That's the case even though the price explosion makes no logical sense, says a senior petroleum adviser at En-Pro International, who described the market as being driven by emotion and speculation about what may happen in the Middle East. "There is no reason for prices to increase based on supply and demand in North America," said Roger McKnight. "As a matter of fact, we have a glut of supply. We have huge amounts of crude oil, gasoline and diesel. Inventories are at a 10 year high."
Violent protests in Libya pushed the price of gold to a seven-week high and the price of oil to a two-year high on Monday.
Gold, which closely parallels the price of crude, closed at $1,406.82 US an ounce while the price of oil broke the $90 US a barrel mark, closing at $91.42 US.
In Vancouver, oil's dramatic climb translated into gas prices ranging from $122.9 to $125.9 Monday, according to the website Vancouvergasprices.com. The average price is $124.6.
To get the cheapest gas in Metro Vancouver, you have to drive 51 kilometres to Aldergrove, a community of 12,000 within the township of Langley, where gas is selling at four stations for $1.149 a litre.
To get the cheapest gas in B.C., go to the Costco outlet at Kamloops, where you pay $106.9 cents a litre
The regional discrepancies in the price of gas are based on geography and the different taxing regimes throughout the province.
Everyone in B.C. pays a 4.45-cent-a-litre carbon tax, 8.5 cents in provincial motor fuel taxes, 10 cents in federal excise tax and on top of all those costs, five per cent HST.
In Metro Vancouver, TransLink also collects a 15-cent-perlitre transit tax.
Metro Vancouver consumers pay slightly under 44 cents in taxes on a litre of gas, Chevron Canada spokeswoman Deidre Reid said in an interview. Taxes are the second largest component of the price at the pump after the cost of crude, which is now 46 cents a litre.
To make matters worse for Metro Vancouver, wholesale prices here are based on those in nearby Seattle, which has the highest wholesale price in the U.S.
Kamloops, Kelowna and Prince George follow the prices in Edmonton and Calgary, which in turn follow the prices in Grand Forks, N.D., which are below Seattle prices.
"There is a huge regional discrepancy there just based on the geography," McKnight said in an interview from Oshawa, Ont.
But if you think the price of gasoline is high today, McKnight said, get ready for a shock. He said he's telling his clients in the transportation sector that it will be even higher tomorrow, so they should fill up their tanks now.
"This thing could get way out of control. You could see prices skyrocket," McKnight said.
"In terms of what is happening in the Middle East right now, it is becoming a bit nerveracking to say the least. "
Reports of production stoppages in Libya, coupled with fears that tribal leaders there may follow through on a threat to shut off that country's oil, sparked a jump in the benchmark Brent crude oil price to $108 US a barrel Monday, the highest it has been since 2008.
Although Libya ships mainly to Europe, and the Brent crude price usually trades at a discount to North America's West Texas Intermediate crude price (WTI), speculation over unrest spreading to other oil-producing states in the Middle East has pushed the Brent price above the North American price.
"The feeling is that the true price of crude should be closer to Brent crude price rather than West Texas Intermediate. Unfortunately the Brent crude price is following the emotions of what they feel may happen in the Middle East."
The price of West Texas Intermediate is based on inventory levels, McKnight said. By Monday evening it had climbed to $93.65 a barrel, up $7.45 on the day.
"All the logic of supply and demand is going to go right out the window," he said.
In fact the oil and gasoline glut in North America is so large that refineries are operating at only 81 per cent of capacity. Eighty-five per cent capacity is considered break-even, McKnight said.
THE PRICE OF GAS MONDAY
VANCOUVER AVERAGE:
124.523
B.C. AVERAGE:
116.481
METRO VANCOUVER
114.9 : Chevron, 26390 Fraser Hwy & 264th St., Aldergrove
121.2 : Domo, 8177 120th St. near 82nd Ave., Delta
122.5 : Chevron, 496 E Columbia St. & Braid St., New Westminster
122.5 : Chevron, 2525 Shaughnessy St. & Wilson Ave., Port Coquitlam
123.5 : Petro-Canada, 1390 E 33rd Ave. & Knight St., Vancouver
123.7 : Petro-Canada, 1289 E. Broadway & Clark Dr., Vancouver
125.3 : Husky, 8781 120th St. and Nordel Way, Delta
125.3 : Chevron, 3692 West Broadway & Alma St., Vancouver
125.3 : Shell, 5695 Granville St. and West 41st Ave., Vancouver
125.3 : Chevron, 6138 Kingsway and Curragh Ave., Burnaby
125.3 : Chevron, 12823 58th Ave. and 128th St., Surrey
125.3 : Esso, 20250 88th Ave. and 202nd St., Langley
127.3 : Shell, 1305 Marine Dr. and 13th St. (Full service & Airmiles), West Vancouver
127.5 : Petro-Canada, 8151 Granville Ave. & Buswell St., Richmond
FRASER VALLEY
105.9 : Esso, 2935 Blue Jay St. and Maclure Rd., Abbotsford
107.5 : Chevron, 32700 Lougheed Hwy near Park St., Mission
107.5 : Super Save, 29705 Lougheed Hwy & Silverdale Ave., Silverdale
107.9 : Petro-Canada, 28761 Fraser Hwy near Bradner Rd., Abbotsford
109.9 : Petro-Canada, 7591 Vedder Rd. and Luckakuck Way, Chilliwack
109.9 : Petro-Canada, 626 Old Hope Princeton Hwy & 6th Ave, HopeArticel from... For the latest updates PRESS CTR + D or visit Stock Market news Today
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