The price at the pump rose Thursday night in Montreal for a second time in three days, reaching an average of almost $1.35 per litre of regular fuel by Friday morning.
Prices are expected to remain high until refineries on the U.S. Gulf Coast return to normal operation, the timing of which will remain unknown until floodwaters recede and damage is assessed, they say.
Fourteen oil refineries, representing around 30 per cent of all oil-refining capacity in the USA, have been closed because of the flood water that has devastated Houston and dozens of other towns along the Gulf of Mexico coastline, said Dan McTeague, senior petroleum analyst with GasBuddy.com.
On Monday, the average posted price in Montreal was $1.16 for a litre of regular, a price that jumped to $1.27 a day later.
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McTeague said Harvey-induced fears of potential gas shortages in the eastern USA are mainly what's driving up prices this weekend in many eastern Canadian cities.
It said outbound pipelines, including the 2.6 million bpd Colonial system to NY, are unable to source product from Houston, leading to surging fuel prices throughout the United States.
This recent soar in gas prices is caused by the devastation to the Gulf Coast caused by Hurricane Harvey, which interrupted supplies to the East Coast.
"We got a big jump on the prices in Canada", McTeague said Friday. Now there is no indication the refineries have been damaged by the hurricane or resulting flooding. A better picture of impact on overall supply will start to emerge early next week, although oil futures contracts are already pointing to a price decline of about 2 cents starting on Sunday, he said. "We're just not in a position where we can sell spare capacity".
He said any fluctuations in retail prices, which were hovering at either 99.9 cents or 107.9 cents at many local outlets on Friday, would be as a result of gas stations adjusting their retail margins.