Energy sector helps lift Toronto stocks as price of oil heads higher
This is a file image of various stocks.
Ian Bickis, The Canadian Press
Published Tuesday, January 15, 2019 5:29PM EST
TORONTO -- Major North American indices rose Tuesday, propped up by climbing oil prices and positive tech news.
While Britain faces a political crisis after lawmakers rejected Prime Minister Theresa May's Brexit deal by a wide margin Tuesday, the expected move didn't rattle North American investors.
"North American markets seem to be brushing that off," said Craig Jerusalim, portfolio manager at CIBC Asset Management.
The "recurring nightmare that never ends" could, however, still result in higher risks for the market, he said.
"It's just more uncertainty coming from that part of the world."
The S&P/TSX composite index closed up 70.75 points at 15,046.28, helped especially by the energy index which rose 1.88 per cent.
Energy stocks rose as the February crude contract closed up US$1.60 at US$52.11 per barrel.
The energy situation is even more positive for Canada as the differentials between Canadian and international oil prices, which had widened considerably last fall, are now looking much healthier, said Jerusalim.
"More importantly for Canada, WCS, or Western Canadian Select, is back to its five-year average. And that's before you factor in heavy differentials which are now all of a sudden the tightest they've been in a number of years."
The widened differentials prompted Alberta Premier Rachel Notley to make the drastic move towards restricting oil production because the lack of export capacity was pushing down Canadian prices.
Differentials narrowed Tuesday as reports said the U.S. may impose an embargo on Venezuela after the government took direct control of the state oil producer, whose heavy oil production competes with Canada's.
The latest developments play into efforts already underway by Notley, said Jerusalim.
"What she wanted to happen happened in rather fast order. So I think she does deserve some credit for the moves that she made."
In New York, the Dow Jones industrial average ended up 155.75 points at 24,065.59. The S&P 500 index was up 27.69 points at 2,601.30, while the Nasdaq composite was up 117.92 points at 7,023.83.
The Nasdaq was boosted by Netflix Inc., which rose 6.52 per cent after it said it would increase subscription prices in the U.S. market. The company said last November it was raising prices in Canada.
The Canadian dollar averaged 75.38 cents US, up 0.02 of a US cent from Monday.
The February natural gas contract ended down nine cents at US$3.50 per mmBTU. The February gold contract closed down US$2.90 at US$1,288.40 an ounce and the March copper contract was unchanged at US$2.63 a pound.