North American markets are set to climb at the open today as oil prices pull back from record highs.

Oil prices steadied Thursday in London, after hitting a 21-year high in U.S. trading a day earlier in response to a dispute between Moscow and OAO Yukos that could disrupt crude production from Russia. Crude prices retreated early in the U.S., falling US44¢ to US$42.46 a barrel.

In this morning’s economic news, Statistics Canada said the Canadian economy expanded 0.3% in May, following a slight advance of 0.1% in April. That, however, was less than the consensus forecast of 0.4% and well below some estimates of 0.6% for the month.

StatsCan said the expansion of Canada’s gross domestic product was led by the oil and gas sector in May as high global crude oil prices helped set the stage for more production and exploration.

In its Gross Domestic Product by Industry report for May, StasCan said industrial production advanced 0.6% as all of the major components registered gains. Industrial production has gained 3.6% over the latest 12-month period.

By way of comparison, StasCan noted the U.S. Index of Industrial Production jumped 0.9% in May, with all major components registering gains. The U.S. index has increased 5.9% over the last 12-month period.

In a separate release, StatsCan said manufacturers’ prices fell 0.5% in June following an increase of 1.6% in May. On a 12-month basis, prices rose 6.4%, up from the 5.8% registered in May.

It added that prices of raw materials decreased 1.7% from May and were 13.8% higher than June 2003.

On Wednesday, U.S. markets rebounded late in the session, while Canadian markets maintained early momentum from a sharp jump in oil prices.

At the close, Toronto’s S&P/TSX composite index was up 59.67 points or 0.72% at 8,354.04 on volume of 189 million shares. The TSX Venture composite index gained 8.71 points or 0.59% at 1,476.3.

In New York, a late-day surge pushed the Dow Jones industrial average into positive territory after being down as much as 90 points. The blue-chip index finished the day up 31.93 points or 0.32% at 10,117.07. The broader S&P 500 was mostly unchanged, gaining 0.59 of a point at 1,095.42. The technology-laced Nasdaq Composite Index fell 10.84 points or 0.58% at 1.858.26.