TORONTO -- Oil prices dropped below US$50 a barrel for the first time in more than three weeks, while North American stock indexes dipped slightly ahead of the first round of the French presidential election.
The June crude oil contract shed $1.09 to US$49.62 per barrel after reaching a low of US$49.20 earlier in the day. The last time the commodity dipped below the US$50 mark was March 29 when it fell to US$49.51.
However, the day's fall in price didn't drag down the Toronto Stock Exchange's S&P/TSX composite index much -- it fell 11.08 points to 15,614.48, with the energy sector leading advancers as oil and gas stocks gained an average of 0.73 per cent.
Part of the energy sector's performance can be attributed to a depreciating Canadian dollar, which slipped 0.18 of a U.S. cent to 74.05 cents US.
Patrick Blais, a senior portfolio manager at Manulife Asset Management, said a low loonie acts as "sort of a natural hedge," meaning companies are getting more Canadian dollars per barrel, which are priced in U.S. dollars.
"That said, if the oil price persists below 50, we'll probably see Canadian oil stocks pull back," he said.
In New York, the Dow Jones industrial average lost 30.95 points to 20,547.76, the S&P 500 index declined 7.15 points to 2,348.69, and the Nasdaq composite index dropped 6.26 points to 5,910.52.
While there's not much movement in the markets, there's a lot of fretting over geopolitics, said Blais.
He pointed to France where citizens head to the polls Sunday for the first round in the country's presidential elections as an example. One of the top two candidates, National Front representative Marine Le Pen, is calling for France to leave the European Union and the Euro currency behind should she win.
"You could very well get a fairly strong relief rally on Monday depending on the outcome as well as depending on how the market assesses the outcome," said Blais.
Elsewhere in commodities, the June gold contract rose $5.30 cents to US$1,289.10 an ounce, the May natural gas contract fell 5.8 cents to US$3.10 per mmBTU, and the May copper contract gave up about half a cent to roughly US$2.54 a pound.