Toronto stock index down on tumbling oil prices, as the loonie remains unchanged
Share via Email
TORONTO — Tumbling oil prices saw the commodity-heavy Toronto stock index give up some of the week's gains on Friday ahead of the holiday weekend.
The S&P/TSX composite index dropped 47.98 points to 15,728.32, as the November crude contract fell $1.50 to US$49.29 per barrel.
It was a wobbly week of fluctuating optimism and pessimism about OPEC oversupply fears.
Panic resurfaced on Monday following a report from oilfield services company Baker Hughes that more oil drilling rigs went into operation last week after two weeks of declines, and Reuters reported that output of OPEC nations grew in September.
Then earlier on Wednesday, data from the U.S. Energy Information Administration temporarily swayed concerns when it reported that U.S. commercial crude oil inventories decreased by 6.0 million barrels for the week ending Sept. 29. But then later that same day the EIA reported that U.S. crude exports jumped to 1.98 million barrels per day, marking the fourth weekly increase.
"People have started to have some second thoughts or doubts about the ability of OPEC to effectively curtail production enough to push crude higher," said Andrew Pyle, a senior wealth adviser at Scotia Wealth Management. "That will weigh on the markets."
It was last November that OPEC and 10 other oil-producing countries, including Russia, agreed to cut their production until March 2018 in a bid to combat a supply glut and shore up crude prices.
Still, Pyle added, "I don't think the story has really changed for crude oil going into the fourth quarter. We've been hovering around the US$50 mark, global growth remains strong.
"Yeah, we are seeing U.S. production come back — that's eating through the export numbers — but the demand side of it really hasn't changed at all."
Slumping energy stocks also took a toll on U.S. stocks' record high week on Friday, as Wall Street's S&P 500 index gave back 2.74 points to 2,545.49 and the Dow Jones industrial average nudged down 1.72 points to 22,773.67.
Only the Nasdaq composite index was able to squeak out its sixth consecutive record high, as it added 4.82 points to 6,590.18.
In economic news, it was a washout for U.S. jobs growth as employers cut more jobs last month than they added, the first time that's happened in seven years. Economists, who had been warning of a particularly weak figure in the wake of hurricanes Harvey and Irma, downplayed the report.
In Canada, jobs data was far rosier. Statistics Canada said Friday that the labour market posted a 10th-straight month of net job gains in September to match the economy's longest monthly streak since the financial crisis almost a decade ago. The national unemployment rate stayed at a nine-year low of 6.2 per cent.
Experts underlined a lot of positives in the jobs report that arrived amid recent signs suggesting the economy is already starting to cool down, as widely expected, following red-hot start to the year.
In currency markets, the Canadian dollar was unchanged, trading at an average price of 79.69 US.
Elsewhere in commodities, the November natural gas contract was down six cents at US$2.86 per mmBTU, the December gold contract was up $1.70 to US$1,274.90 an ounce, and the December copper contract dropped two cents to US$3.03 a pound.
The TSX will be closed Mon., Oct. 9 for the Thanksgiving holiday. U.S. markets will remain open.
Follow @DaveHTO on Twitter