The season of low prices at the pump could soon be over as gas prices are expected to rise as we head into summer.
Michael Hainsworth with Business News Network was on CJME Morning Snow Tuesday. He spoke about what lies ahead for refineries and consumers.
“We’re in what’s called the shoulder season for crude oil,” explained Hainsworth.
He said, essentially, refineries retool and go offline as they switch over to summer gasoline. That means gasoline supplies get drained and crude oil supplies build up leaving a low supply, high demand scenario.
“Even though the price of crude oil may fall, because those refineries are not back online at full capacity, we’re seeing the gasoline supplies sapped enough to keep that price up,” Hainsworth said.
Hainsworth said the globe is oversupplied by 1.5 million barrels of crude oil. According to the people he has been talking to, that number is expected to be reduced to 200,000 by the fall.
Hainsworth expects demand for crude oil to rise for the remainder of the year.
“The other side of it too, is that economic activity tends to pick up again as we move out of the summer and into the fall,” Hainsworth explained. “And so, by the end of the year, all said-and-done, crude oil prices are expected to average around $42 to $43 a barrel.”
As of Sunday, gasbuddy.com said the average price per litre in Regina is 87.4 cents. The average in Saskatchewan was 90.55 and the national average was 99.9.