Why have gas prices gone up recently, and will they keep climbing?

Drivers who will fill their gas reservoirs in last week have undoubtedly noticed a recent increase in pump prices across Canada.

The increase is also considered in the world as the price of oil Reacts mainly to the latest developments in the Middle East. Specifically, climbing tensions between Iran and IsraelWith growing concerns, this could potentially attract other countries through diplomacy or even military involvement.

Canada obtains a large percentage of its oil, which is refined in petrol products, from sources from the Middle East, including Saudi Arabia and other OPEC +partnership nations.

“At the end of last week, when Iran and Israel launched attacks against each other, we saw the oil prices increase by 10%, and we are already starting to see this filter to pump Canadians,” explains Petroleum Patrick de Haan in Gasbuddy.

“The national average increased by about two hundred on the liter last week, and in the Maritimes or on the west coast, increases from three to four hundred on the liter, with more potentially.“”

The average price per liter in Canada amounts to around $ 1.36 for the regular note, the Manitoba, the lowest average at around $ 1.28, and the highest is in British Columbia at around $ 1.55, according to Gasbuddy data.

Although The rise in tensions in the Middle East is the main reason The prices of gas worldwide have increased recently, there are many other factors that go to the price that consumers pay for pumps, and this can sometimes be very unpredictable.

The fluctuating price of crude oil is generally a matter of supply and demand. In other words, how many barrels of oil are stored globally for shipping compared to the amount of consumers, or will need in the near future.

The uncertainty surrounding the world trade war and the pricing policies of American president Donald Trump also reflected in the prices of gas pumps. Indeed, the oil companies fix the prices according to what they expect so that demand is in the short term.

Many economists have warned that Prices could lead to a global recessionAnd the less economic production generally results in a less fuel consumption.

With expectations in early spring as the demand for fuel, and therefore crude oil, would decrease in the event of an economic slowdown, the oil companies have changed prices.

“When the economy does better, we also consume more oil. While if the economy potentially seeks negative growth, we could really see oil prices decrease, ”explains Haan.

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“The United States and its presidential administration have vigorously changed trade policy. There is still a large potential for possibilities there, and the only large needle engine has been a change in policies. ”

At the beginning of April, the average national gas price of Canada dropped to its lowest point of the year to just under $ 1.29, which was just about at the time that Trump began to implement tariffs on almost all countries of the world.

It was in addition to Prime Minister Mark Carney Remove the price of consumer carbonAnd that dropped the prices of gas almost overnight at the time.

Another factor that could mean an increase in gas prices in the near future is the inevitable increase in demand during the summer months.

This means maximum fuel demand used to travel, including by car, by plane, train or boat, and using recreational vehicles such as mountain biking and motorcycles, or even electric accessories and tools such as chainsaws and leaf blowers and more.

The consistency of the peak demand during the summer year after the year brings the oil companies to take a step ahead by modifying and stimulating production, as well as in storing distribution barrels throughout the summer.

Although this means that the peak demand and the rise in gas prices can be fast, it also means that prices could slowly fall after this peak has been reached.

“During the summer, because the oil construction supplies and refiners are carried out with the seasonal interview, the transition is carried out, which slightly reduces gas prices, the longest of summer continues,” said Haan.

“Thus, gas prices can return to this normal trend if the situation in the Middle East begins (to) defuse and if there is no new noise … things like the hurricanes season in the United States which could affect refining.“”

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