LONDON, ON and WASHINGTON, D.C. — Average diesel prices in both Canada and the U.S. have turned lower for the third consecutive week as oil prices could possibly head even lower while one nation’s crude exports have returned to its highest level in decades.
The Canadian national average cost of trucking’s main fuel declined $0.005 from last week to $1.042 per liter, its lowest level in four weeks, according to the petroleum information services provider The Kent Group.
Compared to this week in 2014, the average price is down $0.247 per liter.
Out of four main regions of the country, the only hike was in Ontario where the average price moved up from $1.018 last week to $1.022 this week, but was still the least expensive. The highest average cost is in Quebec at $1.119, followed by the Atlantic Provinces at $1.071 and the Western Provinces at $1.031.
With this latest drop the current price is down US$1.184 per gallon from this time last year.
In contrast, regular grade gasoline prices were mixed between the two countries. In Canada, the average moved up $0.011 from last week to $1.047 per liter, down only $0.076 from this time last year.
In the U.S. it fell US$0.035 from last week to US$2.059 per gallon with some predicting it will soon drop below the US$2 per gallon mark for the first time since March 2009.
All this activity has been happening as crude oil prices have averaged below US$50 for four straight months, the longest period since the global financial crisis, according to Transport Topics newspaper, as a global supply glut continues.
Helping to keep oil prices low has been Saudi Arabia keeping production high to maintain its share of the worldwide export market. There is little indication it will agree to cut back when the OPEC oil cartel meets to discuss crude prices and production later this week.
Adding to the situation is Iraq, whose exports are the highest in decades, according to the country’s oil ministry this week.
Some analysts are forecasting the price of oil could soon head as low as US$35 per barrel, if the U.S. dollar keeps gaining in value, which it may, especially if the U.S. Federal Reserve soon moves to push the country’s interest rates higher this month for the first time in several years.