Oil rallies on speculation ahead of meeting between OPEC and other producers

The oil market is rallyingthanks to speculationahead of an important meeting of OPEC members and other outside petroleum producing countries this weekend.

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West Texas Intermediateclosed up more than four per cent on Tuesday, to $42.17US per barrel, on reports Russia and Saudi Arabia have reached a consensus on freezing output.

"And they're saying 'what if this freeze does come into effect?' And that means the price of crude will go up. It's sheer guesswork," said En-Pro International chief petroleum analyst Roger McKnight.

McKnight said if a freeze doesn't happenon Sunday, the price of crude could "drop 10 per cent by the end of next week."

If an agreement is reached this weekend, McKnight saidthe price of oilcould settle at about $45a barrel.

"Alberta, Saskatchewan,B.C., and the east coast are the economic engines of this country," said McKnight.

"So the higher the price of crude goes, the better it is for those areas and the better it is for the consumer because a higher loonie means the imported goods we get from the United States and offshore are less costly."

McKnight projects more positive news for oil production in Canada by late summer.

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