Petroleum pricing in Canada — the Q4 report

In quarter four 2021, crude prices reached a seven-year high and wholesale gasoline prices a thirteen-year high, sending Canadian pump prices to an all-time high in October.

January 31, 2022|2 minutes

Canadian crude prices reached a seven-year high in October and, along with strong refining margins for both gasoline and diesel, led to record-high retail prices in the fourth quarter.

In quarter three, the effects of Hurricane Ida severely affected North American crude oil production in the Gulf of Mexico, which lead to lower crude oil supplies coming into quarter four 2021. At the same time, the Organization of Petroleum Exporting Countries and allied countries (OPEC+) continued to stick to curb their monthly crude oil production — despite increasing global crude oil demand.

Despite a drop of over $14 per barrel in late November — spurred by the new Omicron COVID-19 variant and the potential impact it could have on oil demand — it quickly became apparent that the new variant produced milder cases, and oil prices quickly recovered and then continued to trend upwards for the rest of the quarter.

Each of these factors impacted North American gasoline inventories, keeping levels low.

Contrary to normal seasonal patterns, gasoline demand remained uncharacteristically strong throughout the fourth quarter of 2021. So with slowed production, low inventories and strong demand — gasoline refining margins soared throughout the end of the 2021.

The result of this?

In quarter four 2021, crude prices reached a seven-year high and wholesale gasoline prices a thirteen-year high, sending Canadian pump prices to an all-time high in October.