For the first time in months, the price of oil climbed over $50 a barrel and experts expect it to keep climbing.
The Organization of the Petroleum Exporting Countries (OPEC) has announced crude production will be cut, leading to the boost.
“I can see prices on the prairies, not just Edmonton but Manitoba and Saskatchewan, as well as northern interior BC, going up three to four cents over the next couple of days, if not overnight,” Roger McKnight with EnPro International said.
Gas prices are also expected to rise due to the news. GasBuddy.com showed one litre of regular in Edmonton is going for an average of 87 cents Thursday morning.
McKnight doesn’t think OPEC’s production cut will last longer than a few months.
“Keeping track of who’s doing what is really the trick,” explains McKnight. “I think Saudi Arabia is really who is calling the shots here because they’re taking the biggest bite and if anybody starts cheating on their quotas, the Saudis will turn the tap on again and we’ll be back to where we were.”
McKnight thinks oil will continue to climb as well, at least for as long as production is down.
“Fifty-five [dollars per barrel], I think, would be a delightful number for everybody,” McKnight said. “I don’t know how the consumers are going to take it because they’re used to lower pump prices but that has to change with higher crude, especially in western Canada because pump prices follow the cost of crude.”
He doesn’t expect a big jump again at the pump but with oil going up, the price will see small increases.
As for the pipeline approvals, McKnight says both lines are great news for the oil industry and he applauds Prime Minister Justin Trudeau’s effort but thinks the big projects still need to be approved to really help the economy.
He says both Northern Gateway, which he doubts will ever be approved, and the Energy-East pipeline need to be approved. (twd/kb)