Gas Prices Fall As Crude Oil Reaches 20-Month Low
Posted January 19, 2007 12:00 pm.
This article is more than 5 years old.
The price of crude oil fell to its lowest point in 20-months on Thursday, sparking a gas war across the city that saw prices drop to under 70 cents a litre.
“I haven’t seen it this cheap for quite awhile,” remarked one local at the pumps.
“This is where it should be. It shouldn’t be up around a dollar,” added another.
In fact prices haven’t been this low in several years, and are a startling turnaround from the post-Hurricane Katrina days when motorists were grumbling over $1.30+ a litre fill-ups.
What’s causing the change? The cost of a barrel of crude settled in around the $50 a barrel mark on world markets this week, a low not seen worldwide for many years.
The U.S. announced it had the highest crude inventories in more than four years, forcing some investors to jump off the petroleum bandwagon.
And threatened OPEC cuts either never materialized or didn’t have much impact.
Oil recovered a bit on Friday and that could mean a slight spike in prices, but you’ll still do a lot better now at the pumps than you did in 2006.
How long will it last? Given the volatility of the markets, it’s impossible to say, so top up now while the price is right.
“In the short term, market sentiment is overwhelmingly bearish and it’s possible for (the) price to go lower than US$50,” outlines analyst Victor Shum. “A lot is based on OPEC’s plans to cut production. If OPEC maintains supply discipline and sticks to production cuts, the oil market will gain.”
As always, the later the lower, so if you’re planning a fill-up, head out at night, when the prices are more likely to be in the upper 60s than the low 70s.
To find the best deals around the city, visit www.torontogasprices.com
