Eyes on GTA gas prices as OPEC leaders meet in Vienna

OPEC oil ministers have decided to keep their present output target at 30 million barrels a day, despite an oversupply of crude and plunging prices

Here in Toronto, the price of gas is 15 cents cheaper than it was a year ago.

The low prices have not been great energy investments on Bay Street, but it has been great news at the pumps.

It wasn’t clear whether OPEC’s decision could send gas prices at the pump down even further.

Edmonton saw the price at the pumps fall below $1 this week, to 97.4 cents a litre.

Expectations that the group would not cut output to support the market saw the global price of oil slump another $1.89 on Thursday to $75.86 a barrel and then below $70 after the decision.

That drop has been driven by a boom in shale oil production in the United States — which is not an OPEC member — as well as weakness in some major world economies, causing supply to outpace demand.

OPEC powerhouse Saudi Arabia can weather such lower prices. But poorer OPEC members like Venezuela and Nigeria need levels close to $100 or above to fund national budgets.

OPEC still accounts for a third of the world’s oil sales, but the 32 per cent fall in prices is straining the tenuous image of unity it strives to project.

The cartel was able to stem a sharp drop in prices in 2008 by announcing its largest production cut in its history. But crude prices moving into the comfort zone then allowed members to overproduce past laxly observed output targets.

Experts say shale oil production turns too costly at the $60 a barrel level. That means that if Saudi Arabia’s strategy works, consumers would benefit in the short run — and OPEC over the longer term once prices rise.

“The Saudis want OPEC to remain relevant,” says analyst Phil Flynn. “The only way in their mind is to subdue the U.S. shale producer.”

See the below interactive chart of regular unleaded gas prices at the pump for the past five years for major Canadian cities. Data courtesy of Statistics Canada. Mobile viewers, click here.

Dashboard 1

View historic gas prices in Toronto going back six years; data courtesy of GasBuddy.com.

 

Toronto Historical Gas Price Charts Provided by GasBuddy.com

With files from The Associated Press

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