Gas prices may jump eight cents overnight

Drivers may want to fill up tonight. CTV’s Colton Wiens explains why.

Drivers in Waterloo Region might want to stop for gas Tuesday night as experts expect an eight cent bump at the pumps overnight.

Dan McTeague, president of Canadians for Affordable Energy, cited rising political tensions and lowering oil reserves as the reason behind the increase.

“If you’re not filling up today, then you’re going to be very disappointed, because the prices are likely to hold at least until Thursday,” McTeague said during an interview with CP24 on Tuesday.

He believe the cost of regular gas will increase by eight cents overnight, while diesel may see a 12 cent increase.

According to McTeague, as the conflict in the Strait of Hormuz continues, shrinking emergency oil supplies will keep prices at the pump high.

“But it does mean that the world is continuously creeping towards a shortage in supply, not just of oil, but we’re now starting to see it in gasoline and diesel so that, if you put it in terms of barrels of oil, if you could actually see barrels of oil, barrels of gasoline, barrels of diesel, diesel is $140 a barrel, gasoline is about $115 to $120. So, we are seeing the effect of a shortage, of scarcity, of an energy crunch. And it’s only a matter of time before some of the complacency that we’re seeing on Wall Street in the futures market, what they call the equities market, finally catches up with our reality,” McTeague said.

The Strait of Hormuz is one of the world’s most important oil shipping routes. McTeague said as other areas of oil supply see unrest, critical emergency supplies are running out.

“The U.S. Strategic Petroleum Reserve can’t go below 300 million barrels. It’s at 316 right now, maybe even 315 today. Another week and a half, and they will not be able to operate those salt mines, those 60 caverns they use in Louisiana. It means that the world no longer has the buffer. As long as it doesn’t have that buffer, it’s only a matter of time before markets really wake up and recognize we have a serious, serious energy crisis,” McTeague said.

He believes prices may start to reflect the ongoing concerns by the end of July or first week of August.

“The world is quickly running out of available oil to meet demand. So, it’s pretty clear to me that you can only ignore economic fundamentals for so long. And the complacency by Wall Street may be one thing, but the reality is about to hit everybody pretty darn hard. And I think unfortunately, the eight cent increase we’re going to get overnight is only a small taste of what’s to come in the next couple of weeks,” McTeague added.

While prices are expected to rise again, one recommendation McTeague always has for consumers looking for a saving is to never fill up before six at night. After six tends to be the best time to get the lowest price at the pumps.