Metro Vancouver’s lower gas prices not expected to last

You may be feeling some relief at the pump Thursday morning, as gas prices fell massively overnight.

Paul Pasco, head gas analyst at Kalibrate, says the city saw prices fall an average of about 15 cents per litre for regular gas because of an unexpected drop in demand and a refinery in California came back online.

However, Pasco notes the drop isn’t expected to last.

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“[Don’t] expect these prices to last much more than one or two weeks. And then I would expect prices to start to rise again,” he told CityNews in a statement. “Prices are going up on the East Coast right now as oil prices continue to rise and while demand [on the West Coast] was lower last week the overall draws on fuel inventories exceeded expectations.”

While the news that China is considering shifting away from a COVID-zero policy has some optimistic about supply chains, Pasco says this will also increase global demand for crude oil.

“Crude demand is staying high and supply tightness hasn’t left. … Even in the forecast recession this means that crude and refined product demand can remain high.”

A fungus currently hitting corn producers in the United States — a major ingredient in Ethanol production — could also affect prices, Pasco says.

“Traditionally Ethanol producers sell the husks as feed and if the corn has the fungus they lose this revenue stream and will need to recover it directly from the cost of the product. It is unclear at this time how much of the corn crop could be impacted but the first reports of this problem are just starting to appear.”

Pasco says market factors are also pulling the retail price of diesel up too.

“So, fill up while prices are good and lower for both products. You may not be like me and having to plow and snow blow this morning but we are filling the jerry cans at this price and if I had them I would be filling my slip tanks.”

-With files from Sonia Aslam