Petroleum analyst predicting even bigger drop in gas prices

Gas prices are expected to drop significantly in the coming days.

Dan McTeague is a petroleum analyst and is part of a group called Canadians for Affordable Energy. He told Gormley that another drop of eight cents per litre is expected at the pumps.

“(On Wednesday) they will be a lot closer to 88 (or) 87 (cents per litre) with some stations pushing towards the low 80s,” McTeague said. “(The price) may be 81, or even 80.9 at a place like Costco.”

McTeague said the last time prices were that low was in February 2016. Oil prices have plummeted on the markets in the past few days, taking gas prices with them.

“It’s actually ironically the time which Saudi Arabia went and tapped on Russia’s shoulder and said, ‘Maybe we should sit down and have a production agreement,’ ” he said.

That agreement, McTeague said, managed to stabilize prices but now seems to be unravelling, triggering a price war.

McTeague doesn’t seem to think it’s going to last long.

“Russia at this time of year doesn’t sell a lot of oil to the rest of the world. It pretty much consumes all of that which it produces during the winter … It’s only when we get into the warmer weather that it becomes a problem for them because then they realize they’re not getting what they need as a return,” he said.

As for the Saudis, McTeague said their oil reserves aren’t as big as they might claim.

With the U.S. being the top oil producer in the world, McTeague thinks other countries will get back in line very quickly.

“(Russia and Saudi Arabia) will come to their senses very quickly when they realize Americans can continue to produce oil at 33 bucks a barrel and they can’t,” he said.