Higher oil prices spurred by an attack on Saudi Arabian oil facilities boosted the Canadian energy sector on Monday but are expected to result in higher fuel prices for consumers.
The attack halted production of 5.7 million barrels of crude a day, more than half of Saudi Arabia’s global daily exports and more than 5 per cent of the world’s daily crude oil production. Most of that output goes to Asia.
It remained unknown on Monday how long it will take Saudi Arabia to bring production back.
Long-suffering Canadian oil and gas stocks posted their best day in nearly three years on the Toronto Stock Exchange.
The index that tracks leading energy company share prices on the TSX closed up 9.25 per cent and double-digit increases were posted by energy firms including Baytex Energy Corp. (up 16.5 per cent), Encana Corp. (up 16.3 per cent), MEG Energy Corp. (up 13.8 per cent), Canadian Natural Resources Ltd. (up 12.8 per cent) and Cenovus Energy Inc. (12.0 per cent).
Benchmark U.S. crude oil soared $8.05 to settle at $62.90 a barrel. Brent crude oil, the international standard, jumped $8.80 to close at $69.02 a barrel.
Higher oil prices could raise average gasoline prices in Canada by between five and 12 cents per litre over the next two weeks, depending on how long Saudi Arabia production is affected, said Patrick DeHaan, head of petroleum analysis for GasBuddy.
Roger McKnight with EnPro says he expects the price at the pump to increase by as much as eight cents in the GTA on Wednesday.
However, the increase may not be as much for some as Canadian retailers just switched to the winter blend of gasoline, which is cheaper to produce.