While gasoline prices in Canada have been relatively stable over the past couple years, apart from seasonal and long-weekend fluctuations, there has been a general expectation that prices could go up at any time – with the constant spectre of $1.50/litre just over the horizon.
Not only has it not happened, prices have fallen dramatically over the past few weeks, to less than $1.00/litre in some places – the lowest they've been in five years.
Industry analyst Dan McTeague, of tomorrowsgaspricetoday.com, suggests that prices could go lower still, before the end of the year. And there are indications that they could stay low for some time.
The reason is a sudden drop in crude oil prices, resulting from a glut of oil on the world market. While oil supplies have been increasing, in large part because of new shale-oil production in the U.S., global demand has stabilized if not fallen.
The result is basic economics theory: when supply outstrips demand, prices drop.
Nobody seems quite ready to predict just how long this situation will last but for the moment we can consider it an early Christmas present!