WINNIPEG — Diesel prices are expected to stay relatively cheap in Canada this spring despite recent strength in the crude oil market.
Diesel prices would be rising if it was a normal cycle, but they have been mired at their current level for the last few months, said Tom Kola of the Oil Price Information Service in New Jersey.
“The most common Canadian price has been stuck for awhile,” he said.
“It was stuck in the summer at a price that was too high. Now, across Canada we’ve got average prices of 91.6 (cents a litre).”
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That’s roughly 10 cents cheaper than at the same point six months ago and 28 cents lower than a year ago, said Kloza.
Crude oil has posted significant recovery in the past month, with the West Texas price creeping above US$40 per barrel at one point, the strongest price since early December.
But Kloza said there is resistance above that.
“At $45 (per barrel) is the level at which shale gas wells can get restarted,” he said. “So it’s a quagmire … and it’s going to have a tough time rallying through North America and indeed the world.”
Kloza expects diesel to remain relatively cheap through the year.
