Major Gas Price Spikes Headed Canada's Way

Compared to Thursday, the commodity price has already jumped more than six cents a litre in NY, meaning the increase in New Brunswick is likely to happen tonight.

The price at the pump rose Thursday night in Montreal for a second time in three days, reaching an average of almost $1.35 per litre of regular fuel by Friday morning.

Prices are expected to remain high until refineries resume normal operation, the timing of which is still unknown.

The Colonial Pipeline, which runs from the Gulf Coast to the northeastern United States, has been shut down, causing gas prices to rise in Eastern Canada. The Ontario average is 1.20.

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Dan McTeague, senior gas analyst at GasBuddy.com, calls it "the Hurricane Harvey Effect" as the storm has a major pipeline and 16 refineries in the United States offline.

Gas prices in Regina jumped by seven cents a litre earlier this week.

IHS Markit said in a report Friday about 3.6 million barrels per day of Gulf Coast refining capacity or 20 per cent of the USA total is off-line, with a further 1.8 million bpd or 10 per cent operating at reduced rates.

"I would definitely. buy some gasoline", he said.

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In Western Canada, prices also leapt based on oil trading in Chicago, said Mr. McTeague.

As for how long these increased prices will last, McTeague says "that's the multi-billion dollar question", but he expects the problem to extend for weeks.

"We don't produce enough gasoline to allow even a small amount to be siphoned off or purchased by other parties south of the border, so they raise prices to ensure that gasoline prices wholesale are not attractive", he said. That's likely to keep prices high and lead to another spike several months from now as working refineries eventually have to go into maintenance, he said.

"We got a big jump on the prices in Canada", McTeague said Friday.

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