North American oil prices hit their lowest point since March 2009 on Friday morning, with the crude contract for the North American benchmark known as West Texas Intermediate falling to $41.35 US a barrel.

By mid-morning, it had bounced above $42 again, as the U.S. dollar headed lower against other currencies. But WTI ended the day down again from its last close, at $42.14.

The trend is clearly downward, with WTI crude losing value every week since hitting $61.35 US a barrel on June 10.

Citigroup has predicted it will slide further and analysts are saying it could enter the $30 range.

That has not meant a break for Canadian drivers, as gasoline prices have gone up by an average of 15 cents a litre west of Thunder Bay.

Dan McTeague, a senior petroleum analyst at GasBuddy.com, said the low Canadian dollar isn't helping, as oil is priced in U.S. dollars. The Canadian dollar followed oil downwards to 76.389 US cents on Friday.

The biggest impact on gasoline prices comes from lack of refining capacity in Canada. With BP's heavy oil processing refinery in Whiting, Ind., shut down, gasoline is in shorter supply and climbing in price, McTeague said.

BP says it shut down the largest of the three crude distillation units at Whiting Refinery a week ago for unscheduled repair work. The company has not said when it will be back up and running.

One catalyst to oil's fall this week has been the devaluation of the Chinese yuan. The currency held firm against the U.S. dollar overnight, but is down 2.9 per cent this week after the Chinese government allowed it to float.

China hopes devaluing the yuan will boost exports from its economy, which has slowed well below the growth targets set by the government.

Economists with the Australia and New Zealand Banking Group are predicting 6.5 per cent growth this year for China's economy, the world's second largest.

That prospect roiled investors, who saw lower demand from China for all commodities.

But the irony is that demand for oil is clearly up, with both OPEC and the International Energy Agency noting this week that the world is using more oil at the current low prices.

The long-term problem is that supply has increased even faster.

Oil inventories at record highs

A report from the U.S. energy agency released Thursday showed U.S. oil inventories remain at record levels, despite an increase in summer driving by U.S. consumers.

There are fresh concerns about storage of oil, as the U.S. shale industry continues to produce more than can be consumed.

The Baker Hughes rig count, which came out at midday, found there were no new drilling rigs deployed in the U.S. this week. However, there were three more in Canada, at 211 rigs.

WTI oil is on a downward trend that seems disconnected from the global benchmark Brent crude, which has held its price, though OPEC, which provides most of the oil for the international contract, is also producing at a record rate.

Brent crude was at $48.72 US a barrel on Friday, down on the day, but nowhere near its 2009 low.

The shutdown at the Whiting refinery is playing further havoc with the price of Canadian oilsands product, which is at $23.25, a steep discount to WTI. That refinery processes heavy oil such as that created by the oilsands.

"Not only are the consumers being hit pretty hard at the pump, but producers are starting to scratch their heads too because the price of crude they're trying to get out of the ground is getting near the bottom of the barrel financially," said Roger McKnight, chief petroleum analyst at En-Pro International.