Economy & Markets

Oil hits highest level since mid-2015

By David Hodges |
Source: The Canadian Press

Energy and mining stocks propelled Canada's main stock index to a record high Monday on the strength of spiking commodity prices.

The S&P/TSX composite index was up 72.04 points to 16,092.20 in a broad-based advance across several major sectors including base metals, gold and materials.

Leading the way were shares of oil and gas companies, which surged more than 2.5%, as the December crude contract soared US$1.71 to US$57.35 per barrel.

It's the first time since June 30, 2015 that the price of oil has cracked the US$57 mark when it closed at US$59.47.

The sharp rise comes amid upheaval in oil-rich Saudi Arabia where turmoil has investors wondering if oil supplies will be constricted, which would drive crude prices higher. Over the weekend 11 princes and 38 senior officials and businessmen were arrested as part of a purported anti-corruption probe led by Crown Prince Mohammed bin Salman.

"We're going on more than two years since we've seen this level of oil prices," said Craig Fehr, a Canadian markets strategist at Edward Jones in St. Louis.

"Obviously it's one of the key contributors to move higher in the TSX today but we're also seeing global stock markets move higher today and it's this rally that keeps getting extended for all the right reasons in my opinion. And those reasons are we continue to get economic data that's positive."

Last Friday's positive jobs reports in Canada and the U.S. continue to "confirm that economic growth looks pretty solid," Fehr said. "And the earnings data we've been getting for the past several weeks continues to point to strength for stocks as well."

In New York, it was another quiet but positive trading day as stock indices closed at all-time highs on Wall Street.

The Dow Jones industrial average was up 9.23 points to 23,548.42, the S&P 500 index eked out 3.29 points to 2,591.13 and the Nasdaq composite index advanced 22.00 points to 6,786.44.

The Canadian dollar was trading at an average price of US78.46¢, up 0.11 of a U.S. cent.

Elsewhere in commodities, the December gold contract gained US$12.40 to US$1,281.60 an ounce, the December natural gas contract climbed US15¢ to US$3.13 per mmBTU and the December copper contract added US4¢ at US$3.16 a pound.