Gas Going Up To $1.25 A Litre Friday
Posted May 8, 2008 12:00 pm.
This article is more than 5 years old.
It was September 6, 2005 and the entire world was watching and worrying about the city of New Orleans. It had been just a few short weeks since Hurricane Katrina struck with an awesome fury that the legendary locale is still recovering from.
But while the home of the Mardi Gras was in tatters, so were oil platforms in the Gulf of Mexico, hit hard by the pounding storm. After the winds blew out, North America itself began to feel the effects as gas prices rose to the highest level ever seen in this city – $1.28.6. It was a temporary blip and costs deflated to $1.02.5 seven days later.
All of which brings us to a Friday in May 2008, when Liberal MP Dan McTeague is predicting that history is about to repeat itself. After gas prices rose more than two cents over the past two days, the fuel watchdog is telling drivers to prepare for more sticker shock at the pumps. He’s warning a litre of regular will cost you nearly $1.25 a litre in the morning, comparable to the days after Katrina. ( See his early warning website here.)
But this time, there’s no storm and no bad weather. What’s the excuse this time? A new record price for crude. The cost of a barrel jumped to $124 Thursday, driving up prices at the pumps worldwide. In Toronto’s case, that’s nearly three cents more.
We’re still better off than Montreal motorists, who are looking at shelling out $1.36.5 by the time the work week ends.
A few analysts suggest it may not even be the fault of human beings. “This appears to me to be computer-generated buying,” confirms analyst Linda Rafield. Some investors use software that buys automatically when prices rise to certain levels. Thursday’s record settlement may have triggered a flurry of electronic buy orders. “There is no fundamental news out to cause this market to move like this,” she concludes.
The end result – you pay more and more while it buys more and more. Now if someone could just find the off switch.
With files from The Associated Press
