TORONTO -- Canada's main stock index climbed slightly higher, helped by gains in the energy sector as the price of oil hit its highest level in 11 months.

West Texas Intermediate climbed above US$53 a barrel.

"It's really a remarkable move. WTI bottomed around about $12 in late April of last year," said Giles Marshall, portfolio manager at Fiduciary Trust Canada.

Oil prices have been rallying on hopes for increased demand as COVID-19 vaccines roll out. Saudi Arabia has also said it would cut production by an extra one million barrels per day starting next month.

Tighter supplies have also been reinforced by a fifth straight week of drawdowns in U.S. stockpiles.

The S&P/TSX composite index closed up 51.35 points to 17,985.80.

In New York, the Dow Jones industrial average was up 60.00 points at 31,068.69. The S&P 500 index was up 1.58 points at 3,801.19, while the Nasdaq composite was up 36.00 points at 13,072.43.

The Canadian dollar traded for 78.46 cents US compared with 78.20 cents US on Monday.

Energy was the best-performing sector on the TSX, gaining two per cent with shares of Arc Resources Ltd. up 8.1 per cents while Tourmaline Oil Corp., Whitecap Resources Inc. and Husky Energy Inc. rose between 5.1 and 5.7 per cent.

The February crude oil contract was up 96 cents at US$53.21 per barrel and the February natural gas contract was up 0.6 of a cent at US$2.75 per mmBTU.

The heavyweight financials sector gained 0.5 per cent as bond yields continued to steepen, providing support for insurance companies and banks.

CI Financial Corp. shares increased six per cent after the company announced that its total assets grew 27 per cent last year to a record $231.5 billion.

Marshall said steepening yield curves is an important story that's not getting enough attention.

The Government of Canada 10-year bonds have surged to 0.91 per cent from 0.67 per cent on Dec. 31. The U.S. 10-year Treasury is flirting with 1.2 per cent, a level some said could present a challenge for equities, he said.

"Rising bond yields are going to present a headwinds for equities, in particular growth stocks and for companies related to the housing market," Marshall said in an interview.

Bonds could also be attractive because valuations have crept up, prompting some investors to take a pause as the vaccine rollout is not happening as rapidly as expected.

"Definitely there's not an overwhelming sense of nervousness," he said, adding that people are reviewing their positions after a strong couple of months and last week when the TSX climbed 3.6 per cent to record highs.

"I think really markets are just digesting the very big move last week ... and just grappling with whether the market hasn't become a little over-optimistic about how quickly vaccines are going to be rolled out, they may just be having second thoughts about that."

Materials was up 0.5 per cent despite lower gold prices with shares of Nutrien Ltd. up 5.4 per cent and First Quantum Minerals Ltd. 2.3 per cent higher.

The February gold contract was down US$6.60 at US$1,844.20 an ounce and the March copper contract was up 4.1 cents at nearly US$3.61 a pound.

This report by The Canadian Press was first published Jan. 12, 2021.