Metro Van gas prices could fall 15 cents after Thursday spike: analyst

Gas prices around parts of Metro Vancouver jumped overnight into Thursday, with one analyst saying it’s likely a “kneejerk reaction” to the Israel-Hamas war.

The price for a litre of regular was hovering around 185.9 in most parts of the region Thursday morning — about 10 cents more than most stations were posting a day prior.

But this rise isn’t expected to continue, according to En-Pro International Chief Petroleum Analyst Roger McKnight.

He says the gas prices you see “follow the daily movements of the wholesale price with a 24 hour delay before the new price hits the pumps.”

“The wholesale prices increased on Wednesday by 13.7 cents and accounts for the increase of around 10.0 cents today,” he said in an email to CityNews Thursday.

“The reason I believe that prices jumped was a kneejerk reaction to Israel-Hamas conflict wherein it was thought that there would be an immediate problem with crude supply.”

McKnight says the increase drivers saw Thursday morning was the result of an “overreaction.” He adds “suppliers rethought the increase with a 15 cent fall in wholesale prices as posted today.”

With that said, he expects gas prices to fall Friday or Saturday by as much as 12 to 15 cents per litre of regular.

In some places, drivers could find a litre of regular in the high 160s on Wednesday. This came after prices started coming down last week, as southern California refinery issues were resolved.

Volatility in oil prices

Meanwhile, when it comes to oil prices, UBC economics professor Werner Antweiler expects there to be continued volatility.

“We should not take a low price for granted. The same goes for high prices. What we can say for sure is there is a lot of dynamics in the market that could lead to price changes very rapidly and very significantly,” he told OMNI News, noting a change in oil prices will translate into what you’re paying at the pump.

He agrees the situation in the Middle East isn’t having a significant impact at this point when it comes to the oil market globally — but that could change.

“It could and there are some pathways through which it could be affected significantly if OPEC actually takes a particular stance in the situation,” Antweiler said.

“So, that said, that is today’s perception. We never know what will happen even a week from now. So therefore, today’s price settled around $83 US/barrel, there’s no guarantee that it’ll be at that level next week.”

While Antweiler says “most analysts don’t see the great likelihood of (oil) prices eclipsing $100 (per barrel),” he notes you will see gas prices fluctuate for now.

“We can see significant volatility in the short-term, and that will be reflected in the prices at the pump. I think the rule is, if you see the price as being low, go fill up the tank. You don’t know how long it will last,” Antweiler said.

-With files from OMNI News