Canada’s consumer prices jumped by 2.4 percent year on year in January, exceeding analyst expectations, on the back of an 11-percent surge in gasoline prices tracking higher oil prices in the first weeks of last month, Statistics Canada said on Wednesday.

Canada’s consumer price index (CPI) increased by 2.4 percent annually in January, up from a 2.2-percent rise in December, the statistics office said, noting that energy and gasoline prices rose faster in January 2020 than in the same month of 2019.

A Reuters poll of analysts had expected Canada’s January 2020 inflation at 2.3 percent.

Excluding gasoline, Canada’s inflation was 2.0 percent last month.

Consumers in Alberta paid 6.6 percent more for gasoline in January 2020 compared to January 2019, following a 0.9-percent annual increase in gasoline prices in December. Carbon pricing was reintroduced in Alberta on January 1, 2020, Statistics Canada said.

In Canada, gasoline prices jumped by 11.2 percent in January 2020, compared with January 2019, when international oil prices were low as a result of a global supply glut, the Canadian statistics office said.

“Gasoline prices rose with oil prices at the beginning of January 2020, due to concerns over global oil supplies in response to international political events,” Statistics Canada said.

At the beginning of January 2020, oil prices jumped on the U.S. killing of Iran’s powerful military leader Qassem Soleimani, and then again on the Iranian retaliation several days later, when Tehran fired missiles at bases in Iraq that host U.S. troops.

Later in January, the U.S. and Iran seemed to have backed from the brink of war and the market’s attention returned to how global economic growth and global oil demand growth would fare this year.

The oil market didn’t have to wait too long for a ‘black swan’ event with the coronavirus outbreak in China, which crushed oil demand and made all analysts slash oil demand growth forecasts for this year.

By Tsvetana Paraskova for Oilprice.com

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