Londoners can expect to pay more for gas in the coming weeks following a surprise decision by OPEC.
Most stations are charging 100.9 for a litre of regular Thursday morning in London, although there are some stations that are charging as low as 86.6.
If you can find gas for 86.6, pounce on it. It’s well below the national average and unlikely to last.
The price of crude rose sharply on Wednesday after the Organization of the Petroleum Exporting Countries announced a surprise deal to cut production output for the first time in eight years.
Oil prices rose 9% in the wake of the news, with the January contract climbing $4.21 at US$49.44 per barrel.
The last time a barrel of oil was above the US$50 mark was on Oct. 24 when it closed at US$50.52.
Gas price analyst Dan McTeague told AM980 the OPEC deal will impact commuters in London.
“For now speculators have taken this as a positive and have upped the price for both oil and gasoline on the future markets. That really means if you don’t like the current price for gas, it’s likely to go to a 105.9 pretty much everywhere across the markets.”
Drivers in London have been treated to relatively cheap gas compared to what other commuters in the province are paying.
London has been a source of intense gas wars at times and that may result in some deals for short periods despite the overall expected rise.
“There’s no doubt you’ll see an increase at the pumps. If you see decreases it has a lot more to do with retail margins and a few gas stations deciding to use gasoline as a bit of a loss leader. Other than that, prices are booked to be increasing five cents a litre Thursday into Friday,” said McTeague.
Ultimately, McTeague does expect gas prices to level out.
“Many will simply assume that whatever decrease in production by OPEC will be met with an increase in production by non-OPEC nations, which means it’s a wash, it’s a draw. That could send crude prices tumbling as well as gasoline prices.”
Analysts say will oil prices will rise, it’s unlikely we’ll see prices return to the $100 a barrel level we saw two years ago.
On Wednesday, OPEC announced the group has arrived at a consensus that will see its 14 members scale back a total of 1.2 million barrels a day starting in the New Year. Non-member Russia has also agreed to participate in the deal.