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Analyst predicts Metro Vancouver gas prices will only jump two to five cents per litre after Saudi attack

Last Updated Sep 16, 2019 at 6:40 am PDT

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Summary

Metro Vancouver could see a jump in the price of gas after an attack on Saudi Arabia's oil industry, an analyst says

Drone attack on critical Saudi oil facility has the potential to put five-percent dent in global crude supply: analyst

Dan McTeague believes the attack will result in a two-to-five cent/litre hike in Metro Vancouver gas prices by mid-week

METRO VANCOUVER (NEWS 1130) – The price of gas is still sitting around $1.50 per litre for much of Metro Vancouver Monday morning, but it is expected to go up after an attack targeting the oil industry in Saudi Arabia over the weekend.

The drone attack on a critical oil facility on Saturday has reportedly crimped global crude supply by as much as five per cent and is particularly worrying for countries that rely on Saudi oil, but energy analyst Dan McTeague says the North American price of oil hasn’t spiked quite as dramatically as overseas crude prices.

“Markets are roiled but they are not as bad as one would have originally thought. As I suggested on Saturday, we would see prices on Asian markets storm upwards of $10 per barrel,” McTeague tells NEWS 1130.

“But they have since dropped off as North American traders are not as concerned about the attack in Saudi Arabia and are probably taking a longer view as to whether or not this is a temporary situation or it will last several weeks.”

In which case, McTeague says, prices will start to go up. But as it stands now, he believes the attack will result in a five cent per litre hike in Metro Vancouver gas prices by mid-week.

“Coincidentally, that happens at a time when we do traditionally see prices drop here in Canada as we shift back to cheaper-to-make winter blends of gasoline. By federal statute, you have more expensive summer gasoline from April 15 to September 15. After that, the next six months tends to be a lot cheaper.”

McTeague predicts that will offset the spike in the price at the pump, resulting in a net increase of only two to five cents per litre by Wednesday.

“So we may not be seeing a big increase, but we will really have to wait until late this afternoon to get a better idea of what gas prices will look like. There will be no change tomorrow, it’s all likely to happen — if anything — on Wednesday.”