Source: The Canadian Press

The Toronto stock market looked set to advance at the open Friday with the resource heavy TSX getting support from higher oil prices as worries about Europe’s government debt crisis continued to ease.

The Canadian dollar advanced 0.48 of a cent to 95.72 cents US.

New York futures also indicated a higher open as the Dow Jones industrial futures gained 33 points to 10,268, the Nasdaq futures rose 8.5 points to 1,872.25 while the S&P 500 futures were 4.4 points higher to 1,105.5.

The June crude contract on the New York Mercantile Exchange gained 82 cents to US$75.37 barrel.

The TSX energy sector could also find lift after two Western Canadian provincial governments announced new incentives.

The Alberta government announced a new royalty incentive program Thursday aimed at encouraging energy companies to drill technically challenging wells in the province. Under the new rules, shale gas, coalbed methane and horizontal oil and gas wells drilled as of May 1 will pay a maximum 5% royalty rate.

And in Saskatchewan, the government has announced a royalty break that it hopes will stimulate production from a particular type of natural gas well. For the next three years, the province will not charge any royalties on the first 25 million cubic metres of gas produced from horizontally drilled wells.

Bullion was slightly higher with the June contract on the Nymex ahead 90 centsd to US$1,212.80 an ounce.

North American markets are poised to end the week higher following a volatile string of sessions. But indexes are down sharply from the beginning of the month, when they were at their 2010 highs. The main reason for the decline has been worry about the global economic impact from Europe’s debt crisis.

What started as concern over whether Greece could control its unsustainably high deficit has grown to worry about whether tough spending cuts by cash strapped governments could seriously eat into European economic growth and stall a global economic rebound.

Nerves were put on edge earlier this week on a report that China was reviewing its eurozone bond holdings. China strongly denied that report, which sent stock markets up sharply on Thursday, with the TSX up about 200 points and the Dow rising about 300 points.

But as May draws to a close, the Toronto market’s main index is down 531 points or 4.3% from their 2010 highs on from April 26, while the Dow has fallen 946 points or 8.4%.

The TSX was held back Thursday by earnings reports from Royal Bank (TSX:RY), CIBC (TSX:CM) and TD Bank (TSX:TD) which missed analyst expectations, even as the trio reported sharply higher profits from a year ago.

After the market close, National Bank (TSX:NA) said it earned $261 million, up $20 million from a year ago. The bank’s profit amounted to $1.50 per diluted share. The average analyst estimate had been for earnings of $1.46 per diluted share, according to Thomson Reuters.

But return on equity was 18%, down from 18.5% a year ago.

Overseas, Japan’s government said Friday that unemployment rose for the third straight month in April, prices kept sliding and household spending fell. Despite the triple dose of sobering economic news, Japan’s Nikkei 225 stock average jumped 1.3%.

Hong Kong’s Hang Seng, meanwhile, advanced 1.7% and Australia’s S&P/ASX 200 rose 1.8%. Only China bucked the trend with the main Shanghai index off less than 0.1%.

London’s FTSE 100 index was up 0.79%, the Paris CAC 40 rose 0.43% and the Frankfurt DAX gained 0.64%.

In other corporate news, Zarlink Semiconductor (TSX:ZL) earned a profit in its latest quarter, compared with a loss a year ago when the company took a big charge to goodwill. The Ottawa-based company, which keeps its books in U.S. dollars, earned $6.8 million or five cents per diluted share for the quarter ended March 26 compared with a loss of $50 million or 41 cents per diluted share a year ago.

Enterra Energy Trust (ENT.UN) says it’s owed US$8.2 million by two subsidiaries of Petroflow Energy Ltd. (TSX:PEF) that have filed under Chapter 11 of the U.S. bankruptcy code.

The two Petroflow subsidiaries — North American Petroleum USA and Prize Petroleum LLC, collectively known as NAPCUS — had been participating with Enterra in the Hunton gas play in Oklahoma.

Royal Dutch Shell PLC says it has agreed to buy East Resources Inc., a major owner of shale gas holdings in the United States, for US$4.7 billion from private investors.

Shell says it will pay cash for the company, which is capable of producing the equivalent of 10,000 barrels of oil per day in Marcellus Shale, which extends over large parts of the northeastern United States.