TSX surges after oil gains 19% in 4 days to above $52
WTI oil contract trading for $52 US, Canadian dollar punches through 80 cents
The Toronto stock market shot up 162 points on Tuesday after oil continued the climb that has seen it gain 19 per cent in the last four sessions.
The TSX energy sector was ahead four per cent after a 4.5 per cent gain on Monday. Toronto stocks are now ahead 2.9 per cent on the year.
The Canadian dollar was trading above 80 cents at 80.67 US, continuing its upward momentum from Monday. It gained more than one cent during the day.
News of a drop in the number of U.S. oil drilling rigs has spurred hope that the glut of oil might ease in the near future.
Oil above $52 US
West Texas Intermediate, the main North American oil contract traded in New York, moved above $51 for the first time since the beginning of January. It rose $2.89 to $52.45 US a barrel, bringing it to just $1 under its price at the end of 2014. Brent, the most common international oil contract, rose $2.84 to $57.59.
Western Canada Select, the blend of oil coming out of Canadian oilsands producers, was up $2.78 cents at $40.35 US a barrel.
Oil companies are delivering earnings reports this week, and many have cut their capital spending for 2015.
On Tuesday, British Petroleum reported a loss of $4.4 billion for the fourth quarter of 2014. BP also said it would pull back on investment, reducing capital spending to $20 billion worldwide, down from its previous guidance of $24-26 billion.
The U.S. dollar, which has made its goods more expensive in the rest of the world, slipped 0.5 per cent against a basket of currencies.
U.S. stocks rose broadly on higher oil prices and signs that the new Greek government won't press for a write-off of its bailout loans.
The Dow Jones industrial average closed up 305 points to 17,666.40, the S&P 500 index climbed 29 points to 2,050.03 and the Nasdaq was up 51 points to 4,727.74.
Ian Nakamoto, director of research at MacDougall, MacDougall, MacTier, expects the upturn in oil prices to continue, saying it's strong enough to have an impact.
That could boost confidence among traders.
"I think it’s more psychological than anything. People have equated low commodity prices with low economic activity and now there’s been a revival to oil prices at a level people are more comfortable with, the global economy will continue to move up," he told CBC News.