Oil prices strengthened Monday with the main international contract moving above $40 US for the first time since December on predictions that OPEC will set a new floor for oil prices.
Brent oil, the international contract traded in London, was trading just below $40 at mid-morning, while West Texas Intermediate, the main North American contract was up 2.8 per cent at $36.94 US a barrel.
Higher oil prices helped push Toronto stocks higher, with the TSX up 137 points at 13,349.
The TSX has moving higher for more than a week as the energy sector recovers.
Gary Ross, a leading oil price prognosticator at New York-based consultancy PIRA, has told Reuters he believes oil prices will rise to the $50 level by the end of the year.
Ross is among a number of analysts who believe that oil prices bottomed out in January, when they sank below $30 a barrel.
He has hopes for a planned meeting sometime after March 20 between members of the Organization of Petroleum Exporting Countries and Russia.
OPEC could be ready to set a floor
He believes OPEC would like to set a $50 US a barrel floor for oil, as its members are suffering economically from low prices. That could mean some production cutbacks as the year goes on.
"They want $50 oil, this is going to become the new anchor for global oil prices," he said.
"While it may not be an official target price, you'll hear them saying it. They're trying to give the market an anchor."
Though oil has been rising steadily in price for three weeks, there is still a record amount of oil in storage around the world.
That means many analysts are much less optimistic about a continued rise in prices.
However, the Baker Hughes rig count released Friday shows the number of U.S. oil and gas rigs fell by 13 to 489, with more than 700 rigs idled in the past year as prices tanked. The number of Canadian rigs was down 46 to 129, with 171 rigs shut down in the past year.
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