Oil prices have dropped about 35 per cent from mid-summer highs because of a higher U.S. dollar, lower demand and most particularly a glut of global supply.
While the price drop has led to losses on the Toronto stock market and concerns for provincial budgets in Alberta, Saskatchewan and Newfoundland and Labrador, it's forecast to bring relief to Canadians filling up at gas stations.
Dan McTeague, a former Liberal MP and founder of price-tracking and forecasting website TomorrowsGasPriceToday.com, said oil prices tend to suggest where gasoline is going to go, often within 48 hours. That's on top of prices that typically go down in the fall anyway.
McTeague's website shows gas prices dropping across the country. Prices listed in cents per litre on the site at mid-day Friday included:- Vancouver 124.9
- Edmonton 91.9
- Calgary 98.9
- Regina 102.9
- Winnipeg 99.4
- Toronto 113.9
- Ottawa: 102.9
- Montreal: 116.4
- Fredericton: 109.9
- Halifax: 115.9
- Charlottetown: 116.9
- St. John's: 115.4
The website's seven-day forecast for all these cities predicted a 100 per cent chance prices will go down.
On Friday, the January crude contract on the New York Mercantile Exchange was down $4.90 US from Wednesday's closing price to a 4½ year low of $68.79 a barrel.
Analysts estimate that plunging prices will result in savings for drivers.
"Those savings will make their way through the economy and lower costs" including lower taxi fares, McTeague said.
He expects prices to stay low until late winter or early spring.
However, energy analyst Roger McKnight of En-Pro International cautions there are some factors working against lower fuel prices for consumers, such as the falling Canadian dollar, which lost three quarters of a cent on Thursday.
The pressure kept up Friday with the loonie losing another 0.64 of a cent to 87.61 cents US even as Statistics Canada reported that third-quarter gross domestic product ran ahead at an annualized pace of 2.8 per cent. That was much higher than the 2.1 per cent rise that economists had expected.
McKnight adds that as oil companies make less money producing oil, they will likely look to boost refining margins.
TSX extends losses
Meanwhile, the Toronto stock market extended its losses Friday as energy stocks continued to sell off.
The S&P/TSX composite index dropped 129.67 points to 14,792.77 on top of a 116-point slide Thursday.
The TSX energy sector lost two per cent after prices fell to 4½-year lows, barely above $69 US on Thursday.
U.S. stocks ended mostly lower in a holiday-shortened session.
The Standard & Poor's 500 index eased five points to close at 2,067 Friday.
The Dow Jones industrial average rose less than a point to close at 17,828. The Nasdaq edged up four points to 4,791.