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Crude oil and gasoline prices are expected to hover near current levels through the summer, with the possibility of some further modest declines at the pump, according to Earl Sweet, Managing Director and Senior Economist, BMO Capital Markets.
"Over the summer driving season, gasoline pump prices will follow the lead of crude oil prices, which have swung sharply over the past year," said Mr. Sweet. "First, they moved higher as supply risks in the Middle East and North Africa leapt to the fore and, subsequently, sharply lower on intensifying euro zone stresses and slowing economic growth in China.
"At the moment, economics is trumping supply risk and this is likely to prevail until there are signs that European policy makers are taking sufficient steps to deal with their sovereign debt and banking crisis. Unless European leaders agree to decisive measures at their month-end summit, investors are likely to maintain a general aversion to risk assets, including crude oil," concluded Mr. Sweet.
Regardless of the direction oil and gas prices take this summer, it makes good sense for consumers to conserve fuel in any way they can. BMO provides the following smart steps to save gas and spare the wallet:
1. Use credit card rewards to cut fuel costs. Take advantage of credit
cards and gas cards that give you 'cash back' rewards and discounts on
your fuel purchases.
2. Tune up before you head out. An engine that runs properly will burn fuel
an average of four per cent more efficiently.
3. Relax and enjoy the ride. Avoid speeding and use cruise control on
longer stretches. According to The Canadian Automobile Association it
takes 20 per cent more fuel to go the same distance at 120 km/h than it
does at 100 km/h.
4. Quit idling around. Unnecessary idling wastes fuel, costs you money and
pollutes the air. A few minutes of idling burns through more gas than
turning your car off and on. Plan your route to avoid bottlenecks where
possible so you don't have to sit in traffic for long periods.
5. Control the car climate wisely. Air conditioning can drain your gas tank
and so can driving with the windows open. Keep your car cool by parking
in the shade, and on cool mornings and evenings, just use the car fan to
keep air flowing inside the vehicle.
6. Slow mo is the way to go. Fill your tank slowly by easing up on the gas
nozzle trigger. Turbulence from faster-flowing gas entering your tank
will create gas vapours that your engine can't use and that will
ultimately escape from your tank.
7. Keep your tank full. Gasoline that sloshes around in the empty space in
your tank tends to vaporize and eventually leaks away.
8. Keep your tires properly inflated. Under-inflated tires waste gas. You
can improve fuel economy by up to three per cent simply by inflating the
tires on your car to the proper pressure. Be sure to check your
Bonus tip: Roadside assistance plans can save you money on costly towing and emergency services. Most plans cover towing, battery boost or flat tire change, but they also limit the number of service calls per year. BMO Bank of Montreal MasterCard enhanced roadside assistance package ($98/year) includes unlimited service calls, up to 250 km towing distance, and free coverage for additional cardholders.