Fill up now, analyst says, as gas prices in Saskatchewan likely to jump soon Globalnews.ca

It’s a gift on everyone’s Christmas list this year and Santa is delivering.

Gas prices in Saskatchewan were on Thursday the lowest they’ve been since the start of 2022, giving consumers some much-needed relief from the decades-high inflation they’ve faced all year.

The lowest price gas can be found in Regina for 130.9 cents a litre. And in Saskatoon, equipped with a Costco membership, a liter can be found for under $1.30.

But one energy market analyst says it’s a gift that won’t keep on giving.

“What we’re seeing today, I think it’s a little gimmicky. These prices are very low compared to what we’re considering on fundamentals,” said Dan McTeague, president of Canadians for Affordable Energy.

“And we could see prices go back up in January, but we’re going to see a really steep rise in the summer driving season.”

According to McTeague, Canadians have seen an average drop of about 35 cents per liter in the past month.

It’s a decline he attributes to recession fears and cooling energy markets. But he believes the relief will be short-lived.

McTeague said, “Much of it is due to panic, probably oversold energy markets – traders who are not really physically involved with the actual distribution and production of energy products, but really money managers, hedgers, day traders with their are following algorithms on computers.” ,

“That’s what drove these prices down but it completely ignores the fundamentals that we have a tight supply of oil. We have a tight supply of oil, not only in North America but globally, especially diesel, and There is also a supply of heating oil and other products, and to a lesser extent gasoline.

McTeague said he believes consumers in Saskatchewan could see that 10 cents per liter jump by the end of January, and could see steady increases from there.

He said, “As much as there has been discussion, there has been no talk of ending the demand.”

“Really, what we are seeing is very strong, strong demand and that will carry us into 2023. Take advantage of this Christmas gift.”

How high does McTeague think prices will go next year?

Highlighting an increase in petrol carbon tax from 11.1 to 14.3 cents a liter coming on April 1, he says we could see prices as high as or higher than when they peaked in 2022.

“We got awfully close to $2 a litre. If governments don’t back down, this number will inevitably be touched again, maybe even higher.

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