Across the country this winter gas prices are expected to rise – but those filling up on the east coast may find prices steeper than drivers out west. This difference in rate is due to Canada’s two-tiered crude oil market, as our crude is supplied by two different sources: Brent and West Texas Intermediate (WTI).
The reason Western drivers may see pump prices rise more slowly than the rest of the nation? A study by Statistics Canada says gasoline prices in Central and Eastern Canada are rising more quickly than those in the West and this is due to the two markets Canadian refineries deal with.
East vs. West: A Supply Showdown
In the West, gasoline prices are set by the West Texas Intermediate crude. In the East, refineries import a great deal of crude from overseas.
Both act very differently
WTI tends to move in relation to North American factors, such as driver demand, economic growth and natural disasters like Hurricane Sandy. Meanwhile, Brent reacts to events such as the European debt crisis and middle east conflict in oil-producing nations like Libya.
Here are the basics about WTI and Brent
|WTI Crude Oil||Brent Crude Oil|
|Sourced and refined mostly in the Midwest and Gulf Coast regions of the U.S. Light, “sweet” crude oil (i.e. low sulphur content)Very high quality, excellent for refining gasoline. Named after the geographic region.||Sourced from the North Sea area. Also “light” and “sweet”, but less so than WTI. Good for making gasoline and middle distillates, like kerosene and diesel. Named after the Brent Goose.|
Gas Prices by City
Depending on where you live in the country there are still huge differences for what you pay for gas. Check out some of the prices as of December 6th, 2012.
- Vancouver 121.9 cents /litre
- Calgary 98.9 cents /litre
- Saskatoon 109.9 cents /litre
- Toronto 121.5 cents/litre
- Ottawa118.7 cents /litre
- Montreal 128.4 cents /litre
- Fredericton 119.9 cents /litre
- Halifax 124.4 cents /litre
- St. John’s 125.9 cents /litre
Source: Tomorrow’s Gas Price Today
What to Expect this Winter
Gasoline now makes up almost six per cent of Canadians’ household budgets, according to Statistics Canada. In its latest Winter Energy Outlook, The National Energy Board is warning Canadian drivers that gasoline is due to average from $1.20 to $1.40 per litre this winter. It says the two factors are:
Economic Growth:The global economy remains fragile and risk-filled.
Weather: Environment Canada and the U.S. National Oceanic and Atmospheric Administration forecast normal temperatures for most of North America, implying seasonal average use of heating fuels such as natural gas and heating oil this winter.
What Can You Do to Keep Costs Down?
Of course, rising prices can present an opportunity to a savvy investor, who might look into investing in the energy sector. If and when those prices increase, those with stakes in Oil and Gas will see an increase in their portfolio.