Gas Prices to Rise Again in 2009

"I think gas prices will reach $1.20 around summer -maybe even by Victoria Day long weekend -as demand ramps up and crude oil costs potentially increase," said Jason Toews, co-founder of ontariogasprices.com.

The biggest factor in determining pump prices is the cost of crude oil - the main ingredient in gasoline, said Toews.

A barrel of crude oil was around $40 Friday, down considerably from last year when it was $97 before spiking at about $145 in mid-July -which saw prices at Canadian gas stations leap to well above $1 per litre.

Crude oil hit as low as $32 per barrel on Dec. 23, which kindly worked its way into the pump price, said Toews. But the Organization of the Petroleum Exporting Countries is hoping to see per barrel prices between $75 and $80 in the near future, Toews added.

"A lot of oil fields are out of production right now, but the oil companies are looking ahead, they're already planning for the spring and summer months."

The average price had risen 1.8 cents from Friday to Saturday and 1.5 cents from Saturday to Sunday, part of a streak of 13 increases in the past 14 days.

The average price is 11.8 cents more last week and 26.8 cents more than a month ago, but $1.329 less than at this time last year and $2.635 less than the record high of $4.63 set on June 19, according to figures from the AAA and the Oil Price Information Service.

The smaller increase comes amid falling prices for crude oil.

The price of a barrel of light sweet crude fell $2.25 to $38.58 in electronic overnight trading today on the New York Mercantile Exchange. The price fell 17 percent last week because of fears that rising U.S. unemployment would reduce demand, but remains 14 percent higher than the low of $33.87 hit Dec. 19.

Crude oil costs account for half to three-quarters of the price of a gallon of gasoline, said Tupper Hull, director of strategic communications of the Western States Petroleum Association, a trade association representing major oil companies in six Western states.

Analysts have attributed the nearly monthlong series of increases in the gasoline price to the higher cost of crude oil and a lower supply of gasoline.