Canadian dollar shoots higher on oil rally

The Canadian dollar finished above 77 cents US today on an oil rally that's lasted for the past week and a weaker greenback.

The loonie rose 0.43 of a cent to 77.26 cents US at the close, its strongest showing since mid-August.

Oil continued its climb on confidence that U.S. shale drillers are cutting back on production. A report earlier this week by the U.S. Energy Information Agency forecast lower global oil production and an increase in demand.

Later in the day, the Baker Hughes rig count showed that 14 more U.S. rigs had been pulled out of production this week, for a total of 795 drillers still at work.  It was the sixth consecutive week of declines.

West Texas Intermediate crude, the main North American contract, was up seven cents to $49.50 US a barrel. It moved as high as $50.92 in morning trading.

Oil has been rising since Oct. 2, in part on news of Russian airstrikes in Syria and Iran.

Brent, the main international contract, was at $52.52 and Canadian crude contract Western Canada Select was up five cents at $34.48.

"One development that is significant is what's happening in the Middle East with Russia starting military operations there," said Robert Mark of MacDougall, MacDougall & McTier,

He says the rebound in oil prices at this time of year is a positive as energy prices tend to weaken in autumn. MacDougall, MacDougall & MacTier is predicting oil will settle at or above the $50 market in the next few weeks, but won't hit $70 until the second half of 2016.

"The next big hurdle in terms of analyzing supply and demand is the impact of Iran returning to the market. We're not going to know that until early next year," Mark told CBC News. 

TSX down today, but up on the week

The TSX was down 14 points to 13,964, but is up 630 points since last Friday in its best week of the year.

After being beaten down for six weeks by concern over China's economic slowdown, stocks around the world have rallied this week.

Part of the optimism in oil and stock trading is based on the Federal Reserve minutes released yesterday, which seemed to indicate the U.S. central bank would wait to raise rates until the impact of China's economic slowdown is more fully known.

That helped push down the U.S. dollar, which has become stronger on anticipation that rates would soon rise.

A boost in gold and metals prices helped buoy the market, though financials and energy stocks ended lower.

Today's Canadian jobs report showed unemployment rising to 7.1 per cent as full-time jobs were eliminated in the economy in September.

Further bad news followed in the Bank of Canada's quarterly business survey, which showed a "tepid" outlook with some cautious optimism about the year to come.