Diesel Cost at Lowest Level of Year as Oil Glut Continues

LONDON, ON and WASHINGTON, D.C. — Fuel prices are continuing another series of declines in both Canada and the U.S., according to newly released figures.

The petroleum information services provider, The Kent Group, reports the average cost of diesel in Canada fell $0.025 from last week to $1.061 per liter, the sixth consecutive weekly drop and the lowest price so far this year. 

Compared to the same time last year the price is down by $0.24 per liter.

In the Atlantic Provinces the average cost of diesel registered $1.028 while it came in at $1.108 in Quebec, $1.036 in Ontario and $1.075 in the Western Provinces.

Regular grade gasoline is also down, falling $0.031 cents over the past week, for an average of $1.145 per liter, its lowest level since May and its fourth straight weekly decline.

Compared to this week in 2014 it is $0.191 less.

Meantime, in the U.S. the average cost of diesel fell for the eleventh consecutive week, hitting its lowest level since October 2009, according to the country’s Energy Department.

The price of US$2.617 per gallon is US$1.226 less than the same time in 2014.

Regular grade gasoline fell for the fourth straight week, shedding US$0.06 from last week, for a national average of US$2.629, which is US$0.876 less than this time last year.

Following the report, the department issued its outlook for fuel prices, lowering its 2016 projection for diesel by $0.23 from a month ago to US$2.81 per gallon. It also revised down its price for gasoline by US$0.15 to US$2.40 per gallon.

This news came as the International Energy Agency issued a report saying the global glut of crude oil, which has led to oil and fuel prices falling, is expected to continue through 2016.

While that’s relatively good news for those who purchase fuel, it is anything but welcome news for Canada’s oil industry. It has been hit hard with layoffs of workers and production cutbacks as crude prices have plummeted over the past year, leading to fears the country is in an economic recession or at least very close to one.


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