Gas prices in Canada could "catapult far ahead of anything that we're taking into consideration today," warns a leading fuel analyst casting doubt on U.S. data linked to Wednesday's double-digit decline in gasoline futures and tumbling prices at the pumps.
The U.S. Energy Information Administration's latest gasoline consumption figures suggest demand slipped more than one million barrels per day below pre-COVID seasonal norms. According to the report, the four-week running average for the week ending July 31, 2020, during widespread COVID-19 lockdowns, was 8.656 million barrels per day. The average for the week ending July 29 this year was 8.592 million.
Dan McTeague, president of Canadians for Affordable Energy, is among several industry observers questioning the accuracy of the latest data.
"There's no way demand has dropped as the indication was yesterday," he said in a phone interview on Thursday. "There's a real danger that these unwarranted collapses in prices based on flawed data from the weekly petroleum inventory report could cause prices to snap back violently at the pumps."
"Our reliance on the weekly petroleum report may come under some scrutiny," he added. "The EIA is probably going to have to provide information that clarifies what they did this week."
McTeague predicts "short-term gain and long-term pain" for drivers in Canada, calling for prices on Friday morning to drop by an average of 12 cents to $1.679 per litre of regular gasoline in Toronto. He expects average prices in Montreal to dip to $1.829, and $1.859 in Vancouver.
McTeague says the "scary part" about the recent pull-back in gas prices is the lack of connection to macro factors like tight global supply and Russia's war in Ukraine.
"The [price] trajectory is completely indifferent to the data, which I think suggests that demand hasn't tanked," he said.
For those considering a big fill-up, McTeague suggests waiting until Saturday, if possible.
"It's probably as good as it's going to get, unless the markets decide there's some kind of recession that I haven't been told about."
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.