Rising oil prices are expected to weigh on North American stock markets at Friday’s open, despite some good news about Canadian inflation.

Crude oil futures look likely to repeat their rise toward US$60 a barrel in today’s trading.

In other economic news, Statistics Canada said today the 12-month Consumer Price Index dropped from 2.4% in April to 1.6% in May 2005.

However, the 12-month change excluding energy prices remained stable, rising 1.6%.

South of the border demand for U.S. durable goods posted the biggest increase in more than a year during May as civilian aircraft orders made an enormous surge.

Orders increased a seasonally adjusted 5.5% to US$210.69 billion last month after rising 1.4% in April, the U.>S. Commerce Department said today.

Non-defense aircraft climbed 164.8% last month after advancing 23.6% in April. Excluding the transportation sector, however, demand for all other durables slid 0.2% in May. Ex-transportation orders fell 0.7% in April.

A key barometer of business spending — orders for non-defense capital goods excluding aircraft — fell 2.3% last month, the largest decrease since a 4.0% fall in October 2004. Orders rose 1.7% in April.

The 5.5% increase in overall durables was the largest since orders rose 5.9% in March 2004 and it surprised Wall Street. Economists had called for orders to climb 1.4%.

Later today, Commerce will release the new home sales report for May. Economists call for a 0.3% increase to an annual rate of 1,320,000 single-family homes compared with a level of 1,316,000 in April.

In this morning’s financial news, U.S. financial giant Citigroup Inc. and Legg Mason Inc. announced an asset-swap deal valued at about US$3.7 billion under which Citigroup will give up nearly all of its asset-management business in exchange for Legg’s brokerage network.

Separately, Legg Mason will acquire funds-of-hedge-funds manager Permal.

On Thrusday, Toronto stocks closed lower and New York markets plummeted after rising oil prices had Wall Street investors feeling singularly bearish.

The S&P/TSX composite index finished down 53.11 points, or 0.53%, to close 9,998.38.

A barrel of light crude settled at US$59.42, up $1.33, on the New York Mercantile Exchange.

The junior S&P/TSX Venture composite index finished up 4.35, or 0.25%, to finish 1,715.71.

In New York, markets were shaken by the spiking price of oil and its negative effect on industrials.

The blue chip Dow Jones industrial average nose-dived 166.49 points, or 1.57%, to close at 10,421.44, the tech-heavy Nasdaq composite index fell 21.37, or 1.02%, to 2,070.66, and the broad based S&P 500 index shed 13.15, or 1.08%, to close 1,200.73.