Surging oil and gas stocks powered the Toronto Stock Exchange to a near five-year high in 2005, leaving U.S. markets far behind.

The S&P/TSX composite index ended the year at 11,272.26, up 22% from where it closed in 2004. It was the third year in a row of double-digit gains for the benchmark index of the TSX.

The TSX energy index soared 60% over the year as crude oil futures settled just above US$61 a barrel. While that was down from the post hurricane high of US$70 a barrel reached in the fall, oil still managed to gain more than 40% in 2005.

Surging oil prices boosted shares of EnCana from around $34 at the beginning of the year to $52.70 at the end of 2005.

Excluding energy stocks, the TSX still would have risen by about 10% in 2005.

Metals and mining stocks rose 45%. Record copper prices helped Teck Cominco gain 68% to $62.05.

Gold stocks also shone again, rising on the TSX 21.5% as bullion prices climbed 18% to US$517 an ounce.

Mergers were also major trend this year, with Barrick Gold offering $12.13 billion for Placer Dome to create the world’s biggest gold producer.

The heavily-weighted financials group surged just over 20% despite a rising interest rate environment.

This year also saw the arrival of income trusts in the institutional trading mainstream after Standard & Poor’s, which manages the TSX index, added 72 trusts to the benchmark bourse. The trusts will be fully phased in by next March.

The TSX Venture Exchange moved 3.87 points higher to 2,223.55, capping a winning year that saw the junior index jump more than 21%.

South of the border, U.S. markets had a lacklustre year. The Dow Jones industrial average ended in negative territory, losing 63 points (0.6%) to 10,717.50. That made 2005 the first losing year for the Dow since 2002. General Motors, with its 53% loss on the year, was a major drag on the Dow.

The Nasdaq composite index eked out a 30-point gain (1.4%) to finish at 2,205.32. Apple Computer (up 122%) and Google (up 118%) provided much of the spark.

The Canadian dollar finished 2005 at US85.98¢, a gain of 3.4% on the year.