Crude price falls 12th straight day

TORONTO — Canada’s main stock index fell Tuesday as the energy sector was hit by nearly an eight per cent drop in the price of crude to a near one-year low.

“There’s been this violent repricing of crude oil, so today is the 12th down session in a row which is some kind of record,” said Patrick Bernes, a portfolio manager for CIBC Asset Management.

The price of West Texas Intermediate lost US$4.73 or 7.9 per cent to US$55.20.

“The fact that they were consecutive down days, which in and of themselves isn’t that meaningful, but it’s kind of an interesting losing streak.”

The December crude contract was down US$4.24 to US$55.69 per barrel. That’s the lowest level since Nov. 16, 2017.

The S&P/TSX composite index closed off 24.62 points to 15,131.78, led by a 2.8 per cent drop in the energy sector.

Health care lost 2.1 per cent on further weakness in cannabis stocks as government distribution channels signalled they were struggling to meet demand and reports that U.S. companies are going to start to compete. The scaling advantages enjoyed by U.S. cannabis firms have made the future look a little less bright for some of the Canadian producers, Bernes said.

Saudi Arabia initially said it would cut oil production, but backtracked after the death of journalist Jamal Khashoggi in the country’s consulate in Turkey.

“It looks to me like the Americans perhaps pressured the Saudis into agreeing to talk down energy prices after that and it had a pronounced effect,” Bernes said.

He said the fundamentals of oil suggest there isn’t a demand slowdown that would warrant such a big decline in the price of oil. “Now where we find our footing, could it be a bit lower? Perhaps, but I don’t necessarily see the case for a repeat of 2014,” Bernes said, referring to the 46 per cent drop in oil prices that year.

In New York, the Dow Jones industrial average lost 100.69 points to 25,286.49. The S&P 500 index was down 4.04 points at 2,722.18, while the Nasdaq composite was essentially flat at 7,200.88.

Some hopes of a deal between the U.S. and China were stoked after Larry Kudlow, head of the president’s National Economic Council, said that China’s vice-premier would meet with American officials in New York.

The Canadian dollar traded at an average of 75.52 cents US.

The December natural gas contract was up 31.3 cents at US$4.10 per mmBTU.

The December gold contract was down US$2.10 to US$1,201.40 an ounce and the December copper contract was up 1.05 cents at US$2.69 a pound.

• Meanwhile, Stelco Holdings Inc. earned $125 million in the third quarter for a sharp rebound from the $30-million loss it reported in the same quarter last year.

The Hamilton-based steel producer said adjusted net income for the quarter ending Sept. 30 came to $135 million, or $1.52 per share, up from an $11 million or 15 cent per share loss for the same quarter last year.

Analysts had been anticipating earnings of $164 million or $1.54 per share, according to Thomson Reuters Eikon.

Revenue came in at $619 million, an 84 per cent increase from the $336 million it pulled in for the same quarter last year as volumes shipped surged more than 42 per cent to 586 million tons.

The company said it had $39 million in tariff costs in the quarter related to the U.S. government’s imposition of steel and aluminum tariffs.

Stelco said higher prices helped offset tariff costs, as its average selling price was $980 per net ton, up from $793 per net ton for the same quarter last year.