The good news is oil prices hit a 10-month high on Tuesday, bolstering the bottom line for the Alberta treasury. .The bad news is oil prices hit a 10-month high on Tuesday which inevitably means higher prices at the gas pump. .And for Alberta motorists, already paying the lowest gasoline prices in the country, it probably is not all that bad compared to the result of the country..Benchmark West Texas Intermediate closed at US$86.76 in New York, while UK marker Brent topped $90.01 in London, up a buck on the day. Alberta’s signature Western Canadian Select hit $78.62, which is also the highest since October of last year.. WCS prices hit year high .That in turn gave "investors" — speculators, in reality — a green light to go long and hard on oil futures until at least the end of the year as the US enters the 2024 election cycle. .As usual, Albertans have developments across the world to thank..That’s because Saudi Arabia and Russia both agreed to extend voluntary production cuts of one million barrels per day (bpd) and 300,000 bpd, respectively, through December..Make no mistake, both de facto Saudi boss Mohammed bin Salman (MbS for short) and Russian strongman Vladimir Putin have a shared interest in seeing $4/gallon gas in the Lower 48 next year..Unlike Alberta, which is banking on $75 to even up and post a small surplus, Saudi reportedly needs at least $100 per barrel to balance its own books to pay for MbS’ lavish social spending — which includes $7,000 in direct fuel subsidies for every man, woman and child in the Kingdom..Russia probably does not have much choice after its oil revenues fell almost 47% in the first half of the year..“It looks like the Saudis and Russians are on the same page about keeping the oil market tight,” wrote Edward Moya and analyst with New York-based forex house Oanda..Given that each dollar up or down from that $75 threshold is worth $630 million either way, the Alberta government is looking at adding another $6.5 billion onto its already substantial $2.4 billion windfall..And it could go higher..Shortly after the news hit the Saudi state news wire, spot crude prices surged almost 2% as analysts hiked already bullish forecasts. Goldman Sachs set a $93 per barrel 12-month price target for Brent, while UBS projected Brent to average $95 and WTI $91 over the next 12 months..It comes as US gas prices hit the highest seasonal level in more than 10 years over the Labour Day weekend, averaging $3.81 per gallon — but still well below $5 recorded in June of 2022. .The downside, at least for oil producers, is higher gas prices are sparking recession fears in both Canada and the US which would eventually lead to lower demand. .Ironically — or not — gasoline prices came down in Calgary on Tuesday after the long weekend, falling as much as five cents a litre in some locations. According to GasBuddy.com the average price for a litre of regular was going for $1.39 — $1.29 at Costco — even as oil prices fell..That’s because refiners are switched to winter blends as of September 1 which have a higher volume of additives and less actual refined product and demand typically falls after the peak summer driving season before ticking back up again in winter..Newfoundland had the highest average price per litre at $1.90 followed by BC at $1.89.
