Rebounding oil prices spur price rise at pumps, analyst says

Expect to pay more at the pumps for the next few days.

There are a few reasons why, according to Dan McTeague, a petroleum analyst with GaspriceWizard.com who joined the Greg Morgan Morning Show on Friday.

The first is because wholesale prices for gasoline prices have jumped up to about $1.13 per litre, prompting retailers to adjust the prices they charge at the pumps.

“So the difference between $1.219 … and $1.13 is really the retail margin,” McTeague said.

As well, McTeague has observed gas stations engaging in “cutthroat competition” lately.

“Gas stations often sell fuel at or below cost. It’s OK to do that for a few days but you have to be selling a lot of beef jerky to make up the difference,” he said. “If your primary business is selling gasoline, you’re losing two or three cents every time you sell it at $1.10 or $1.13.”

The price of crude oil has also affected the price of gas.

West Texas Intermediate (WTI) has done a “u-turn,” McTeague said, rebounding to about $60 per barrel.

McTeague expects prices to go back down.

“I suspect that over the next three to four days … you’re likely to see prices trend down towards about $1.16, especially in the afternoons and evenings,” he said.