It’s been a while since we’ve said this but…brace for higher prices at the pump as crude oil goes into day two of a significant rally as a result of cutbacks in production announced at yesterday’s OPEC meeting.
Oil prices were up over 9 per cent yesterday and have tacked on another 3 1/2 per cent this morning, going over $50 per barrel for the first time in over a month.
Gasoline prices are directly affected by this strength, and also the weakness in the Canadian dollar, and with the US set to raise interest rates this month, and possibly more than once next year, the downward pressure on the dollar will also boost gasoline prices.
Since mid-November the wholesale price of gasoline has jumped by almost 20 per cent; however, when looking at past OPEC deals, the real impact will depend on whether the cartel can keep their word and stick to the output cuts, or will the cheating start from day one? Stay tuned.