Motorists feeling the pinch after oil prices surge
Last Updated: Saturday, June 7, 2008 | 11:18 AM ET
CBC News
Canadian gas prices rose Saturday morning after oil finished the week at a record high, closing at $138.54 US a barrel.
Crude oil futures soared $10.75 US a barrel on the New York Mercantile Exchange, an increase of 12 per cent in just two days, leading to higher prices at the pumps.
In some Canadian cities, gasoline prices rose four to 10 cents a litre overnight.
Many traders predict that oil will hit $150 US a barrel in the next month.
Matt Simmons, chairman of an energy financing company in Houston, believes oil prices are still too low. He told CBC News there are "very strong signs" that the global supply of crude oil has levelled out and is probably now in a gentle decline.
"We know categorically that $130-$140 oil has not stopped demand. It's still growing," he said. "And our stocks are very skinny. Our usable inventories of diesel and gasoline are razor-thin.
"So I think we need to bold ourselves and be prepared for a continual steady rise. If we ever have shortages, it's going to be a sharp rise," he said.
Simmons said he finds it interesting that so many people blame speculators and a weak U.S. dollar for rising prices.
"These same lame excuses have been going on for the last nine years, since [the price of oil] has gone up 13-fold," he said.
Corrections and Clarifications
- The price of gasoline in Halifax on June 7 was $1.356, not $1.44 as was originally reported. June 6 2008 | 6:35 p.m. ET
