Gas prices to significantly drop amid tumbling price of oil
Posted Jul 13, 2022 03:17:00 PM.
Ontario drivers are about to get some more relief in the form of another significant drop in gas prices.
Roger McKnight, chief petroleum analyst at En-Pro, tells CityNews the price at the pumps will fall eight cents at midnight, reaching 177.9 cents a litre at most Ottawa stations.
The drop will bring the price just one cent shy of June’s low of 176.9 cents a litre. That price, the lowest since April, was hit last week after prices plunged 15 cents in two days.
It's official… Thursday, July 14
GAS GOING DOWN 8 cents:
GTA, KW, Ottawa 1.779
— Roger McKnight (@RogerMcKnight) July 13, 2022
Wednesday saw a slight increase overnight, with the average price currently sitting at 185.9 cents a litre.
The cheaper gas prices can be attributed to a drop in the price of oil and the speculation of an economic recession on the way. Oil tumbled eight per cent on Tuesday, down $8.25 to just over $95.
The falling price of oil is due to renewed COVID-19 lockdowns in China and ongoing concerns about an economic recession.
McKnight says 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,” he says.
Dan McTeague, president of Canadians for Affordable Energy, tells The Rob Snow Show on Thursday, July 14, that gas prices could drop another two cents on Saturday, July 16 and we could prices at gas stations drop to under $1.70 a litre at Ottawa gas stations.
“It's a lot better than we have seen,” he notes.
McTeague says if gas prices ever fall below $1.50 a litre it will be due to governments abandoning the idea of increasing taxes at the federal level, or there's a global recession.
“With that, we would see significant unemployment and slow economic outlook,” he added.
The Ford government implemented a cut of the gas tax by 5.7 cents per litre in Ontario on July 1, and prices dropped 11 cents on that day.
Listen to the full interview with Dan McTeague below:
