Canadian Gasoline Price Drops before the Start of Long Weekend

Gasoline prices are falling before the long weekend of Canada Day. The current decline has not been seen for almost 20 years.

Dan McTeague, Tomorrow’s Gas Price Today website founder, said that the current drop in gas price never happens. He added that such a sharp dip in prices has not been seen since the early parts of the 1990s.

According to McTeague, he expects the price of gas to decline to 117.7 cents per litre at the start of the long weekend. During the same period last year, gasoline price was at 126.8 cents per litre.

The price reduction is due to the lesser gas consumption of people, said the former MP.

He said that if gasoline prices fall further, it probably mirrors market fundamentals which will be the first in a very long time. He said that it should be demand and supply that dictate prices and that has not happened for a long time. Yet, it is already happening now.

According to Earl Sweet, BMO Capital Markets’ senior economist, the drop may be mostly attributed to the worries of investors regarding the condition of the global economy. Europe’s instability implies an investment strategy of ¬†avoiding risky commodities, such as natural gas and oil. Lower prices will most likely continue and stay.

He particularly said that current crude oil prices will probably stay within the $75 to $85 range over the summer. And that price will most likely keep the cost of gas at their current level or even lower.

By: Chris Termeer