Gas prices begin to fall from record heights as market fears of recession grow
Global News
Prices dropped about 12 cents a litre overnight in Ontario and fell by smaller amounts in other parts of the country after a big dip in the price of crude oil this week.
Gasoline prices dropped about 12 cents a litre overnight in Ontario and are down across much of Canada after a big dip in the price of crude oil this week that analysts say could be linked to recession fears.
GasBuddy reporting prices were down to about $1.79 in major cities in Ontario Thursday from $1.91 the day before, while cities like Vancouver and Montreal saw prices drop around six cents overnight.
Prices elsewhere in Canada should catch up soon to Ontario, said En-Pro International chief petroleum analyst Roger McKnight, who expects prices to continue to fall in the coming days.
“The 12 cent (decline) was due to basically market forces. It goes down another three tomorrow, and believe it or not, I’m looking at another seven on Saturday.”
He said the drop came despite gasoline inventories still being low, pointing to the shift coming largely from a change in investor sentiment.
“Someone on Wall Street said let’s bang a futures down, the futures market on New York Harbour, because they think we’re heading for a recession here and that’s just gonna erode demand severely. People won’t need much gasoline because they won’t be going anywhere, so that’s why the prices came down. It’s a complete turn of the tables if you ask me.”
Rory Johnston, founder of Commodity Context, says the lower prices at the pump come after crude dropped by about US$10 to fall below US$100 a barrel on Tuesday.
“The big thing we’ve seen kind of over the last month, over this week is a very pronounced fall off in both the value of crude oil globally as well as the kind of relative value of gasoline.”