Possible OPEC cap lifts crude oil price

TORONTO — Higher energy stocks helped lift Canada’s main stock index Monday amid signals that the Organization of Petroleum Exporting Countries could extend a cap on oil production among its members.

The Toronto Stock Exchange’s S&P/TSX composite index added 70.04 points to 15,652.08, with stocks in health care, metals and consumer staples the lone decliners.

Much of the gain came as optimism grew that OPEC will continue its cap on production. Its 14 members, including Saudi Arabia, have cut output by 1.2 million barrels a day since January as part of a concerted effort to boost oil prices.

Eleven other non-OPEC oil-producing countries have also promised to trim an additional 558,000 barrels a day.

Emerging signs that OPEC plans on extending its agreement past its original six-month period can only be read as positive, said Craig Fehr, a Canadian markets strategist. “If you are of the mindset or the impetus that you want oil prices to move higher, then you are hopeful that this second round of agreements can perhaps do what the first round wasn’t fully effective in doing,” said Fehr, who works at Edward Jones in St. Louis.

“There is some sense of optimism here. Any time OPEC is involved in the conversation, I don’t think it should be dismissed. Their impact and influence on global oil prices has diminished today relative to a decade or so ago , but any changes in OPEC production should not be ignored.”

The group is set to officially discuss a possible deal later this month.

The June crude contract was up 21 cents at US$46.43 per barrel, while the Canadian dollar, which often trades in tandem with oil prices, rose 0.04 a US cent to an average value of 72.97 cents US.

On Wall Street, the Dow Jones industrial average was ahead 5.34 points to 21,012.28 while the Nasdaq composite saw an uptick of 1.9 points to 6,102.66 to land at a new record.

In other commodities, the June natural gas contract was down nine cents at US$3.17 per mmBTU, the June gold contract was up 20 cents at US$1,227.10 an ounce, and the July copper contract pulled back four cents at US$2.49 a pound.