coalition of oil-producing countries that includes OPEC’s official members, as well as Russia, Malaysia and Mexico, among others.

"Outside of COVID Delta variant scares, I think we are rangebound for that low 60s to high 70s range (per barrel) for the foreseeable future," Jerusalim said, meaning current gasoline prices could hold for some time.

Jerusalim and McTeague said new fees and taxes that have been introduced by federal and provincial governments in recent years are also part of the reason why Canadian consumers are noticing some of the higher prices for gasoline.

This report by The Canadian Press was first published Aug. 10, 2021.

News from © The Canadian Press, 2021
The Canadian Press

  • Popular penticton News
  • This $2.5M Kelowna industrial site could be yours for $116K at city tax sale
    Each year cities and towns throughout B.C. advertise properties for sale for unpaid taxes. The sales have to happen on the last Monday of September. Back in 2019, the most expensive house in
  • Charcuterie processing plant gets smoking in Kamloops
    A Kamloops butcher shop and deli is expanding to create a charcuterie processing plant earlier this month, and four full time staff are busy making sausage, and drying, curing, and smoking a varie
  • TRENDING NOW: Bear finds lost GoPro and makes a video
    %%nodefaultimage%% Dylan Schilt was blown away when he found a GoPro in the snow someone had lost while snowmobiling. He charged it, turned it on and couldn't believe what he saw.
  • Pot plants being pilfered from backyards in Kamloops
    Some Kamloops residents on the North Shore have reported their backyard cannabis plants have been stolen during the night over the past few weeks. Ken Davidson said his plants were stolen tw
  • Penticton man paralyzed for second time
    A Penticton family is slowly coming to terms with a serious illness after Nelson Vokey became paralyzed from the neck down on Sept. 12 hours after the vibrations from a golf swing caused or a
View Site in: Desktop | Mobile