Oil prices soared Friday, and Canadian consumers can expect to see a bump in retail gasoline prices as a result.
The price of a barrel of oil surged almost $11 Friday, hitting a new record high of US$139.12 before settling at US$138.47.
Cathy Hay, a senior associate with Calgary-based consulting firm MJ Ervin, told The Canadian Press that gas prices would "without a doubt'' be pulled up by the spike.
Her company's latest weekly survey sees Canadian gas prices on average at $1.31 per litre. But that should rise significantly over the next few days, she said.
"I think $1.40 is probably quite realistic and possibly as much as five cents a litre higher than that,'' Hay said.
In an interview with CTV.ca in late May, she said that seasonal demand usually bumps up gas prices over the course of the summer even if crude oil prices are stable.
The oil surge was attributed to a Morgan Stanley report that predicted oil prices to reach $150 a barrel by early July. The falling U.S. dollar and tensions in the Middle East continue to be factors in oil's skyrocketing price.
A barrel of oil cost only about $50 dollars in January 2007.
John Stephenson, an oil industry analyst, said that there are a number of factors pushing oil prices up, but it continues to mostly be about supply and demand.
"The basic story is that we are still struggling as a world to have enough supply and demand keeps charging ahead," he told 麻豆影视net.
He said it is difficult to predict how high oil will go as demand continues to increase in Asia, where fuel prices are much lower than those in North America or Europe.
Short term spike?
Ole Slorer of Morgan Stanley released a report predicting a "short-term spike in oil prices" -- saying that prices at $150 a barrel could be a possibility for the July 4 weekend - sending traders into a frenzy.
Oil surged on Thursday, gaining $5.49 a barrel and continued to rise on Friday.
Oil had declined from its previous high of US$135.09 on May 22 because of concerns about slackening demand, particularly in the United States.
Recent data has shown Americans are cutting their fuel use because of high prices at the pump.
The U.S. consumes nearly a quarter of the world's oil and gasoline demand was down 1.4 per cent in April compared to the previous year.
Automakers are already seeing a change in the market as Americans are shifting towards more fuel-efficient vehicles.
This week, GM cut its production of gas-guzzling SUVs and trucks, including an entire plant in Oshawa, Ont.
The markets
The S&P/TSX index jumped 171.86 points to 15,154.77 in early trading in Toronto Friday.
However, the U.S. market slipped on Friday, on the news of weak employment numbers and the rising cost of fuel.
The Dow Jones Industrial Average dropped 394.64 points Friday, closing at 12209.81. It was the Dow's worst day of the year.
The TSX lost all of Friday morning's gains, closing at 14,969.55, down 13.36 points.
The Canadian dollar fell to 98.11 cents US after Statistics Canada reported the national unemployment rate to be holding steady at 6.1 per cent in May. However, 32,200 full-time jobs were lost in May, which were off-set by more part-time employment.
With files from The Canadian Press and the Associated Press
