This would explain why the price on the board of the Shell station near my bus stop has been creeping steadily up over the past couple of weeks, to a recent-memory high of 105.5 cents a litre today, up markedly since I took this pocket-camera shot a few weeks ago.
In its monthly report, the Vienna-based IEA said global crude output was down sharply as a result of production cuts by the Organization of Petroleum Exporting Countries. However, it added: “The primary driver of higher prices has been the tight U.S. gasoline market.”
Many U.S. refiners — as well as Canada’s Imperial Oil Ltd. — experienced unplanned or longer-than-anticipated maintenance shutdowns this winter and spring, driving down gasoline inventories to five-year lows. Canadian gasoline prices reflect conditions in the U.S. markets, with southern Ontario in particular moving in lockstep with wholesale markets in New York.
The U.S. Energy Information Agency reported this week that stocks were 4 per cent below year-ago figures, while, in spite of higher prices, motorists drove up demand by 2.5 per cent.
Here‘s the more technical Financial Post version. OPEC is indeed a cartel that controls a significant portion of world production, but that’s not the cartel that the more exciting commenters on the Globe story are talking about. They blame the oil companies for high prices. The oil companies and refineries go absolutely flat-out with everything they can sell. They’re not holding anything back. If they could, why would gas have cost 75 cents a litre a few months ago? Why not screw us hard at all times?
Anyway, with supplies this tight, watch for them to try begging off their clean-burn requirements so they can sell more high-particulate gas (again, a sign that they want to keep as much fuel flowing as they can). How the public reacts will be an important indication of how firm the new commitment to green causes is.