CALGARY - Crude oil prices have reached two-year highs, marking confidence in a rebounding North American economy while raising concerns about labour shortages in Alberta's oilpatch.

Oil futures hit $90.80 US per barrel Wednesday before settling at $90.55 US, the highest close since October 2008, increasing on a sharp drop in U.S. inventories and cold weather drawing up demand for heating fuel.

Relatively stable oil prices during 2010 averaging just under $80 all year, have boosted activity in Western Canada after a drought of drilling across the prairies, so industry certainly isn't complaining - yet.

Some companies already are having to rotate crews between jobs because they can't staff all the rigs at the same time, said Mark Salkeld, president of the Petroleum Services Association of Canada.

"One part of it is good, but we really don't want prices to get too much higher," Salkeld said. "That starts to cause grief."

The emerging labour picture is dramatically different than the past 18 months when drilling activity hit decades' low rates on plummeting natural gas prices and the dampening effect on oil demand of a recession. Companies now are trying to re-recruit experienced workers who found other employment when rig counts hit 20-year lows.

"What's happened now is we've diverted a lot of the exploration and development dollars into more oil development, not just conventional light oil but into deeper and oilsands basins," said Kevin Lo, with FirstEnergy Capital Corp. "It's not so much that prices have gone up, but they've reached a level where it's actually economical to develop those resources."

Stable oil prices also bode well for consumers at the pump, said analyst Michael Ervin.

"Without an underlying crude price increase of any significant nature, and with stability in the supply and demand balance for gasoline, the impetus for high gasoline prices just isn't there," said Ervin, of M. J. Ervin and Associates.

The outlook still depends on the global economy revving up and demand jumping, leaving most analysts to predict continued stability in the short term, he said.

Members of the Organization of Petroleum Exporting Countries met earlier this month and agreed to hold oil output at current levels, even as prices move to the top of the preferred range flagged by many members.

While kingpin Saudi Arabia said it favoured a $70-80 US a barrel range, other members such as Kuwait pegged $90 US as a preferred top.

The loonie also crept closer to the greenback after four straight days of losses, closing at 98.60 cents US, up from 98.28 cents, on data the U.S. economy was warming up.

On Wednesday the Energy Department reported a 5.33 million withdrawal from crude inventories. Analysts had forecast a 3.4 million-barrel decline, and noted companies have drawn down stocks for year-end accounting purposes.

At the same time, U.S. data showed the economy picked up in the third quarter, signalling a more solid pace of recovery and improving oil demand prospects.

"If you look at the global macro environment, it's generally better sentiment," said Sacha Tihyani, currency strategist at Scotia Capital.

"It's a bit of a reversal of underperformance over the past couple days, more support of equity prices, surer support of oil, and the fact that the U.S. numbers didn't disappoint."

domeara@calgaryherald.com

With files from Reuters