Oil price slips after U.S. pulls out of Iran nuke deal

Canada’s main stock index edged higher as the price of oil slipped lower Tuesday after U.S. President Donald Trump announced he would withdraw his country from an Iran nuclear deal.

The S&P/TSX composite index advanced 34.08 points to 15,842.71.

Trump announced Tuesday that America would no longer be a party to the Joint Comprehensive Plan of Action, a 2015 agreement between the U.S., Iran and five other countries (plus the European Union) which limited Iran’s nuclear weapon-building capabilities and lifted most U.S. and international sanctions against Iran. Trump said the U.S. will institute “the highest level of economic sanction” against the country.

The decision caught markets by surprise as Trump’s self-imposed deadline of May 12 is still days away, said Francis Thivierge, senior portfolio manager for CIBC Asset Management.

“This is really the biggest event of the day in North America,” he said.

The price of oil and stocks in the TSX’s energy sector started the day off weakly in anticipation of Trump’s scheduled conference, he said, but recovered some of those losses later in the day after his speech.

Shares in the energy sector closed the day just out of the red, gaining on average 0.01 per cent. The price of oil settled above its daily low of $67.63 US per barrel. The June crude contract retreated $1.67 to $69.06 US per barrel.

Right after a significant event, Thivierge said, there’s usually a sharp movement and then it takes some time for things to settle.

In New York, indices made slight movements. The Dow Jones industrial average nudged forward 2.89 points to 24,360.21. The S&P 500 index slid 0.71 of a point to 2,671.92 and the Nasdaq composite index gained 1.69 points to 7,266.90.

The Canadian dollar was trading at 77.14 cents US, down 0.60 of a U.S. cent.

Elsewhere in commodities, the June natural gas contract shed about a penny to $2.73 per mmBTU.

The June gold contract fell 40 cents to $1,313.70 an ounce and the July copper contract fell two cents to $3.06 US a pound.