Gas prices are down. Here’s why — and could they drop more soon?

Seasonal changes mean gas prices in Canada are heading for some of the lowest prices of the year, and the removal of the consumer carbon price means even more savings.

Canadians are likely saving a few loonies if they’ve gone to fill their gas tanks in the past few days, and prices at the pumps may continue to drop a little more.

Analysts say these recent drops are the result of a combination of seasonal factors, the rise in oil production worldwide leading to larger stockpiles, as well as the removal of the Canadian consumer carbon price in April.

“Gas prices have been falling noticeably across virtually the entirety of Canada. The national average is down over four cents a litre in the last week, and down to about 137.3,” says Patrick De Haan, head of petroleum analysis at GasBuddy.

“Quebec is leading the way with about a five-cent decline, Nova Scotia down about 4.7 cents a litre, small increases in New Brunswick and P.E.I. of about a penny a litre over the last week.”

He added: “We should continue to see pricing improvement, especially on the West Coast, where B.C. could see another five to 10-cent a litre decline in the weeks ahead. Almost everyone should continue to see gentler gas prices as the seasonal trends continue to push prices lower.“

A wide range of factors contribute to the price consumers pay at gas pumps worldwide, including the price of raw crude oil, geopolitical and economic developments, and weather-related events that can impact the industry.

Oil prices are set globally based usually on how much is available and how much is required.