Expect another gas price spike, analyst warns

He says stations hoping for a normal profit margin will likely end up at between 124.9 and 126.9.

There are many factors behind the retail price of gas in addition to the price of crude oil, which is in the $55 range, McTeague explained. He said Western Canada’s prices are set based on the spot price of gasoline on the Chicago Mercantile Exchange, and that jumped nearly 60 cents/gallon (approx. 15 cents/litre) last week, due to several factors.

“One, a disruption in a major pipeline that supplies a lot of gasoline into the U.S. midwest from the U.S. Gulf Coast, home to the largest complex of refineries in the world,” he said.

“The second factor is a couple of refineries had delayed or put off their fall maintenance in order to come to the rescue of some suppliers in the U.S. south and south east, when we saw the aftermath of Hurricane Harvey that knocked out a lot of those Gulf Coast refineries two months ago”

And the third factor is increasing demand from the U.S. McTeague said suppliers are having a tough time keeping up across the United States.

A recently falling Canadian dollar was also having an impact, and will continue to do so before things return to normal, McTeague added. But that may already be starting, with the Chicago spot price starting to go down. He said that might reach us by the middle or end of next week.

by Geoff Smith (@GeoffSmithLNN on Twitter)

Expect another gas price spike, analyst warns

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