Though there was speculation that gas prices may surge over the coming weekend, it seems oil markets may have slightly stabilized.  

Patrick De Haan, who is head of petroleum analysis at GasBuddy observed that yesterday there was a high degree of volatility on the oil and gas market, with oil prices bouncing from $100 a barrel and then plummeting to $92 a barrel.  

“They [oil prices] are down again today, another dollar and a half a barrel to about 91 and a half dollars. It's been quite a volatile day as new headlines come out,” he said. “Oil markets [are] digesting that. What looked like [it] would be a large price spike in gas bars across Canada, now will likely not come to fruition, at least for now.” 

According to GasBuddy.com, on Friday, Feburary 25th 2022, Airdrie’s gas prices were anywhere from $1.37/litre at UFA Cardlock in Airdrie – the cheapest, to $1.469/litre at Shell. 

“We may see a slight increase, but it will not relate so much to the situation in Russia. We are seeing a lot of stations at 146.9. A lot of that this weekend could be due to what is starting off as a transition to more expensive summer gasoline,” De Haan said. “This is starting to phase in across areas of the U.S. and Canada.” 

De Haan underlined that if there are increases in gas prices this weekend, they will more than likely be no more than a couple of cents on the litre. When asked why and how the Ukranian-Russian conflict is influencing the global oil markets and how that affects Canada, De Haan said that oil is a global commodity. 

“Brent crude oil is something that can be bought and sold in any country globally and it's that benchmark that determines prices everywhere. We are all tied together for better or worse and when something happens, the potential risk in one oil-producing country affects all oil consuming countries.” 

This means price sensitivities and price shocks are felt not just one the country where a certain event may take place, but all oil consuming countries.  

“For that reason, what happens in Ukraine with Russia, Russia is a very large, the second-largest oil producer globally and so what Russia does, can have profound impacts in the price of oil, which ripple effect down to Canadians, Americans, and really the entire global economy.” 

However, even with Eastern Europe being embroiled in a conflict that hasn’t been in decades, De Haan said that the oil and gas is optimistic regardless. 

“The fact that global oil demand continues to recover after plummeting during the pandemic and that does not look to change anytime soon, even with what is going on in Ukraine,” he said. “I think there's a lot of reasons that global demand will likely continue to outpace global supply and that will keep oil prices elevated, essentially insulating oil companies from action that happens overseas.” 

However, gas prices will be rising since there is now a transition to summer pricing creeping in and because Canada follows the American oil markets, the American markets move to a different type of gasoline in the summer to meet regulations and emissions requirements. 

“Because some products in Canada, due to ease of commonality, will make that change as well. When it comes to prices in the future, and the possibility of $2/litre, if they do occur, it would likely be relegated to Canada's most expensive areas; like Vancouver, New Foundland could see prices briefly eclipse that mark.”  

De Haan said that he doesn’t foresee that any of the other major Canadian cities are going to quickly jump to that $2 mark, and if it does, it will not happen within the next month or so. 

 

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