The price of oil continued to rise Wednesday due to political uncertainty in the Middle East -- a trend that one economist warned could plunge the global economy back into recession, if prolonged.
In New York, crude began the day at US$95.63 a barrel and rose to $100.01 during afternoon trading.
In Europe overnight Brent crude rose 1.1 per cent to $106.99 on the ICE Futures Europe Exchange. But as trading continued on Wednesday, it was later approaching $112.
BNN's Michael Kane said economists are growing concerned about the negative long-term effects of higher oil prices.
"Morgan Stanley emerging market strategist Jonathan Garner told Bloomberg news today if oil rises above $120 a barrel and stays there, there will be what he called ‘a meaningful shortfall in global growth relative to what the current consensus expects' -- recession," Kane told CTV's Canada AM.
Garner told Bloomberg the energy industry is in for a period of extended uncertainty due to the turmoil in the Mideast, "and that's not good news for the equity risk premium."
Kane cautioned that the crude prices out of New York may not be entirely accurate, because current U.S. crude stockpiles are believed to be "bloated" by almost one million barrels, a factor that could be keeping the crude price down in the U.S.
Libya, Africa's third-largest oil supplier and the scene of a current revolt against Col. Moammar Gadhafi, typically pumps about 1.6 million barrels of oil per day. It isn't clear how much that output has been reduced with the current political unrest that began over a week ago, but one recent report suggested a 6 per cent decrease, Kane said.
Meanwhile, prices at the pump in Canada crept up overnight. On Wednesday morning, Toronto's average price was $1.18 per litre, up almost 2 cents from a day earlier, according to the website tomorrowsgaspricestoday.com.
In Montreal, the average price was $1.20 per litre on Wednesday, also an increase of about 2 per cent. In Vancouver the average price was $1.27 a litre, up a cent and a half from Tuesday.
In Thunder Bay, Winnipeg and Calgary there was no discernable change in price between Tuesday and Wednesday.
One year ago the price per litre in Toronto was $1.01, in Montreal it was $1.10 and in Vancouver it was $1.12.
With files from The Associated Press
