Dan McTeague, a senior petroleum analyst for GasBuddy, says Canadian fuel prices are rising by more than those in the United States because the country is undersupplied with domestic fuel, causing an overreaction to supply shortages from closed refineries on the U.S. Gulf Coast.
All this, because as much as 31 per cent of USA gas production is offline due to the storm, McTeague said.
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 US total is off-line, with a further 1.8 million bpd or 10 per cent operating at reduced rates.
The closure of the Colonial Pipeline on Thursday, on top of major refineries including the largest, Motiva in Port Arthur, has led to exploding gas prices, McTeague said.
Locally, prices across the Greater Toronto Area may hit between $1.329 and $1.339 per litre on September 2.
"We're going to be looking at a much longer, protracted period of time when prices are going to be significantly higher than we expect heading into the winter turnover season".
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On Thursday in NY, the price of a barrel of crude oil for delivery in October rose USA $1.27 at closing, to U.S. $47.23.
The result has been an instant five-cent rise in gas prices in Toronto, for example - and McTeague is predicting a further jump of nine cents on Saturday.
While he said he can not give an exact timeline as to when gas prices may dip back down, he does say they won't be changing too quickly. In Quebec, we have denoted an increase of $ 0.15 to reach a $ 1.25 a litre.
"And a potential increase for Sunday", McTeague added.
McKnight said he thinks gasoline prices will drop back by two or three cents per litre next week throughout Canada.