By Geoff Smith (@smithco on Twitter)

Gas price hike predicted after production agreement

Sep 29, 2016 | 11:23 AM

LETHBRIDGE — It might be a good time to fill up the gas tank.
 
Crude oil prices jumped more than five per cent Wednesday, Sept. 29 after the member countries of OPEC agreed to a production cut, to take effect in December. Dan McTeague, senior petroleum analyst with GasBuddy.com, said the wholesale price of gas went up to approximately 90 cents/L.
 
“It’s hard to run a gas station on one-and-a-half cents retail margins, especially when half your customers pay by credit and those credit cards usually mean a two cent per litre charge for most gas stations,” McTeague told LethbridgeNewsNow.
 
McTeague said it’s a “safe bet” that prices will go up at least by several cents.
 
“We’re lucky if it’ll only be several cents, but more than likely you could see prices moving up over the next 24 to 48 hours or at the latest on Monday, to at, or about, or maybe even above the dollar a litre threshold,” he said.
 
McTeague says the agreed-to cuts are small and don’t happen until December, so Wednesday’s hike in oil prices is a result of speculation. And he doesn’t think it will solve the over-supply problem, as smaller producers pushed to the side by the lower prices try to get back into the game.
 
He adds it’ll take new pipelines for Alberta’s resource revenue picture to improve in the longer term.