At the end of April, many of you will get to enjoy a drop in gasoline prices in the U.S. or Canada.
On Thursday, the price of oil dropped to just over $40 a barrel, erasing nearly all of the gains made in 2014 that resulted in the cheapest gasoline on record this year.
The price of Brent crude, which is a global benchmark for crude oil and has been the main driver of the recovery in oil prices last year, fell to just under $42 a barrel Thursday on concerns that some producers in China, Russia and other regions could take steps to rein in production.
Most oil futures settled more than 1% lower, while gasoline prices didn’t set a new all-time low Thursday, but since gasoline is often hedged through futures contracts, it’s unlikely that prices will dip below $1.10 a gallon next week. Still, the continued drop in crude oil has resulted in lower oil prices at the pump for North Americans traveling home from the airport. The national average was $1.34 on Thursday, just 0.12 cents higher than the same day last year, according to AAA, Wright Express and Oil Price Information Service.
U.S. refiners in the Midwest are making gasoline, and there is no need to import it from other parts of the country. So supplies are sufficient for drivers, and they can expect to see prices beginning to dip at the pumps by next weekend.
Rates are lower in Canada, too, where refiners are returning from shutdowns caused by last summer’s wildfires in Alberta. Experts say the long-awaited break will likely become a trend as global supplies increase and demand falls.
In Canada, the price of gasoline is now expected to fall another 15 to 20 cents per gallon, maybe more, as refinery capacity rises and pump prices drop, says Shawn O’Neill, head of the Petroleum Additives Council of Canada.
Virtually all the cost of producing gasoline is passed through to the consumer, and taxes add to the final cost for motorists. Analysts say the duties that Canada levies on gasoline may be falling as it ramps up shale oil production.