Crude oil prices sank to a seven-month low Tuesday on supply increases in the Middle East while North American markets closed higher.
The December crude contract was down US89¢ per share at US$62.21 per barrel. That’s the lowest level since April 6.
Oil prices have been decreasing in recent sessions on reports that Iran will be allowed to trade oil with eight countries and that Saudi Arabia has been producing more oil than expected, says Dominique Barker, portfolio manager at CIBC Asset Management.
“It’s starting to become a supply story,” she said in an interview.
The United States re-imposed sanctions on Iran Monday. Some feared the move would cause oil prices to spike, but U.S. President Donald Trump carved out exemptions for China, Japan, South Korea, India, Taiwan, Greece, Italy and Turkey.
North American markets all closed higher on election day as the prospect of increased gridlock in Washington, D.C., from divided government didn’t seem to phase investors.
Polls have suggested that the Democrats would at least gain control of the House of Representatives, making it more difficult to raise the debt ceiling and reach consensus with the Trump White House.
“That’s obviously something that the market is thinking about but there’s nothing really to do at the moment so it’s just creating a little bit of an overhang,” she said.
However, Barker added that markets improved after 18 of the past midterm elections.
The S&P/TSX composite index closed up 75.01 points to 15,292.71.
The health care sector led on gains for many cannabis stocks and Bausch Health Companies Inc., which reported better adjusted earnings.
It was followed by utilities and energy. Telecom and industrials led on the downside as shares of Finning International Inc. and Toromont Industries Ltd. fell on slight earnings misses.
“We’ve had some earnings and one lesson is if you’re going to have earnings they better be good,” Barker said, pointing to the performance of these companies shares.
In New York, the Dow Jones industrial average gained 173.31 points to 25,635.01. The S&P 500 index was up 17.14 points to 2,755.45, while the Nasdaq composite was up 47.11 points at 7,375.96.
The Canadian dollar traded at an average of US76.16¢ compared with an average of US76.36¢ on Monday.
The December natural gas contract was up US1.2¢ at US$3.55 per mmBTU.
The December gold contract was down US$6 at US$1,226.30 an ounce and the December copper contract was down US2.35¢ at US$2.73 a pound.