Oil Hits C note; not expected to have immediate impact on prices
TORONTO -- Spurred on by global tension and rising demand, oil prices hit $100 US a barrel for the first time ever yesterday. On the New York Mercantile Exchange, oil shot up $4.02 a barrel to touch $100, before closing at a record of $99.62. While the century mark has drivers and truckers worried about what they'll soon be paying at the pumps, experts suggest the number is more of a milestone -- at least in the short term -- than an actual indicator that fuel prices are about to take off. The cost of a barrel of oil is nearly 40 percent higher than at this time last year, when the price was about $65 a barrel. Fuel prices marginally rose in some regions across North America yesterday and today, but for the most part, they have remained close to where they opened at the start of the week. "I don't expect much of an immediate impact," Michael Ervin, president of Calgary energy consultancy MJ Ervin & Associates, told Canadian Press. In Canada, the national average for diesel fuel on Monday was $1.14 a liter. It was as high as $1.24 in some Quebec cities and as low as $1.04 in some Southern Ontario districts. In the U.S., on-highway diesel increased 3.7 cents from the week before to reach $3.34 per gallon. A combination of factors has driven up the price of oil. A colder than expected winter in North America and parts of Europe has spurred demand, as have emerging countries like China and India. The depressed American dollar also contributed. However, recent global tensions -- namely in Pakistan, Iran and escalating violence in Kenya and Nigeria -- are being blamed for this week's sharp increase as nervous speculators continue to drive up futures. Experts suggest that nearly a 25 percent premium on the total price of oil is linked to futures trading.