‘Trump factor' could cause gas price volatility this summer, analyst says
CALGARY - The May long weekend is when gasoline prices tend to start levelling off ahead of the high-demand summer driving season.
But Roger McKnight, chief petroleum analyst with En-Pro International, says the 'Trump factor' may throw long-held expectations about gas price behaviour out the window.
McKnight says in January and February, refineries go down for maintenance to switch over to producing summer fuels, raising prices until they peak around mid-April.
What consumers see at the pump now might be what they get for the warmer months, but McKnight says the utterings of U.S. President Donald Trump on tariffs and geopolitical issues may jolt the market.
He says the effects of the federal consumer carbon levy's demise seem to be holding after Prime Minister Mark Carney did away with the charge on April 1.
The levy equated to 17.6 cents per litre of gasoline, and McKnight says pump prices remain about 15 cents per litre lower than before the change took effect.
He adds that refineries are running at about 90 per cent capacity, which is low for this time of year.
'The driving season is right around the corner, but the refining margins are so, so poor that the refiner is saying, 'Heck, we're just going to hold back … if we are not making good money on the stuff we're making,'' he said.
The price of crude oil, the raw product used to make gasoline and diesel, has been weak lately.
West Texas Intermediate, a U.S. benchmark for light oil, has been hovering around the US$60-per-barrel mark in recent weeks, about US$10 lower than it was just six months ago.
The Canadian Fuels Association, citing 2023 data from Kalibrate Canada Inc., said crude oil represents about 42 per cent of the pump price, with taxes, refining, distribution and marketing making up the rest.
This report by The Canadian Press was first published May 16, 2025.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
an hour ago
- Yahoo
Oil jumps 4% on report US embassy in Iraq is preparing to evacuate amid threats
Oil futures jumped more than 4% on Wednesday following a Reuters report saying that the US embassy in Iraq is preparing to partially evacuate amid security threats. West Texas Intermediate (CL=F) futures gained more than 4.5% to settle at $68.15 per barrel. Brent crude (BZ=F), the international benchmark, also jumped 4% to settle at $69.77 per barrel. The surge came after the report citing US and Iraqi sources said embassy employees in Baghdad were preparing for an ordered departure because of heightened risks in the area. Crude rose earlier in the session on supply worries after President Trump indicated during a podcast that he is less confident that Washington will reach a nuclear deal with Iran, a top oil producer. "I don't know. I did think so, and I'm confident about it," Trump said. Oil also gained after the US and China agreed to a framework and implementation plan to ease tariff and trade tensions following high-level talks in London. President Trump signaled his approval, saying the deal was "done" pending sign-off from himself and Chinese President Xi Jinping. Oil has rallied over the past month, following a sharp sell-off in April. Year-to-date WTI is down more than 4%, while Brent is about 6% during the same period. Ines Ferre is a Senior Business Reporter for Yahoo Finance. Follow her on X at @ines_ferre. Click here for in-depth analysis of the latest stock market news and events moving stock prices Sign in to access your portfolio
CNBC
an hour ago
- CNBC
Oil prices rise more than 4% on escalating Middle East tensions
U.S. crude oil futures rose more than 4% Wednesday on escalating tensions in the Middle East. Brent crude futures rose $2.90, or 4.34%, to close at $69.77 barrel. U.S. West Texas Intermediate crude gained $3.17, or 4.88%, to settle at $68.15. The U.S. is preparing a partial evacuation of its embassy in Iraq due to heightened security risks in the region, sources told Reuters. The U.S. military has authorized the "voluntary departure" of troops' dependents from the Middle East due to rising tensions with Iran, sources told the Associated Press. Meanwhile, United Kingdom Maritime Trade Operations warned of increased tensions in the region that could lead to an "escalation of military activity."
Yahoo
2 hours ago
- Yahoo
Oil prices jump after US-China trade framework deal
Oil prices jumped on Wednesday afternoon, following news that the US and China had reached a new deal paving the way to a full trade agreement. Brent crude futures (BZ=F) rose 1.7% to $68.01 a barrel, at the time of writing, while West Texas Intermediate futures (CL=F) climbed 2.1% at $66.39 a barrel. US and Chinese negotiators said overnight that they had agreed on a framework deal to restore their trade truce and continue further negotiations. US president Donald Trump then said in a social media post on Wednesday afternoon that Washington's deal with China is "DONE, SUBJECT TO FINAL APPROVAL WITH PRESIDENT XI AND ME". Stocks: Create your watchlist and portfolio "WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%," he said. The latest thawing in the trade spat between the two superpowers offered some relief for investors, as concerns that a tariff-induced economic slowdown could impact demand for fuel have weighed on oil prices. In a note on Tuesday, Capital Economics climate and commodities economist Hamad Hussain said: "Greater oil demand within OPEC+ economies – most notably Saudi Arabia – could offset additional supply from the group over the coming months and support oil prices. However, given that any boost to demand will be seasonal, we still think that Brent crude prices will fall to $60pb by the end of this year. The pound was little changed against the dollar on Wednesday afternoon, trading at $1.3507 at the time of writing, following the UK government spending review. Reeves delivered the spending review on Wednesday, setting out government departmental budgets for the next few years. Key announcements included a £29bn per year increase in funding for the NHS, while the government's defence budget is set to increase from 2.3% to 2.6% of gross domestic product (GDP) from 2027. Reeves also shared details of a £39bn boost to funding for affordable housing and £15.6bn for transport projects in England's largest city regions outside of London. Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "Rachel Reeves' spending plans have been greeted by a calm reaction from financial markets. Read more: Spending review: Rachel Reeves unveils more funding for schools, NHS and defence "Key to the spending review was not scaring away investors in UK government debt. The UK needs to keep them onside, to keep the costs of borrowing lower, as if the UK is seen as fiscally untrustworthy, gilt holders demand more bang for their buck to bankroll the nation. "For now, it seems to have done the trick. UK 10-year gilt yields have edged up slightly but remain lower than levels reached earlier in the session. It indicates government's latest tax and spending plans have not ruffled more feathers among bond investors. "Hopes appear to be kept alive that the focus on infrastructure spending will provide the essential ingredient to boost growth, which could increase the tax take and relieve pressure on government finances ahead." US inflation data released on Wednesday afternoon showed that the consumer price index (CPI) rose by 0.1% in May month-on-month, which was below 0.2% April's rise and lower than economists' estimates of a 0.2% monthly gain in prices. On an annual basis, CPI rose 2.4%, a slight uptick from April's 2.3% gain, which marked the lowest yearly increase since February 2021. Read more: Why Rachel Reeves' spending review may lead to tax rises Nicholas Hyett, investment manager at Wealth Club, said: "On the face of it these numbers should ease some of the inflationary worries, with both headline and core inflation coming in lower than expected, and therefore make rate cuts more likely." "The challenge is that while inflation isn't rising as fast as expected, it isn't falling either and a lot of today's undershoot is down to falls in global energy prices." The US dollar index ( which measures the greenback against a basket of six currencies, was down 0.2% on Wednesday afternoon at 98.88. The pound dipped 0.2% against the euro (GBPEUR=X) at the time of writing, trading at €1.1809. Gold prices rose on Wednesday afternoon, as investors weighed developments on trade and concerns around economic growth. Gold futures (GC=F) climbed 0.3% to $3,353 per ounce at the time of writing, while the spot gold price advanced 0.2% to $3,329.15 per ounce. Richard Hunter, head of markets at Interactive Investor, said: "Details of the [US-China] framework which has been agreed in principle were patchy and in any event yet to be signed off by both presidents. Read more: FTSE 100 LIVE: Global stocks rise after softer-than-expected US inflation reading "Chinese exports of rare earth minerals are likely to have been high on the agenda, although at this stage it has not become apparent what China may have negotiated in return," he said. "Even so, the two days of talks represent progress and the hope is now that the more conciliatory momentum can be maintained." However, fears around the economy were also in focus, after the World Bank cut its global growth forecast. The Washington-based lender said on Tuesday it now expected global growth to slow to 2.3% in 2025, which is nearly half a percentage point lower than the rate that had been expected at the start of the year. While the World Bank said a global recession was not expected, it said that if forecasts for the next two years materialised, average global growth for the first seven years of the 2020s would be the slowest of any decade since the 1960s. In broader market movements, the FTSE 100 (^FTSE) was up 0.3% to 8,876 points at the time writing. For more details, on broader market movements check our live coverage here. Read more: The UK's rental boom is over What you need to know about UK's private stock market Pisces Stocks to watch this week: TSMC, Adobe, Tesco, Bellway and InditexError in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
