Oil prices shot up as high as US$103 a barrel on Thursday as traders were forced to question how bad the situation in Libya would get and whether the instability could spread to other oil-rich nations.
Toronto saw one of Canada's largest overnight increases, jumping 3.7 per cent to an average price of 121.4 cents per litre. This comes after climbing 2 cents per litre earlier in the week.
In Montreal, a litre of gas cost 126.4 cents per litre after a 7 cent jump earlier in the week. Ottawa's price had reached 120.1 cents per litre on Thursday, while London, Ont., reached a similar 121.4 cents per litre.
The website Tomorrow's Gas Price Today predicts another jump on Friday for most Canadian cities.
The spike comes amid fears that civil unrest in Libya will lead to the collapse of that country's gas and oil exports. Libya is responsible for about two per cent of the world's oil production, but some major oil companies have already shut down operations in the region.
The violent upheaval in Libya has already taken 1.2 million barrels of oil off of the global market thanks to closed ports and shuttered energy plants.
That amount represents nearly a full day's work of production; the African country produces 1.6 million barrels in a day. Libya sits on one of the largest proven oil reserves in Africa.
While experts suggest the shortfall could be made up by increased output from other countries, some in the industry say the crisis has created a sense of insecurity that has set off a wave of price speculation.
Crude prices have jumped 20 per cent to two-year highs during the week that an uprising threatened the regime of Moammar Gadhafi and other big oil producers like Iran and Saudi Arabia were forced to wonder if they were next.