A gas price watcher is warning that pump prices will rise significantly overnight, up to three cents a litre in parts of the country.
Dan McTeague’s website Tomorrow’s Gas Prices Today notes the rise would come ahead of the busy long weekend in both Canada and the U.S.
He predicts one of the biggest jumps in prices will come to Kamloops B.C., where he expects prices to rise three cents a litre.
Prices in other Western Canadian cities were expected to see smaller increases but McTeague says gas prices in cities in that region already carry a premium of 10 cents a litre.
His website predicts an overnight hike of 2.8 cents a litre in Toronto and a similar jump in surrounding areas. It also projects a two cent a litre spike in Montreal, a jump of 2.7 cents in Ottawa and one cent in Calgary.
Oil prices have fallen dramatically this year and now hover under $80 a barrel.
The economic situation in Europe, combined with a slowdown in U.S. hiring and a drop in Chinese manufacturing activity, has contributed to the sharp drop in oil prices since the winter.
Benchmark U.S. crude added 15 cents to end Tuesday at US$79.36 per barrel on the New York Mercantile Exchange.
However, analysts note that prices at the pump don’t necessarily move in tandem with the global market for crude.
The price at the pump is influenced by numerous other factors, such as wholesale prices for crude oil and, to a lesser extent, markups by retailers.
On a daily basis, retail gas prices do not fall in lockstep with the reported price of crude because oil is typically sold in transactions ahead of time, also known as futures contracts.
Earlier this week, Statistics Canada reported that May’s inflation rate fell almost a full point to 1.2 per cent — the lowest since June 2010. The big reason for the drop was gasoline prices, which fell 2.3 per cent from this time last year.
Gasoline prices rose almost 30 per cent in May of 2011 on an annualized basis, before beginning a pullback in June. This year, the peak appears to have occurred in April and the retreat started in May. However, analysts warned earlier this year that the price of gas could still rise this summer.
By province, drivers in British Columbia are paying the most at the pump at an average of 132.32 cents a litre, while oil-rich Alberta commuters are paying the lowest prices at an average of 113.21 cents a litre.