The price of crude oil moved past the US$50 level on Thursday morning trading, a value which hasn’t been seen since late last year.
Prices did recede as morning trading progressed and the cost slipped back below that mark, sitting at about US$49.56.
The loonie also enjoyed a bit of a ride on the markets as a result, coming up 0.22 of a cent from the close on Wednesday.
The Toronto Stock Exchange's S&P/TSX composite index was at 14,078.82, up 25.08 points on Thursday.
The gains are attributed to the production outages because of the Fort McMurray wildfires and unrest overseas, but producers say that situation could change at any moment.
Al Monaco, Enbridge’s president and CEO, calls the increased value of oil a ‘positive’ sign.
“I think the reality is, to continue to develop upstream, we’re certainly going to need higher prices longer term. But in the immediate short term here I think it has been very positive.”
Monaco says the oil and gas industry has done a very good job in bringing down the cost structure. “It’s not fun at $50, but it’s certainly heading in the right direction.”
Analysts also agree that this marks the beginning of higher oil prices for the remainder of the year.
“The story, in my view, that is unfolding couldn’t be simpler: supply is falling, demand is rising and presto, the oversupply will flip into a supply deficit,” Jan Stuart, a global energy economist with Credit Suisse, told Business News Network Thursday.
“And then all of the second half of the year we should see big inventory draws.”
Stuart says that full oil production in Canada may not resume until July 1.
No one will be able to tell if the higher prices can be sustained, but the speed of the recovery is surprising some analysts.
Now, investors will be closely watching next month’s OPEC meeting to see if the higher prices will affect global production.
(With files from The Canadian Press)
