Fuel prices set for steep fall Friday after hitting record highs in N.B.
Diesel could shed 50 cents at midnight
Motorists in New Brunswick were greeted by record high gasoline and diesel prices Thursday morning but are likely to see significant relief arrive almost immediately on Friday, including diesel prices that could fall by 50 cents per litre.
The relief may be temporary, however, as markets have been producing a roller-coaster of prices all week.
"To suggest the oil market is confused would be an understatement, as we are in an unprecedented situation," the BBC quoted Stephen Innes with SPI Asset Management as saying.
In its normal resetting of maximum petroleum prices on Thursday, New Brunswick's Energy and Utilities Board added another 3.9 cents to what can be charged by retailers for gasoline, raising the total to $1.86 per litre.
Maximum prices for diesel were lifted 13.9 cents, to $2.14.
Those prices are records in New Brunswick and have jumped 28 and 42 cents respectively since Russia's invasion of Ukraine began two weeks ago.
The latest resetting by the EUB is based on tumultuous New York spot-market trading that occurred over the last week as of the end of business Tuesday.
But they are already stale given dramatic price reversals in those same trading markets on Wednesday.
According to an account by Reuters, the ambassador to the United States from the United Arab Emirates, Yousef Al Otaiba, said in an embassy tweet early Wednesday his country was pushing OPEC, the Organization of Petroleum Exporting Countries, to increase oil production to make up for Russian exports that are now subject to widespread international sanctions.
"We favour production increases and will be encouraging OPEC to consider higher production levels," said the statement in the tweet sent by the UAE embassy in Washington.
Ambassador Yousef Al Otaiba said in a statement to the <a href="https://twitter.com/FinancialTimes?ref_src=twsrc%5Etfw">@FinancialTimes</a>, “we favor production increases and will be encouraging <a href="https://twitter.com/hashtag/OPEC?src=hash&ref_src=twsrc%5Etfw">#OPEC</a> to consider higher production levels."<br><br>Read the full article: <a href="https://t.co/Yae7KSaaCT">https://t.co/Yae7KSaaCT</a> <a href="https://t.co/cZpXH8iAqC">https://t.co/cZpXH8iAqC</a>
—@UAEEmbassyUSThe statement triggered an instant and dramatic decline in international oil prices and in North American spot markets for refined products including gasoline, diesel and heating oil.
By the end of Wednesday the trading price of gasoline was down approximately 13 cents per litre. But the real collapse was in diesel, which fell up to 46 cents per litre and settled below where it had been before the Russia invasion began.
New Brunswick pricing rules require any market changes in gasoline or diesel of six cents per litre or more in a single day to be passed on to consumers within 32 hours of the close of trading.
That will force the Energy and Utilities Board to cut maximum prices at midnight.
Including the HST, that means a likely 15-cent reduction in maximum gasoline prices and up to 52 cents cut from the price of diesel in New Brunswick by Friday morning..
However, late Wednesday, according to the BBC, UAE's energy minister, in a tweet of his own, appeared to contradict the earlier statement from its embassy and that has markets surging higher again Thursday.
If trading prices for petroleum products end Thursday more than six cents higher, it would not change a reduction for Friday. Under New Brunswick regulations it will be added into prices on Saturday.