CALGARY — Gasoline prices this summer are expected to drop below their current levels, which already seem like a bargain compared to what Canadian motorists paid a year ago.
Roger McKnight, a senior petroleum adviser for En-Pro International Inc., is predicting that a litre of gasoline will cost in the high 80-cent to low 90-cent range for the rest of July and August.
“The demand for gasoline is basically flat to negative, and this is the peak driving season,” McKnight said.
“So there’s no point in making snowshoes and trying to sell them in July.”
The average price of regular gasoline in Canada was 98.7 cents per litre during the first week of July, suggests the latest weekly pump price survey by Calgary consulting firm MJ Ervin & Associates.
The average price was roughly $1.02 in the prior week’s survey.
At this time a year ago, Canadians were on average paying $1.40 per litre.
One major difference between the prices of 2008 and the more subdued prices of 2009 is the value of crude oil, the raw commodity from which gasoline and diesel are made.
A year ago, a barrel of crude was trading at around US$140 and hurdling toward its all-time high US$147.27, reached on July 11, 2008.
On Tuesday, the crude contract for August delivery was $62.78 per barrel — a US$10 drop from just a week ago.
“Oil prices are obviously one piece of the puzzle, but it’s not the only one,” said ATB Financial senior economist Todd Hirsch.
“The other really big piece is just the recession blues hitting North American motorists.”