jdobbin Posted February 16, 2009 Report Share Posted February 16, 2009 http://www.msnbc.msn.com/id/29210445/ Crude oil prices have fallen to new lows for this year. So you'd think gas prices would sink right along with them.Not so. On Thursday, for example, crude oil closed just under $34 a barrel, its lowest point for 2009. But the national average price of a gallon of gas rose to $1.95 on the same day, its peak for the year. On Friday gas went a penny higher. Prices were up for gas in much of Canada last week as well. In some cases, as much as 10 cents a litre. The reason given? Foreign oil is priced higher than West Texas. The predictions are that we will see rapidly escalating prices again in Canada and the U.S. Quote Link to comment Share on other sites More sharing options...
eyeball Posted February 16, 2009 Report Share Posted February 16, 2009 The reason given? Foreign oil is priced higher than West Texas. Another that's been given is that North America lacks the capacity to refine gasoline which is forcing up demand hence the price. Apparently no one's built a new refinery in NA for decades due to environmental concerns. So...whatever happened to innovation? How come no innovators have emerged to capture the demand for clean refining technology and reasonably priced gasoline? Wouldn't they stand to make a mint if they did? I think the crisis of confidence wracking our economy runs deeper than mere skepticism in quantum tranching or regulatory honesty, people are probably wondering if capitalism just flat out doesn't work as advertised and its reached the limit of how far it can go. Is that a precipece or a wall up ahead? Quote Link to comment Share on other sites More sharing options...
Wilber Posted February 16, 2009 Report Share Posted February 16, 2009 I think it has more to do with refining capacity, demand and the slumping Canadian dollar. I don't know what the oil companies are doing with their refineries but because of the lower gas prices, people are driving more and increasing demand. People are back to driving their SUV's and pickups. Commercial traffic is down because business is bad so the price of diesel has being going the opposite direction in spite of the lower Canadian dollar. Diesel prices haven't gone up at all. Up until lately the price of diesel had been higher than gasoline for over a year. Where I live it is now up to 8 cents a liter less than regular gasoline. Quote Link to comment Share on other sites More sharing options...
eyeball Posted February 16, 2009 Report Share Posted February 16, 2009 I think it has more to do with refining capacity, demand and the slumping Canadian dollar. I don't know what the oil companies are doing with their refineries but because of the lower gas prices, people are driving more and increasing demand. People are back to driving their SUV's and pickups. Commercial traffic is down because business is bad so the price of diesel has being going the opposite direction in spite of the lower Canadian dollar. Diesel prices haven't gone up at all. Up until lately the price of diesel had been higher than gasoline for over a year. Where I live it is now up to 8 cents a liter less than regular gasoline. Hmmm, I guess these must be all the unemployed deadbeats that have been tossed out of their homes and are now living in their vehicles and driving around looking for work. Well, there's no work here so...keep moving. Quote Link to comment Share on other sites More sharing options...
Oleg Bach Posted February 16, 2009 Report Share Posted February 16, 2009 Hmmm, I guess these must be all the unemployed deadbeats that have been tossed out of their homes and are now living in their vehicles and driving around looking for work.Well, there's no work here so...keep moving. Grapes Of Wrath -----God zoooks! When do the union busters come into the camp and break some heads with pick handles? It's satisfying to know in the not so long run that those who had nice middle class wealth and privledge....and as shallow materialist like to put down the white trash - will be joining the heap - then lets see the proud and lofty talk about "dead beats". Quote Link to comment Share on other sites More sharing options...
Wilber Posted February 17, 2009 Report Share Posted February 17, 2009 Hmmm, I guess these must be all the unemployed deadbeats that have been tossed out of their homes and are now living in their vehicles and driving around looking for work.Well, there's no work here so...keep moving. Both my vehicles are diesel so I'm smiling, for now at least. Quote Link to comment Share on other sites More sharing options...
August1991 Posted February 17, 2009 Report Share Posted February 17, 2009 I think it has more to do with refining capacity, demand and the slumping Canadian dollar.I agree with Wilber.Over the long term, variations in world oil prices explain almost 90% of variations in retail gasoline prices in Canada. Variations in the exchange rate may exaggerate this correlation. As a rule of thumb, you can add the US$ per barrel price to the 40 cent per litre excise taxes to get the retail gasoline per litre price. At $45 per barrel, retail prices should be around 85 cents per litre. Quote Link to comment Share on other sites More sharing options...
jdobbin Posted February 18, 2009 Author Report Share Posted February 18, 2009 Over the long term, variations in world oil prices explain almost 90% of variations in retail gasoline prices in Canada. Variations in the exchange rate may exaggerate this correlation. The prices are rising in the U.S. too. As a rule of thumb, you can add the US$ per barrel price to the 40 cent per litre excise taxes to get the retail gasoline per litre price. At $45 per barrel, retail prices should be around 85 cents per litre. Oil is now $35 a barrel and gas is 91 cents a litre on average. Quote Link to comment Share on other sites More sharing options...
M.Dancer Posted February 18, 2009 Report Share Posted February 18, 2009 .85 in Toronto Quote Link to comment Share on other sites More sharing options...
Oleg Bach Posted February 18, 2009 Report Share Posted February 18, 2009 http://www.msnbc.msn.com/id/29210445/Prices were up for gas in much of Canada last week as well. In some cases, as much as 10 cents a litre. The reason given? Foreign oil is priced higher than West Texas. The predictions are that we will see rapidly escalating prices again in Canada and the U.S. Let the tit fill and then snap on that milking machine full force and crank up the voltage! Drain the public to the point of paniced desperation - give them a little rest and then send in the vampires again ----- at least these oil guys have leaned to let the cow eat some grass and have a nice sleep before raping it again for it's life milk...they are getting smarter...not kinder just more pragmatically shrewd and ruthless...They are finding the limits and will play them. Quote Link to comment Share on other sites More sharing options...
geoffrey Posted March 7, 2009 Report Share Posted March 7, 2009 The gasoline price has everything to do with the CAD/USD exchange rate than it does with supply/demand right now. I paid $2.05/gallon in Seattle a couple weeks back, more than 50% off last summer. The Canadian dollar has declined 30% against the greenback since the summer of 2008. Our gas prices should move up 30% as a result. Approximates: Summer 2008 ($0.90CAD to $1USD) Oil: $140USD or $126CAD Gas $1.40/l in Canada Now ($1.30CAD to $1USD) Oil: $45USD or $58.50CAD Gas $0.80/l in Canada So oil has declined only 50% in Canada in Canadian terms, not the 70% it has in the States. Pump prices have decline about 45%. Not that big of a discrepancy, definitely could be due to local supply constraints or any number of factors. Canadians are paying a reasonable price for gas. Quote Link to comment Share on other sites More sharing options...
eyeball Posted March 7, 2009 Report Share Posted March 7, 2009 The gasoline price has everything to do with the CAD/USD exchange rate than it does with supply/demand right now. I paid $2.05/gallon in Seattle a couple weeks back, more than 50% off last summer. The Canadian dollar has declined 30% against the greenback since the summer of 2008. Our gas prices should move up 30% as a result. Doesn't the greenback seem a little ridiculously over-valued though? It seems its just as over the top as anything else these days. Quote Link to comment Share on other sites More sharing options...
geoffrey Posted March 8, 2009 Report Share Posted March 8, 2009 Doesn't the greenback seem a little ridiculously over-valued though? It seems its just as over the top as anything else these days. Overvalued? Perhaps. As the US issues more treasury securities and the demand for treasuries increases, people need more USD to purchase such securities which drives up the American dollar. Currencies react to supply and demand sort of like anything else. People love USD to buy t-bills. That's why it's so high. You can even see on "good" market days, the USD drops as people move to other investments in equities or whatever else. Banks and other firms are also deleveraging, which reduces the supply of currency, driving up the price (more deleveraging in happening in the US versus Canada, hence the swing in currency). Quote Link to comment Share on other sites More sharing options...
msj Posted March 8, 2009 Report Share Posted March 8, 2009 This article helps explain what's going on with respect to the US dollar (and essentially justifies Geoffrey's posts above): How a US financial crises rebounded to benefit the dollar: three pictures Quote Link to comment Share on other sites More sharing options...
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