Gasoline prices across Canada have surged to a near three-year high, according to the latest pump price survey by Calgary-based MJ Ervin & Associates.
The survey released Tuesday found a national average pump price of $1.185 a litre for regular gas, a rise of 2.3 cents from last week's survey.
That's the highest average pump price in the survey since Sept 6, 2005, when gas soared to an average of $1.26 a litre in the aftermath of Hurricane Katrina.
Analysts say they wouldn't be surprised to see gas prices hit $1.30 to $1.40 a litre as the summer driving season boosts demand.
In the U.S., gasoline prices hit a record high of $3.39 US a gallon on Tuesday, according to the American Automobile Association.
But that's still a bargain compared to Canadian prices. After converting to Canadian currency and accounting for the different-sized gallons, the U.S. average price works out to the equivalent of 91 Canadian cents a litre.
Oil prices hit record
Record gasoline prices came as crude oil futures traded close to $114 US a barrel Tuesday, with a weak U.S. dollar and supply disruptions combining to push prices further into record territory.
The crude oil contract for May delivery soared as high as $113.99 on the New York Mercantile Exchange. That tops the previous intraday high of $112.21 US set last week. The price for oil settled Tuesday at $113.79, up $2.03 from Monday's close.
Traders shifted money into oil as a hedge against a weak U.S. currency, betting that commodities would be a safer haven. Natural gas futures rose 16 cents to $10.21 US per million BTUs. Gold futures also gained — up $3.30 to $928.70 US an ounce.
"We've seen another swing down in the U.S. dollar, so I think we saw short-term traders go back into oil as a hedge against the falling dollar," Mark Pervan, senior commodity strategist at the ANZ Bank in Melbourne, Australia, told the Associated Press.
Disruptions in crude supplies also put pressure on prices. An oil pipeline that runs from the U.S. Gulf coast to the American Midwest was operating at reduced capacity following a weekend shutdown. A facility in Nigeria also reported lower production.
The TSX energy sub-index rose 1.75 per cent, adding to a 2.6 per cent gain on Monday.
Shares of EnCana, Canadian Natural Resources and Suncor Energy all hit all-time highs on the TSX.
Some economists see no quick end to the oil boom, saying that continuing demand from emerging economies will offset any slowdown in the U.S.
"Natural gas and oil prices are going higher, not lower, over the next 12 months," CIBC World Markets chief economist Jeff Rubin told CBC News.
With files from the Associated Press
