Pump prices on the rise as OPEC+ cuts oil production

Canadians had a brief respite from summer's record-high gas prices, but new cuts to global supply mean filling your tank will leave your wallet considerably lighter once again. 

Driving the news: To stabilize oil prices and spur the recovery of a market that's seen losses of 25% over the past three months, OPEC+—a group of major oil exporting countries—announced it would cut oil production by two million barrels per day (bpd) beginning in November.

  • The market reacted as the oil cartel hoped—the price for Brent crude rose 1.7% following Wednesday’s announcement and is sitting at US$94.86 as of writing.

Why it's happening: As recession fears grow, oil demand is expected to decline. If producers overestimate demand, they could create too much supply and be forced to lower prices.

  • To stay ahead of the game, they are limiting supply to drive up prices now.

Why it matters for your money: The OPEC+ cuts are more bad news for fuel consumers in Canada. A decline in refining capacity, a devalued loonie, and the end of government gas tax cuts are also contributing to a higher price forecast.

  • Analysts forecast that oil could soon exceed US$100 a barrel again but also said a recession could bring prices down 40%

  • Prices are projected to trend around $2.04/L next year and $2.19 in 2023.

What can you do? When it comes to gas prices, not much—but you can always conserve fuel by modifying your driving style:

  • Accelerate gently: Putting the pedal to the metal is fun, but speeding up quickly guzzles a lot of gas. 

  • Lay off the brakes: Letting your car coast to a stop is much more fuel efficient than slamming on the brakes.

  • Don't idle: Sure, we all like getting into an already warm car in the winter—but letting your car idle will cost you.

  • Cut some weight: Making your car as light as possible will help manage fuel costs. Remove the roof or bike racks if you won't be using them often. 

Bottom line: We hope you enjoyed a brief summer respite from sticker shock at the pump, because higher prices are coming back.