If your eyes and ears work, you will no doubt know that the price of Oil has been on a tear of sorts for the last few years. I just saw on the news that Oil was $15/barrel as recently as 1999 – yet we touched $100/barrel during the trading day yesterday (Wednesday, January 2nd).
But there is more to this story than meets the eye. Last year, the price of gasoline at the pumps in Canada was in the low 90 cent range when Oil was trading in the $60 range. During the past weekend, gas was around $1.05, yet Oil is 85% higher in price.
But here is what really irks me: Gas is about 85 cents a litre in the States – and has basically maintained this 20 cent/litre beneficial spread over the last 2 years, even though our Loonie has appreciated by over 20%. Check it out for yourself at GasBuddy.com You can convert from dollars per gallon to cents per litre and you can also play with the time ranges. For a real hoot – you can overlay the price of Oil on top of that as well.
Nonetheless – the "tipping point" of high oil prices has not yet been reached – personally, I define that as when you start seeing people who commute to work in SUV’s by themselves starting to carpool.