Oil prices shot back up above $55 US a barrel Tuesday as cold weather hit the northeastern United States and U.S. President George W. Bush revealed plans to increase the country's petroleum reserves.
In trading on the New York Mercantile Exchange, the price of light, sweet crude for March delivery finished at $55.04 US, up $2.46 US.
As part of his state of the union address to be delivered Tuesday night, Bush was expected to ask Congress to double the capacity of the strategic petroleum reserve.
The reserve, which is held as a hedge against oil market disruptions, is currently about 727 million barrels, and the U.S. Congress has given consent for it to grow to one billion barrels. Bush is expected to seek its expansion to 1.5 billion barrels, with that capacity filled by 2027.
Relatively warm winter weather in the U.S. and growing oil supplies combined to push the price of oil down to $50 US a barrel last week. However, the return of colder weather over the weekend started putting upward pressure on prices on Monday as heating oil use jumped.
Tuesday's jump in crude prices led to a 2.9 per cent rise in the heavily-weighted TSX energy index. Rising energy stocks were a main reason behind the 205-point surge in the benchmark index of the TSX.
Petro-Canada shares gained $1.86 to $45.21; Nexen soared $2.94 to $72.28; and Suncor Energy advanced $2.83 to $89.40.
The S&P/TSX composite index climbed 205.10 points to close at 12,910.87. Surging gold prices also contributed to the big gain, as bullion futures rose almost $12 US an ounce to $646.60 US.
Source:http://www.cbc.ca/money/story/2007/01/23/oilprice.html
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