Analyst predicts 11 cent drop at gas pumps in Waterloo Region
A gas analyst is predicting an 11 cent per litre drop in gas prices on Sunday for Waterloo Region.
Dan McTeague, President of Canadians for Affordable Energy, said there is a fundamental disconnect between supply and demand which he expects will make the price of gas drop more than it has in 12 years.
“We're looking at a price decrease that we haven't seen on record since 2009 in one day,” McTeague told CTV.
Since early October, the average price of gas in Canada has hovered between $1.47 and $1.50 per litre, according to data from Natural Resources Canada.
“It also brings us back to prices here in Kitchener-Waterloo, Cambridge, our region here, back to prices we haven't seen as an average since August 25th. So it's been over three months. Welcome news, I think for everyone,” McTeague said.
According to McTeague, the best time to fill up will be between Sunday and Tuesday, as the good news for consumers won’t last long.
“I would expect oil to go back up $5 or $6 a barrel Monday and Tuesday. That would lead to a three cent a litre increase for us here at the pumps in Kitchener, Waterloo and Cambridge by Wednesday,” McTeague said.
Another factor for the change is "more serious and experienced" energy market traders have been on holidays for U.S. Thanksgiving, according to McTeague.
“I think energy traders are going to look and say ‘wait a minute, what happened on Friday in the United States with the juniors and the part timers coming out and making assumptions was totally wrong,’” McTeague said.
Gas prices could come back up, as the Organization of the Petroleum Exporting Countries (OPEC) could delay its plans to increase oil production.
McTeague predicts prices will remain high through next year thanks to supply issues, the strength of the dollar and the Clean Fuel Standard Regulation coming in December of 2022.
“That's going to mean a 16 per cent a litre increase at the pumps. So 2022, even though we could see oil, maybe moving down or stabilizing. Government policies almost inevitably ensure that the price of fuel continues to rise,” McTeague said.
McTeague's forecast comes as the global price of oil tumbled 13 per cent to below US$ 70 a barrel, after fears surrounding the newly discovered Omicron variant of COVID-19 prompted a mass oil selloff.