Relief At The Pumps May Be In Sight This Summer
Posted June 16, 2008 12:00 pm.
This article is more than 5 years old.
Gas prices held steady for drivers needing to fill up for the commute to work Monday and there may be some relief from expensive pump prices when the world’s largest oil producer boosts output this summer.
A litre of fuel is currently selling for about $1.34 per litre at gas bars across the city but there’s hope the high prices may fall in the coming weeks. Over the weekend Saudi Arabia announced that it would be increasing production by 200,000 barrels a day, or about two percent, by July.
Whether or not that will affect prices in the GTA remains to be seen. The nation increased its oil output by 300,000 barrels a day in May, but that move didn’t have much of an impact on the market.
But industry analysts believe things may be different this time. Traders reportedly believe that the sustained high prices at the pumps will result in a worldwide reduction in oil appetites and that may force the Organization of Petroleum Exporting Countries (OPEC) to stabilize the market.
“This is not a one-way story now. The industry is becoming more jittery and beginning to respond. Saudi, and OPEC generally, fear permanent demand erosion at these price levels,” Mark Pervan, a senior commodity strategist at Australia and New Zealand Bank in Melbourne, Australia, said.
The cost of a barrel of crude now sits at $138.86 (US).
Earlier this spring an industry analyst in Canada predicted gas prices as high at $1.40 by this summer.
Mysterious strangers pay for motorists’ gas fill-ups
