http://canadianpress.google.com/article/ALeqM5jaHZm_hy5H473JftYcuGif6jA35ATORONTO — National average gasoline prices will top $1.40 a litre this summer and $2.25 by 2012, according to a forecast from CIBC World Markets which says tightening supplies will drive crude oil over US$150 a barrel by 2010 and to US$225 a barrel in four years.
Thursday's report from economists at the investment banking division of Canadian Imperial Bank of Commerce coincided with news that Bank of Nova Scotia's commodity price index jumped by five per cent during March to its third record high in as many months.
"The oil and gas index soared by 11.8 per cent in March, climbing above its previous peak in October 2005, and will rise further in April," said Scotiabank economist Patricia Mohr.
At CIBC World Markets, chief economist Jeff Rubin - one of the first to predict $100-a-barrel oil, which he did three years ago - updated a forecast he issued in January saying oil would hit US$150 a barrel within four years, raising that projected price by $75.
Rubin said his group has "re-examined our projected supply increases" to discount expected rises in production of natural gas liquids, which he said account for virtually all the growth in global petroleum liquids production since 2005.
Gas liquids, "while valuable hydrocarbons, are not a viable substitute for oil and cannot be economically used as a feedstock for gasoline, diesel or jet fuel," the new report says.
"Stripping out natural gas liquids, oil production has not grown for over two years, which certainly goes a long way to explaining why oil prices have doubled over that period," Rubin said.
"Whether we have already seen the peak in world oil production remains to be seen, but it is increasingly clear that the outlook for oil supply signals a period of unprecedented scarcity."
At Scotiabank, the overall commodity index has climbed 181.2 per cent from its cyclical low in October 2001 - a stronger advance than the surge between 1972 and mid-1978.
Oil and mineral prices posted new highs in March, and crude oil has continued booming to a record of US$119.90 per barrel Tuesday on the New York Mercantile Exchange.
"Recent news that Russian oil production dropped by 0.9 per cent in the first quarter of 2008, the first year-over-year decline in a decade, set off another wave of concern over supplies to meet growing emerging-market demand," Mohr said.
She added that after a deep plunge in natural gas drilling activity in Western Canada since the autumn of 2006, activity "appears to be steadying, and we expect a big improvement in 2009 and 2010."
Scotiabank's metal and mineral index rose 8.3 per cent in March, surpassing its previous peak in May 2007, on "widespread gains in base and precious metals and huge jumps in fertilizer-related mineral prices."
The forest products index edged higher as rising newsprint and paper prices offset ongoing weakness in lumber. And while the agricultural index lost ground in March as wheat prices eased from record highs, it remains 57.8 per cent above a year earlier.
iPhone finally announced by Rogers that it will be coming later on in the year 2008. However, no further information on exact date and price of the handset. Hopefully it will be a 3G type of iPhone.
